ABSTRACT
At the core of this chapter is a so-called group company or jituan gongsi, in Chinese. This relatively new type of enterprise in China was briefly introduced in Chapter 2. From the point of view of its legal status, the group is not a legal person. It is a conglomerate of companies with one enterprise, usually a larger, more successful, one as the core enterprise (hexin qiye). A number of other companies of horizontally or vertically related industries, often from different parts of China, can form a group around such a core enterprise. The other companies remain officially independent legal persons, but voluntarily give the core company the authority to interfere in their management. The core company will receive a management fee from the other group members.
