MACAU SAR, CHINA Law and Practice Contributed by: Frederico Rato, Pedro Cortés and Calvin Tinlop Chui, Lektou
pany shares and quotas, and IP) and receivables (eg, deposits, income, proceeds from insurance claims, and rights to payment). The applicable formalities and perfection require- ments generally conform to those that are applied to the constitution or acquisition of the assets, ranging from a simple agreement between the parties, to a public deed with the intervention of a notary public, possibly with the additional requirement of complet- ing the registration of the security with the competent public authorities (eg, the Real Estate Assets Registry or the Commercial and Movable Assets Registry). The essential consequence of not completing the above requirements renders the respective security invalid and/or unenforceable against any third party. The timing and costs involved in arranging any of the above security measures vary and will depend on the complexity of the respective formalities and perfection requirements. 5.2 Floating Charges and/or Similar Security Interests The Macau Commercial Code permits that a floating charge be granted over all present and future assets of a company, provided that certain prerequisites are fulfilled. 5.3 Downstream, Upstream and Cross- Stream Guarantees There are no general or associated limitations or restrictions on downstream, upstream and cross- stream guarantees. However, in accordance with the Macau Commercial Code, companies cannot provide personal or real guarantees for the obligations of other persons, unless such guarantees serve the company’s own interest, which must be expressly declared and reasoned in writing by the administration body. There are no prohibitions imposed on granting secu- rity or guarantees to foreign lenders. However, in accordance with the Macau Commercial Code, com- panies cannot provide personal or real guarantees for the obligations of third parties, unless such guaran- tees serve the company’s own interest, which must
be expressly declared and reasoned in writing by the company’s administrative body. 5.4 Restrictions on the Target The general rule is that companies cannot provide personal or real guarantees for the obligations of other persons, unless such guarantees serve the company’s own interest, which must be expressly declared and reasoned in writing by the company’s administrative body. Therefore, unless the target being acquired sat- isfies the above requirements, any guarantees, secu- rity or financial assistance for the acquisition of its own shares would be null and void. 5.5 Other Restrictions Besides the general rule mentioned in 5.4 Restrictions on the Target , restrictions are imposed on credit insti- tutions (eg, banks) to limit their exposure to the hold- ers of qualifying holdings – ie, any person, individual or corporate that has, directly or indirectly, a qualifying holding in them – or to companies over which this person has direct or indirect control. Additionally, the aggregate exposure of all holders of qualifying hold- ings and companies may not exceed, at any time, 40% of their Tier-1 capital. Such operations require approval from two thirds of the members of the credit institution’s board of direc- tors and a favourable opinion from its supervisory board, and the AMCM shall also be notified of the respective terms within ten days, counted from the date of the respective approval. Specific limits are also imposed on: • exposures to the security of the company’s own shares; • the members of its board of directors and supervi- sory board, their spouses (as long as they are not judicially separated or married under the regime of separate property), children, parents, stepchil- dren, step-parents, sons-in-law, daughters-in-law, parents-in-law, or companies under their control or the board of directors or supervisory board to which they belong; and • each employee.
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