(a) To what extent is this type of business 'finance' technique practised in this economy?

 

Both operational lease and capital lease are widely practiced in Taipei,China as far as equipment leasing is concerned.

(b) If default is made what are the rights of the owner of the property to recover the leased property?

 

Upon a default by the lessee, the owner of the property may, based on its ownership title, repossess the leased property, or seek the assistance from the court for the repossession and return of the leased property in case the lessee rejects to cooperate.

(c) Does the exercise of these rights require court process?

 

Yes, in case the lessee rejects to cooperate, the court process must be proceeded with.

(d) How effective in actual practice is the process of recovery (list any relevant impediments, such as the right of access to the place where the equipment is situated; the right to physically take the equipment away from the place; and so forth)?

 

Formal court proceedings will have to be proceeded with for the recovery in case the lessee rejects the owner's access to the place where the equipment is located or the owner's repossession of the leased equipment. A final court judgment could possibly take about a year.

(e) What effect does the commencement of insolvency proceedings in respect of the corporate debtor have on the recovery of leased property?

 

If the corporate debtor is lessee, the owner may ask for the return of the leased property from the administrator upon the commencement of insolvency proceedings.

(f) Is it usual for an equipment lease to be supported by guarantees (sureties) for payment of lease charges; default penalties; and so forth?

 

Yes, it is usual for an equipment lease to be supported by guarantees for payment of lease charges, default penalties and other obligations under the lease agreement.