How to distinguish between continuous related party transactions and one-time related party transactions

The classification of daily and occasional related party transactions by share-transfer companies is mainly based on Article 34 of Information Disclosure (Trial), that is, only when listed companies have reasonably predicted the total amount of related party transactions that will occur in this year before disclosing the last annual report can they be classified as daily related party transactions, as well as transactions that are not predicted in advance and transactions that exceed the estimated amount, which should be reviewed by the shareholders' meeting according to Article 35 of Information Disclosure (Trial).

There is no clear definition of joint-stock company. In practice, I suggest referring to the provisions of Articles 12 and 42 of the Guidelines for the Implementation of Related Party Transactions of Listed Companies of Shanghai Stock Exchange on the types of daily related party transactions. Purchase of raw materials, fuel, power, sales of products and commodities, provision or acceptance of labor services, entrusted or entrusted sales, deposit and loan with related party finance companies and other types of transactions agreed in the articles of association can be predicted as daily related party transactions.

How to deal with the loan guarantee of the controlling shareholder for the company?

The controlling shareholder provides guarantee for enterprise loans, which is common in many companies with strong capital demand. The procedures that need to be performed can be handled in accordance with the relevant provisions of affiliated transactions. However, the external guarantee and related party's capital occupation must be disclosed in a timely manner within two trading days from the date of occurrence in strict accordance with the provisions of Article 46 of the Information Disclosure (Trial), and a suggestive announcement should be issued at least once a month to disclose the progress in solving the illegal external guarantee or capital occupation.