Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 56

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 56
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-PRC resident enterprises. The PRC tax authorities may pursue such non-resident
enterprises with respect to a filing or the transferees with respect to withholding obligation, and request our PRC subsidiary to assist
in the filing. As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations
or being taxed, under relevant Notices and Circulars, and may be required to expend valuable resources to comply with these Notices and
Circulars or to establish that we and our non-resident enterprises should not be taxed under these circulars, which may have a material
adverse effect on our financial condition and results of operations.

The PRC tax authorities have
the discretion under these Notices and Circulars to make adjustments to the taxable capital gains based on the difference between the
fair value of the taxable assets transferred and the cost of investment. We may pursue acquisitions in the future that may involve complex
corporate structures. If we are considered a non-resident enterprise under the PRC corporate income tax law and if the PRC tax authorities
make adjustments to the taxable income of the transactions under these Notices and Circulars, our income tax costs associated with such
potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.

PRC regulations establish complex procedures
for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions
in China.

PRC regulations and rules
concerning mergers and acquisitions including the Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (the
“ M& A Rules”), established additional procedures and requirements that could make merger and acquisition activities by
foreign investors more time consuming and complex. For example, the M& A Rules require that the MOFCOM be notified in advance of any
change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry
is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, (iii) such
transaction will lead to a change in control of a domestic enterprise which holds famous trademarks or PRC time-honored brands, or (iv) such
PRC domestic enterprise is an affiliate of the foreign investor as stipulated under the M& A Rules. Moreover, the Anti-Monopoly Law
requires that the anti-trust governmental authority shall be notified in advance of any