The limits of claim assignment under PRC law: the legal basis for acquisition

The Civil Code establishes the general principle that claims are assignable, subject to three exceptions: where the nature of the claim precludes it, where the parties have agreed otherwise, and where law prohibits it. The acquisition structure rests on that general principle; the practical risk sits in the exceptions.

What a no-assignment clause actually does

The most common obstacle is a contractual prohibition on assignment. The distinction that matters: such a clause does not automatically void the assignment — its effect depends on the nature of the claim and the assignee's state of knowledge. For monetary claims the rule is comparatively permissive, which is why monetary claims are the natural fit for an acquisition structure.

The function and timing of notice

An assignment takes effect against the debtor upon notice. The practical lesson is that timing carries strategic weight. Notice too early can trigger asset rearrangement; too late invites the defence that the debtor has already paid the original creditor. We coordinate the timing of notice with the application for interim measures.

How this differs from funding

It bears emphasis that acquisition and funding are legally distinct. A funder is not the holder of the right; its position derives from contract with the party. An acquirer is the holder and asserts the right in its own name. That distinction governs procedural standing, who bears costs, and who controls settlement.