By Fineline Cube 
Shandong Buchang Chuanfang, a subsidiary of China-based Buchang Pharma (SHA: 603858), announced the establishment of a joint venture named Shaanxi Buchang MedData with Shaanxi-based Lingyishushu (Xi’an). The new company has a registered capital of Rmb5 million, with Chuanfang contributing Rmb4 million for an 80% stake and Lingyishushu contributing Rmb1 million for a 20% stake.
Management Structure
Chuanfang will appoint the chairman, legal representative, supervisors, and heads of R&D and finance. Lingyishushu will handle the business license and nominate the general manager and marketing lead. Both parties are required to fully fund the venture within five years of incorporation.
Breach Provisions
The agreement includes provisions for material breaches. If Lingyishushu fails to meet capital calls, commits a material breach, or the joint venture incurs net losses for two consecutive years, Chuanfang has the option to buy out Lingyishushu at a pre-agreed price or compel a buyback. A defaulting party that does not rectify the situation within the prescribed period will face a penalty of Rmb5 million. The agreement becomes effective upon signature and sealing.-Fineline Info & Tech