Source: Ministry of Commerce Website, PRC

Administrative Regulations Governing The Registration of Legal Corporations

Friday, July 25, 2003 Posted: 15:24 BJT(0724 GMT)

(Into Effect as of July 1, 1988)

TABLE OF CONTENTS

  • CHAPTER I GENERAL PRINCIPLES
  • CHAPTER II COMPETENT REGISTRATION ORGANS
  • CHAPTER III CONDITIONS OF REGISTRATION AND CONDITIONS GOVERNING REGISTRATION APPLICANTS
  • CHAPTER IV ITEMS FOR REGISTRATION
  • CHAPTER V REGISTRATION FOR COMMENCEMENT OF BUSINESS
  • CHAPTER VI AMENDMENT OF REGISTRATION
  • CHAPTER VII CANCELLATION OF REGISTRATION
  • CHAPTER VIII PUBLIC NOTICES, ANNUAL REVIEWS AND LICENCE ADMINISTRATION
  • CHAPTER IX ADMINISTRATION OF THE REGISTRATION OF THE BUSINESS ACTIVITIES OF INSTITUTIONS AND SOCIAL ORGANISATIONS OF A TECHNICAL NATURE
  • CHAPTER X SUPERVISION AND CONTROL
  • CHAPTER XI SUPPLEMENTARY PRINCIPLES

CHAPTER I
GENERAL PRINCIPLES

Article 1
These Regulations are formulated in accordance with the General Principles of the Civil Law of the People’s Republic of China in order to establish an administrative system for the registration of corporations, to verify the status of corporations, to safeguard the legal rights and interests of enterprises, to outlaw illegal operations and to safeguard social and economic order.

Article 2
An enterprise which meets the requirements of a legal person shall register as a corporation in accordance with the provisions of these Regulations if it is:

(1) an enterprise owned by the whole people
(2) a collectively-owned enterprise
(3) an allied enterprise
(4) a Sino-foreign joint equity enterprise, Sino-foreign cooperative enterprises or sole foreign investment enterprise established within the territory of the People’s Republic of China
(5) a private enterprise
(6) another type of enterprise which is legally required to register as a corporation

Article 3
An enterprise applying to register as a corporation shall be registered, issued with a Corporate Business License and granted legal person status subject to its examination and approval by an organ responsible for registering corporations. Its legal rights and interests shall receive the protection of State laws.

An enterprise which is legally required to register as a corporation, but which has not been examined, approved and registered by an organ responsible for registering corporations shall not be permitted to conduct business activities.

CHAPTER II
COMPETENT REGISTRATION ORGANS

Article 4
The organs responsible for registering corporations (hereinafter referred to as competent registration organs) shall be the State Administration for Industry and Commerce and the local administrations of industry and commerce at the various levels. Competent registration organs at the various levels shall perform their duties under the leadership of their higher level authorities in accordance with the law and free from unlawful intervention.

Article 5
A national company, entrepreneurial group or company engaged in import/export dealings whose establishment was approved by the State Council or a State Council authorized department shall be subject to examination, approval and registration by the State Administration for Industry and Commerce. A Sino-foreign joint equity enterprise, Sino-foreign co-operative enterprise or sole foreign investment enterprise shall be subject to examination, approval and registration by the State Administration for Industry and Commerce or its authorized local administration for industry and commerce.

A subsidiary (branch) of a national company or an enterprise, entrepreneurial group or company engaged in import/ export dealings whose establishment was approved by a provincial, autonomous region or directly administered municipal people’s government or its authorized department shall be subject to examination, approval and registration by a provincial, autonomous region or directly administered municipal administration for industry and commerce.

All other enterprises shall be subject to examination, approval and registration by local municipal or county level administrations for industry and commerce.

Article 6
Competent registration organs at the various levels shall establish corporation registration files and registration statistics systems. They shall keep informed of all basic information regarding corporation registration so as to facilitate the development of a planned commodity economy.

Competent registration organs, in accordance with society’s requirements and in a planned fashion, shall develop the service of providing the public with information on corporation registration.

CHAPTER III
CONDITIONS OF REGISTRATION AND CONDITIONS GOVERNING REGISTRATION APPLICANTS

Article 7
A unit that applies for registration as a corporation shall fulfil the following conditions:

(1) have its own name, organizational structure and articles of association
(2) have a fixed place of business and the necessary facilities
(3) have funds and personnel of an amount and number which conform with State regulations and which are in proportion with the scale of its production operations and services
(4) have the ability to bear civil liability independently
(5) have a scope of business which conforms with the provisions of State laws, statutory regulations and policies

Article 8
The registering of an enterprise as a corporation shall be handled by the party responsible for its organization and establishment.

The registering of an allied enterprise which bears civil liability independently shall be handled by the party responsible for its organization and establishment.

CHAPTER IV
ITEMS FOR REGISTRATION

Article 9
The main involved in registering as a corporation shall be the corporation name, domicile, business permises, legal representative, economic nature, scope of business, means of operation, registered capital, number of personnel, duration of operations and branch organizations.

Article 10
A corporation shall be permitted to use only one name. The name used in an application for registration as a corporation shall be subject to examination and verification by a competent registration organ. After approval and registration of the name, the corporation shall have proprietary right of use within the prescribed limits.

When applying to establish a Sino-foreign joint equity enterprise, Sino-foreign co-operative enterprise or sole foreign investment enterprise, an application to register the name of the enterprise shall be submitted to a competent registration organ before procedures for the examination and approval of the contract and articles of association are undertaken.

Article 11
The legal representative of a corporation which is examined, approved and registered by a competent registration organ shall be the person who represents the enterprise as its signatory in the exercise of its functions and powers. The signature of a legal representative shall be filed with the relevant competent registration organ.

Article 12
Registered capital shall consist of property under the operational management of a corporation as accorded by the State or property owned by a corporation itself.

If a corporation which is registering the commencement of business operations applies to register an amount of capital which does not correspond with the amount of capital actually available, the matter shall be handled in accordance with the specific provisions of the State.

Article 13
The scope of business of a corporation shall be appropriate in relation to the amount of its capital, its premises, equipment, number of personnel and technical strength. It may, in accordance with relevant State provisions, conduct one main business and operate sidelines concurrently. A corporation shall operate within its approved and registered scope of business.

CHAPTER V
REGISTRATION FOR COMMENCEMENT OF BUSINESS

Article 14
A Corporation registering commencement of business operations shall submit an application to a competent registration organ within 30 days of obtaining the approval of the department in charge or the examining and approving organ. If a corporation registering commencement of business operations is without a department in charge or an examining and approving organ, the competent registration organ shall conduct the examination. A competent registration organ shall issue its decision regarding approval of a registration application within 30 days of receiving the application.

Article 15
When applying to register the commencement of corporate business operations, the following documents and certificates shall be submitted:

(1) a registration application signed by the person in charge of preparatory matters
(2) a document of approval issued by the department in charge or the examining and approving organ
(3) the articles of association
(4) a certificate of credit worthiness and a certificate of capital verification, or a capital guarantee
(5) identity papers of the principal persons in charge of the enterprise
(6) a certificate of domicile and certification of the right of use of business premises
(7) other relevant documents and certificates

Article 16
An enterprise shall be deemed to be established after the examination, approval and registration by a competent registration organ of its application to register the commencement of corporate business operations and the issue of a Corporate Business License. A corporation may order its common seal, open a bank account, sign contracts and engage in business activities, based on its Corporate Business License.

A competent registration organ may authorize the issue of duplicate copies of a Corporate Business License in accordance with the business development requirements of a corporation.

CHAPTER VI
AMENDMENT OF REGISTRATION

Article 17
A corporation which needs to amend details regarding its name, domicile, business premises, legal representative, economic nature, scope of business, registered capital or duration of operations or needs to register the establishment or abolition of a branch organization shall apply to register the amendment.

Article 18
A corporation applying to register an amendment shall submit an application to a competent registration organ within 30 days of obtaining the approval of the department in charge or the examining and approving organ.

Article 19
An application to register an amendment, register the commencement of business operations or cancel registration, due to the division, merger or change of business premises of a corporation, shall be submitted to the competent registration organ within 30 days of obtaining the approval of the department in charge or the examining and approving organ.

CHAPTER VII
CANCELLATION OF REGISTRATION

Article 20
If a corporation closes down its operations, is abolished, declared bankrupt or terminates its operations for some other reason, procedures for canceling registration shall be carried out with the competent registration organ.

Article 21
To cancel registration, a corporation shall submit an application for cancellation of registration signed by its legal representative, a document of approval issued by its department in charge or examining and approving organ and a certificate of debt clearance or a balance sheet issued by its liquidators. After a competent registration organ has verified and approved the cancellation application, it shall recover the Corporate Business License, any duplicate copies and the corporate seal of the corporation and shall notify the bank with which the corporation has an account.

Article 22
A corporation which fails to commence business operations within six months of being issued with a Corporate Business License or which suspends its operations for period in excess of one year shall be seen as having closed down its business operations. A competent registration organ shall recover its Corporate Business License, any duplicate copies and its corporate seal and shall notify the bank with which the corporation has an account.

CHAPTER VIII
PUBLIC NOTICES, ANNUAL REVIEWS AND LICENCE ADMINISTRATION

Article 23
If an enterprise is commencing operations, amending its name or canceling its registration, a competent registration organ shall issue a public notice stating the details of the registration. Other units shall not be permitted to issue such notices without the approval of a competent registration organ.

Article 24
An annual review system shall be implemented as part of the administration of corporation registration. A corporation shall submit an annual review report and a balance sheet or a statement of assets and liabilities at the time specified by the competent registration organ. The competent registration organ shall examine the main items of the corporation registration.

Article 25
The Corporate Business License issued to a corporation by a competent registration organ shall act as its document of credence. Except in an event when a competent registration organ may recover or revoke the License in line with legal procedure, no other unit or individual shall be permitted to recover, retain of destroy it.

A corporation which loses its Corporate Business License or a duplicate copy of the License may only apply to be issued with a replacement after notice of the loss has been published in the newspaper.

The forgery, alteration, lease, lending, transfer, sale or unauthorized reproduction of a Corporate Business License or duplicate copy shall not be permitted.

Article 26
A corporation requiring registration of its commencement of business operations, registration of an amendment or the handling of an annual review shall pay registration fees or annual review fees in accordance with regulations. Fees for the registration of the commencement of business operations shall be levied at 0.1% of the total amount of registered capital. If the registered capital exceeds 10,000,000 yuan, the excess amount shall be subject to a levy of 0.05%. If the registered capital exceeds 100,000,000 yuan, the excess amount shall be exempt from further levying. The minimum amount to be levied as registration fees shall be 50 yuan. The State Administration for Industry and Commerce shall determine provisions concerning fees for the registration of amendments and annual review fees.

CHAPTER IX
ADMINISTRATION OF THE REGISTRATION OF THE BUSINESS ACTIVITY OF INSTITUTIONS AND SOCIAL ORGANISATIONS OF A TECHNICAL NATURE

Article 27
If an institution or social organization of a technical nature establishes an enterprise which satisfies the requirements of a corporation in accordance with relevant State regulations, the enterprise shall apply for registration and may only commence its business activities after being examined and approved by a competent registration organ and issued with a Corporate Business License.

Article 28
If an institution which is no longer receiving State fund allocations or a social organization of a technical nature wishing to conduct business activities proposes to engage in entrepreneurial operations as prescribed by relevant State regulations and satisfies the requirements of a corporation, it shall apply for registration and may only commence its business activities after being examined and approved by a competent registration organ and issued with a Corporate business License.

CHAPTER X
SUPERVISION AND CONTROL

Article 29
A competent registration organ shall exercise the following supervisory and control functions and powers over a corporation:

(1) supervising a corporation in its handling of the registration of commencement of business operations, registration of an amendment or cancellation of registration in accordance with regulations
(2) supervising a corporation in its performance of business activities in accordance with the items of registration, the articles of association and the contract
(3) supervising the observance by a corporation and its legal representative of State laws, statutory regulations and policies
(4) halting, investigating and dealing with any illegal economic activities undertaken by a corporation, as well as safeguarding the legal rights and interests of the corporation

Article 30
A competent registration organ may, depending on the circumstances, issue a warning, impose a fine, confiscate illegal income, order the suspension of business operations until the matter is rectified or confiscate or revoke a Corporate Business License if a corporation is involved in any of the following acts:

(1) withholding the truth or practicing fraud as regards a registration application or unlawfully commencing business before completing examination, approval and registration procedures
(2) amending any of the main items of registration without authorization or engaging in business activities beyond the approved and registered scope of business
(3) failing to cancel registration in accordance with regulations or failing to submit an annual review report or to carry out annual review procedures in accordance with the regulations
(4) forging, altering, leasing, lending, transferring, selling or reproducing without authorization a Corporate Business License or duplicate copy
(5) withdrawing or transferring capital or concealing assets in order to evade payment of debts
(6) engaging in other illegal business activities

When penalizing a corporation pursuant to the aforesaid provisions, the administrative liability and economic liability of the legal representative shall be investigated in accordance with the circumstances of the illegal act. Criminal liability shall be pursued by the judicial organs in accordance with the law if there has been a violation of the criminal law.

Article 31
A competent registration organ dealing with the illegal activities of a corporation shall ascertain the facts and handle the matter in accordance with the law. The parties concerned shall be notified in writing of the penalty decision.

Article 32
A corporation which disagrees with the penalty decision of a competent registration organ may, within 15 days of receiving notice of the decision, apply to a higher level competent registration organ for reconsideration. The higher level competent registration organ shall issue a decision on the review within 30 days of receiving the review application. If the applicant disagrees with the review decision, it may lodge an appeal with the people’s court within 30 days of receiving notice of the decision. If a corporation fails both to initiate legal proceedings and to fulfil the penalty decision within the prescribed period, the competent registration organ may notify the corporation’s bank to transfer the amount due from its account, in accordance with the stipulated procedures.

Article 33
If a corporation has its Corporate Business License revoked, the competent registration organ shall also recover its common seal and notify its bank of the cancellation of the corporation’s registration. The relevant department in charge or a liquidator shall settle matters concerning the claims and debts of the corporation.

Article 34
Administrative sanctions and monetary penalties shall be imposed in accordance with the circumstances if personnel of a department in charge, an examining and approving organ or a competent registration organ violate the provisions of these Regulations, seriously neglect their duty, abuse their powers of office, practice graft, demand or accept bribes or infringe upon the rights and interests of a corporation, Criminal liability shall be pursued by the judicial organs if there has been a violation of the criminal law.

CHAPTER XI
SUPPLEMENTARY PRINCIPLES

Article 35
If a corporation establishes a branch organization which is unable to assume civil liability independently, the corporation shall apply for the branch registration and, following examination and approval by a competent registration organ and the issue of a Business License, business activities may be conducted within the approved and registered scope of business.

In accordance with relevant State regulations, if a State funded institution or social organization of a technical nature engages in business activities or establishes an enterprise which does not qualify as a corporation, the relevant unit shall apply for registration and, following examination and approval by a competent registration organ and the issue of a business License, business activities may be conducted within the approved and registered scope of business.

Detailed measures for administering registration shall be exercised with reference to the provisions of these Regulations.

Article 36
Newly established enterprises approved by the relevant State Council departments or planning departments at the various levels shall be required to complete preparatory registration on the expiry of one year of their preparatory term, in accordance with specific regulations.

Article 37
Those enterprises which, before the implementation of these Regulations, qualify for the status of a legal person and have already been examined, approved and registered by a competent registration organ shall not be required to undertake separate procedures for registration as a corporation.

Article 38
The State Administration for Industry and Commerce shall be responsible for the interpretation of these Regulations and shall formulate detailed implementing rules.

Article 39
These regulations shall take effect from 1 July 1988. The measures of the People’s Republic of China on the Administration of the Registration of Sino-foreign Joint Equity Enterprises, promulgated 26 July 1980 by the State Council; the Regulations on the Administration of the Registration of Industrial and Commercial Enterprises, promulgated 9 August 1982 by the State Council and the Provisional Regulations on the Administration of Company Registration, approved 14 August 1985 by the State Council and promulgated 25 August 1985 by the State Administration for Industry and Commerce shall be annulled simultaneously.