[Direct answer]In the Beijing area, the dismantling of the control structure agreement (commonly known as the dismantling of VIE) involves multiple risks, mainly including: first, tax risks. The equity and asset restructuring may generate corporate income tax, personal income tax, stamp duty and other tax burdens. Whether the pricing is fair affects the tax base; second, foreign exchange and cross-border capital risks. Domestic residents' overseas investment and financing through special purpose companies and return investment involve foreign exchange registration and cross-border capital arrangements, with high compliance requirements; third, equity and asset restructuring risks. It involves adjusting the control relationship, equity repurchase and asset transfer, which may lead to shareholder disputes; fourth, contract termination risks. The termination of agreements and control documents between all parties needs to be handled properly to avoid leaving liability exposure; fifth, regulatory and disclosure risks. It involves overseas listing and filing, industry access and foreign investment management, and the need to comply with corresponding procedures. Specific risks and handling methods shall be subject to the transaction structure and current effective laws, regulations and supervision rules.

I. Problem Background and Typical Scenarios

The agreement control structure was once widely used in overseas financing and listing, and the motivations for its dismantling were diverse. Typical scenarios include: the company intends to return to the domestic capital market; changes in industry access or foreign investment management; adjustments to overseas listing arrangements; investors' requirements to clean up the structure; and disputes over control relationships among shareholders. In the above situations, the dismantling of the structure involves multiple aspects such as taxation, foreign exchange, equity, and contracts. Improper handling may lead to significant risks. For related foreign and financial matters, please refer to the following documents for reference:Financial capital and cross-border transactions involving foreign countries.

II. Key points of contention

First, the fairness of restructuring pricing and tax burden estimation. Second, foreign exchange registration and cross-border fund arrangements. Third, adjustment methods for equity and control relationships. Fourth, termination of agreements and control documents and allocation of responsibilities. Fifth, creditor interests and guarantee arrangements. Sixth, exit of overseas investors and consideration payment. Seventh, regulatory filing and information disclosure. The above issues determine the feasibility and cost of the dismantling plan. For enterprise compliance, please refer to the relevant guidelines.Intellectual property protection and corporate law.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers advise in foreign-related and capital practice: The control structure of the demolition agreement should be coordinated across four aspects: taxation, foreign exchange, equity, and contracts. Firstly, regarding taxation, the transfer pricing of equity and assets in the restructuring must comply with the principle of independent transactions. Potential tax burdens such as corporate income tax, personal income tax, and stamp duty need to be estimated to avoid tax adjustments and disputes caused by unfair pricing. Secondly, regarding foreign exchange compliance, domestic residents conducting overseas investment and financing through special-purpose companies and return investment should complete foreign exchange registration in accordance with relevant regulations, and cross-border fund transfers must have genuine transaction backgrounds and comply with legal channels. Thirdly, regarding equity and control relationships, demolition often involves equity repurchases, shareholder changes, and asset transfers. It is necessary to handle shareholders' resolutions, amendments to the articles of association, and industrial and commercial changes simultaneously to ensure clear ownership. Fourthly, regarding contracts and liabilities, the termination of legal documents and control agreements should specify the effective time, liability assumption, and handling of residual matters to avoid being held liable after termination. Fifthly, regarding supervision and disclosure, if overseas listing and filing, or industry access are involved, corresponding procedures and information disclosure should be carried out. Henglue Lawyers typically start by sorting out the structure diagram and legal relationships, identifying key risk points, and then formulating step-by-step implementation plans and corresponding legal documents. For foreign-related and financial matters, reference can be made to the relevant guidelines and regulations. 恒略律师在涉外与资本实务中提示：拆除协议控制架构应统筹税务、外汇、股权与合同四条线索。首先，税务安排，重组中股权与资产的转让定价须符合独立交易原则，需测算企业所得税、个人所得税与印花税等潜在税负，避免因定价不公允产生纳税调整与争议。其次，外汇合规，境内居民以特殊目的公司开展境外投融资及返程投资，应按相关规定办理外汇登记，跨境资金的进出须有真实交易背景与合规路径。再次，股权与控制关系，拆除往往涉及股权回购、股东变更与资产划转，应同步处理股东会决议、章程修改与工商变更，确保权属清晰。第四，合同与责任，各方法律文件与控制协议的解除应明确生效时间、责任承担与遗留事项处理，避免解除后仍被主张责任。第五，监管与披露，涉及境外上市与备案、行业准入的，应履行相应程序并做好信息披露。恒略律师通常先梳理架构图与法律关系，识别关键风险点，再制定分步实施方案并配套法律文件。涉及涉外与金融事务的，可参考\nFinancial capital and cross-border transactions involving foreign entities.

IV. Practical suggestions and legal basis

Action list: First, sort out the complete structure and legal relationships and draw a structural diagram; Second, evaluate the tax costs and the fairness of pricing; Third, verify the foreign exchange registration and cross-border fund arrangements; Fourth, design the equity restructuring and agreement termination plans and prepare supporting documents; Fifth, fulfill the obligations of regulatory filing and information disclosure. Legal basis: The Enterprise Income Tax Law of the People's Republic of China (amended on December 29, 2018) and its implementing regulations regarding restructuring and related-party transactions; The Individual Income Tax Law of the People's Republic of China (amended on August 31, 2018 and implemented on January 1, 2019); The relevant provisions of the State Administration of Foreign Exchange on the foreign investment and financing and return investment of domestic residents through special purpose companies; The Interim Measures for the Management of Overseas Securities Issuance and Listing by Domestic Enterprises (implemented on March 31, 2023). For matters involving foreign affairs and finance, please refer to the relevant provisions.\nFinancial capital and cross-border transactions involving foreign entities; For those involved in corporate compliance, you can refer to the following materials for reference.Intellectual property protection and corporate law; For contracts, you can refer to the relevant documents for more details.Business and contract disputes in enterprisesThe specific terms shall be subject to the transaction structure and the current effective laws, regulations, and supervision rules.

5. Henglu Law Firm's Advice

Firstly, the demolition must coordinate four aspects: taxation, foreign exchange, equity, and contracts. Secondly, the fairness of the restructuring pricing directly affects the tax burden and risks. Thirdly, foreign exchange registration and cross-border funds must comply with regulations. Fourthly, the termination of the agreement should clarify responsibilities and outstanding issues. Fifthly, regulatory filing and information disclosure cannot be overlooked. For matters involving foreign affairs and finance, you can proceed through the relevant channels.\nFinancial capital and cross-border transactions involving foreign entitiesObtain a comprehensive solution for the service.

VI. Frequently Asked Questions

Q1: What are the main risks of the control structure of the demolition agreement?

The main risks include tax restructuring risks, foreign exchange and cross-border fund compliance risks, adjustment risks of equity and control relationships, liability risks of contract termination, and regulatory filing and information disclosure risks. These risks need to be evaluated comprehensively and implemented step by step.

Q2: Will the demolition generate a lot of taxes?

There may be a heavy tax burden. Equity and asset restructuring may involve corporate income tax, personal income tax, and stamp duty, etc., which depend on the transaction pricing, structure, and applicable tax policies. It is necessary to calculate and evaluate the compliance handling solutions in advance.

Q3: What should I do for foreign exchange registration?

Residents within the country who conduct overseas investment and financing and return investment through special purpose companies should register in accordance with the regulations on foreign exchange management; cross-border fund transactions require a genuine transaction background. It is recommended to handle these matters under the guidance of professional institutions to avoid procedural flaws.

Q4: What should I do if the investors don't agree with the demolition plan?

The exit consideration and time arrangement can be clarified through negotiation, and disputes can be resolved in accordance with the investment agreement and the company's articles of association when necessary. For matters involving repurchases and compensations, the sources of funds and payment capabilities should be evaluated, and supporting legal documents should be prepared.

Q5: Can the company still be listed overseas after the delisting?

It depends on the regulatory framework and the structure of the company. If the company still plans to list overseas after the structural adjustment, it needs to go through procedures such as filing according to relevant regulations. Whether this is feasible depends on the transaction structure, industry access, and compliance requirements. It is recommended to conduct an assessment in advance and communicate with intermediary institutions about this matter.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the necessary evidence, to avoid missing the statutory time limits. →Financial capital legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.