In practice, some employees may decrease the taxable salary in agreement with the company (or some financial employees on their own decision) and acquire the decreased part of taxable salary by way of reimbursement from the company afterwards. Admittedly, the aforesaid operation is not uncommon in practice. Through such operation employees can pay less personal income tax and the company can carry out accounting and operate through the invoices submitted by employees. Such operation seems just a small favor provided by the company to employees without any detriment to the company's operation. However, in case that employees and the company have labor disputes, such “operation” has become a pain point for both parties. For example, if two parties cannot reach an agreement on the termination of the labor relationship, will the company have the legitimate right to dismiss employees for their suspected evasion of tax? If employees blackmail the company for the company’s cooperation in such operation, how should the company address the problem?

1. Which companies are required to set up the person in charge of personal information protection under the personal information protection law? According to the Personal Information Protection Law (hereinafter referred to as “PIPL”）, if the number of personal information processed by the personal information processer (e.g. the company) reaches the threshold specified by the Cyberspace Administration of China, shall the processor of personal information designate the person in charge of personal information protection (similar as the data protection officer (“DPO”) under the GDPR), who shall be responsible for supervising the activities of personal information processing and the protection measures taken. The recent state-issued Exposure Draft on Personal Information Protection Compliance Audit and the Exposure Draft of Data Security Technology Personal Information Protection Compliance Audit Requirements have also put forward clear audit requirements, particularly with regard to whether the setup, qualifications and responsibilities to the person in charge of personal information protection/DPO are in compliance with the law.

In general, all shareholders have rights to receive dividends, participate in major decisions and choose management in accordance with the law. For example, unless otherwise prescribed in the articles of association of a company with respect to voting ratio, according to Article 66 of the Company Law of the People's Republic of China (effective on July 1, 2024, hereinafter referred to as the “2024 Company Law”), a resolution made by the shareholders' meeting shall be adopted by the shareholders representing more than half of the voting rights. A resolution made by the shareholders' meeting on modifying the articles of association, increasing or decreasing the registered capital, as well as merger, division and dissolution shall be adopted by the shareholders representing more than two thirds of the voting rights. Therefore, shareholders holding more than two thirds of the company's equities are usually called controlling shareholders. Compared to controlling shareholders, minority shareholders in a joint venture have limited control and voice in the actual operation of the company.