Laws of the People's Republic of China

No. 451

The Decision of the State Council on Amending the Regulations of the People's Republic of China for the Administration on Company Registration is hereby promulgated and shall go into effect as of January 1, 2006. Wen Jiabao, the Premier of the State Council

December 18, 2005

Decision of the State Council on Amending the Regulations of the People's Republic of China for the Administration on Company Registration

The State Council has decided to make the following amendments on the Regulations of the People's Republic of China for the Administration on Company Registration:

1.

One paragraph shall be inserted into Article 2 as paragraph 2: "When applying for company registration, the applicant shall be responsible for the authenticity of the application documents and materials."

2.

Article 6 shall be amended as: "The State Administration for Industry and Commerce shall be responsible for the registration of the following companies:

(1)

Companies, for which the supervision and administration institution of state-owned assets of the State Council performs the functions and duties as a capital contributor, and companies which are established with the investment of the foresaid companies that hold more than 50% shares therein;

(2)

Foreign-funded companies;

(3)

Companies that shall be subject to the registration of the State Administration for Industry and Commerce according to the relevant laws, administrative regulations, or decisions of the State Council; and

(4)

Other companies that shall be subject to the registration of the State Administration for Industry and Commerce as provided for by the State Administration for Industry and Commerce itself."

3.

Article 7 shall be amended as: "The administration for industry and commerce of a province, autonomous region or municipality directly under the Central Government shall be responsible for the registration of the following companies within its administrative division:

(1)

Companies, for which the supervision and administration institution of the state-owned assets of the people's government of a province, autonomous region, or municipality directly under the Central Government performs the functions and duties as a capital contributor, and companies which are established with the investment of the foresaid companies that hold more than 50% shares therein;

(2)

Companies as established with the investment of a natural person shall be subject to the registration of the administration for industry and commerce of a province, autonomous region, or municipality directly under the Central Government as provided for by the administration for industry and commerce of a province, autonomous region, or municipality directly under the Central Government itself;

(3)

Companies subject to the registration of the administration for industry and commerce of a province, autonomous region, or municipality directly under the Central Government according to the relevant laws, administrative regulations and decisions of the State Council; and

(4)

Other companies subject to the registration of the administration for industry and commerce of a province, autonomous region, or municipality directly under the Central Government as authorized by the State Administration for Industry and Commerce."

4.

Article 8 shall be amended as: "The administration for industry and commerce of a districted city (region) or county, the sub-administration for industry and commerce of the municipality directly under the Central Government, the regional sub-administration for industry and commerce of a districted city shall be responsible for the registration of the following companies within its administrative division:

(1)

Companies other than the companies as prescribed in Articles 6 and 7 of the present Regulations; and

(2)

Companies subject to the registration as authorized by the State Administration for Industry and Commerce or the administration for industry and commerce of a province, autonomous region, or municipality directly under the Central Government.

The specific jurisdiction over registration as prescribed in the preceding paragraph shall be formulated by the administration for industry and commerce of a province, autonomous region, or municipality directly under the Central Government. However, the administration for industry and commerce of a districted city (region) shall be responsible for the registration of joint stock limited companies."

5.

One article shall be inserted as Article 14 : "The manners for shareholders to contribute capital shall accord with the provisions of Article 27 of the Company Law. Where any shareholder contributes capital in any other form other than currency, in-kind, intellectual property or land use right, the measures for registration thereof shall be formulated by the State Administration for Industry and Commerce jointly with the relevant departments of the State Council.

"No shareholder may make any contribution based on labor, credit, name of a natural person, goodwill, franchise or properties to which any guarantee has been set.

6.

One article shall be inserted as Article 15 : "The business scope of a company shall be prescribed in the articles of association and shall be subject to registration according to law."

"The terminology applied in the business scope of a company shall refer to the standards for industrial categories of the national economy."

7.

One article shall be inserted as Article 16 : "The companies are classified into limited liability companies and joint stock limited companies.

As for any one-person limited liability company, the sole-investor nature of the natural person or legal person shall be indicated in the registration documents of the company, and shall also be indicated in the business license thereof."

8.

Article 17 shall be made as Article 20 , and an item shall be inserted into paragraph 2 as item (5): "If the first capital contribution made by a shareholder is non-monetary property, the certification documents indicating that the formalities for transferring the property thereof have been gone through shall be submitted, when the company goes through the formalities for the registration of establishment.

One paragraph shall be inserted as paragraph 3: "The first capital contribution made by a shareholder of a foreign-funded limited liability company shall accord with the provisions of relevant laws and administrative regulations, and the rests shall be contributed in full amount within 2 years as of the company is set up. Particularly, the investing company may contribute its capital in full amount within 5 years."

9.

Article 18 shall be made as Article 21 , and one paragraph shall be inserted therein as paragraph 3: "A joint stock limited company, which has been established by the form of floating stocks, shall submit the meeting records of the establishment assembly as well; a and joint stock limited company, which has been established by the form of stock flotation with issuing stocks publicly, shall submit the relevant approval documents by the securities regulatory institution of the State Council as well."

One paragraph shall be inserted as paragraph 4: "Where it's prescribed by any law, administrative regulation or decision of the State Council that the establishment of a joint stock limited company shall be subject to approval, the relevant approval documents shall be submitted as well."

10.

Article 24 shall be made as Article 27 , and one paragraph shall be inserted as paragraph 3: "If it's prescribed by any law, administrative regulation or decision of the State Council that the alteration of any registration item shall be subject to approval before registration, the relevant approval documents shall be submitted to the organ in charge of company registration as well.

11.

Article 28 shall be made as Article 31 , and paragraph 2 therein shall be amended as: "If a company increases its registered capital, the increased amount as subscribed by shareholders of a limited liability company and the new stocks as subscribed by the shareholders of a joint stock limited company shall be carried out respectively in accordance with the relevant provisions of the Company Law on the capital contributions for the establishment of a limited liability company and on the subscription of stocks for the establishment of a joint stock company. Where a joint stock limited company increases its registered capital by means of public issuance of stocks or a listed company increases its registered capital by means of non-public issuance of stocks, the relevant approval documents examined and approved by the securities regulatory institution of the State Council shall be submitted as well."

One paragraph shall be inserted as paragraph 3: "Where the statutory accumulation funds of a company is converted into its registered capital, it shall be clearly indicated in the asset verification certification that the rest of the statutory accumulation funds of the company shall be not less than 25% of the registered capital thereof before the conversion."

One paragraph shall be inserted as paragraph 5: "The registered capital of a company after capital reduction shall be not less than the minimum amount as provided for by law."

12.

One article shall be inserted as Article 32 : "Where a company alters its actual capital contributions, it shall submit the asset verification certification as made by an asset verification institution that has been lawfully established, and shall contribute the relevant capital in light of the time and form of capital contribution as indicated in the articles of association thereof. A company shall, within 30 days as of the contribution of capital or funds as generated in full amount, apply for alteration of its registration."

13.

Article 29 shall be made as Article 33 , and one paragraph shall be inserted as paragraph 2: "Where the relevant license or any other approval document for any item in the business scope of a company which shall be subject to the approval according to relevant laws, administrative regulations or decisions of the State Council, is suspended or revoked, or the relevant license or any other approval document expires, the company shall, within 30 days as of the suspension or revocation or the expiration of the license or any other approval document, apply for the alteration of its registration or go through the formalities for deregistration in accordance with the provisions of Chapter VI of the present Regulations."

14.

Article 31 shall be made as Article 35 , and one paragraph shall be inserted as paragraph 2: "Where the legitimate inheritor of a natural-person shareholder of a limited liability company succeed to the qualification of a shareholder after the death of the natural-person shareholder, the relevant company shall apply for alteration of its registration in accordance with the provisions of the preceding paragraph."

15.

One article shall be inserted as Article 36 : "Where the alteration of any registered item of a company is involved with the alteration of any registered item of its branch, it shall apply for alteration of registration for its branch within 30 days as of the day when the registration of the company is altered."

16.

One article shall be inserted as Article 41 : " Where a company applies with the organ in charge of company registration for revocation of alteration in its registration in light of the provisions of Article 22 of the Company Law, it shall submit the following documents:

(1)

The Application as signed by the legal representative of the company;

(2)

A written judgment of the people's court"

17.

One article shall be inserted as Article 42 : "Where a company is dissolved and shall be subject to liquidation according to law, a liquidation group shall, within 10 days as of the formation of the group, report the list of members and the person in charge of the group to the registration organ in charge of company registration for archival filing."

18.

Article 37 shall be made as Article 44 , and one paragraph shall be inserted as paragraph 2: "Where a solely state-owned company applies for deregistration, it shall additionally submit the decision of the supervision and administration institution of state-owned assets. Particularly, for the key solely state-owned companies as decided by the State Council, the approval documents of the people's government at the same level shall be submitted as well."

19.

Article 40 shall be deleted.

20.

Article 42 shall be made as Article 48 , and one item shall be inserted into paragraph 2 thereof as item (4): "The appointment document and identity certification of the person in charge of the branch;"

One paragraph shall be inserted as paragraph 3: "Where it is prescribed by any law, administrative regulation or decision of the State Council that the establishment of a branch shall be reported for approval or any item within the business scope of a branch shall be subject to approval before registration according to relevant laws, administrative regulations or decisions of the State Council, the relevant approval documents shall be submitted as well."

One paragraph shall be inserted as paragraph 4: "Where the organ in charge of company registration approves the registration of a branch, a Business License shall be issued. The company shall, within 30 days as of the day when its branch is registered, go to the organ in charge of company registration to go through the formalities for archival filing upon the strength of the Business License of its branch."

21.

One article shall be inserted as Article 51 : "When applying for the registration of a company or branch, the applicant may go to the organ in charge of company registration to submit its application or file an application by means of letter, telegraph, telex, fax, electronic data exchange, email and etc."

"Where any application is filed by means of telegraph, telex, fax, electronic data exchange or email, the contact manner and address of the applicant shall be provided."

22.

One article shall be inserted as Article 52 : "The organ in charge of company registration shall, in light of the following circumstances, respectively decide whether or not to accept an application:

(1)

Where the application documents and materials are complete and meet the statutory forms, or the applicant has submitted all the application documents and materials that have been supplemented and corrected pursuant to the requirements of the organ in charge of company registration, the organ shall decide to accept the application;

(2)

Where the application documents and materials are complete and meet the statutory forms but the organ in charge of company registration believes that the application documents and materials shall undergo verification, the organ shall decide to accept the application and shall meanwhile inform the applicant of the items subject to verification as well as the reasons and time limit thereof in written form.

(3)

Where the application documents or materials have any mistake that may be corrected on the spot, the applicant shall be allowed to correct it on the spot, affix its signature or seal to the correction and indicate the date of correction; where the relevant application documents and materials are confirmed to be complete and meet the statutory forms, the organ shall decide to accept the application.

(4)

Where the application documents or materials are incomplete or fail to meet the statutory forms, the organ shall, on the spot or within 5 days, inform the applicant of all the contents subject to supplementation and correction for one time. If it is informed on the spot, the organ shall return the application documents and materials to the applicant; and if it is informed within 5 days, the organ shall collect the application documents and materials and shall produce a receipt of the application documents and materials. In case the organ fails to inform the relevant applicant when the time limit expires, it shall be deemed that the organ has accepted the application as of the day when the application documents and materials are received.

(5)

In case any item fails to fall within the registration scope of a company or within the registration jurisdiction of the organ, it shall immediately decide not to accept the relevant application, and shall inform the applicant to apply to the relevant administrative organ.

As for an application that is filed by means of letter, telegraph, telex, fax, electronic data exchange or email, the organ in charge of company registration shall, within 5 days as of receiving the relevant application documents and materials, decide whether or not to accept the application."

23.

One article shall be inserted as Article 53 : "Unless an approval decision is made according to item (1), paragraph 1 of Article 54 of the present Regulations, the organ in charge of company registration shall, when it has decided to accept an application, produce a Notice on Acceptance. In the case of rejection, it shall produce a Notice on Rejection, make explanations for rejection and inform the applicant of the right to apply for an administrative review or an administrative litigation according to law."

24.

One article shall be inserted as Article 54 : "The organ in charge of company registration shall, after deciding to accept an application, decide whether or not to approve its registration within the prescribed time limit in light of different circumstances:

(1)

Where an application as filed by an applicant at the organ in charge of company registration is accepted, it shall decide whether or not to approve its registration on the spot;

(2)

Where an application as filed by an applicant by means of letter is accepted, it shall decide whether or not to approve its registration within 15 days as of acceptance.

(3)

Where an application as filed by an applicant by means of telegraph, telex, fax, electronic data exchange or email, the applicant shall, within 15 days as of receiving the Notice on Acceptance, submit the original of the application documents and materials in consistence with the statutory forms and in compliance with the contents of the telegraph, telex, fax, electronic data exchange or email. If an applicant goes to the organ in charge of company registration to submit the original of application documents and materials, the organ shall decide whether or not to approve its registration on the spot. Where an applicant submits its original application documents and materials in letter form, the organ shall decide whether or not to approve its registration within 15 days.

(4)

Where the organ in charge of company registration dose not receive any original of the relevant application documents and materials within 60 days as of sending out the Notice on Acceptance, or the original of the application documents or materials is inconsistent with the application documents and materials as accepted by the organ in charge of the registration of companies, the organ shall decide not to approve its registration.

Where the organ in charge of company registration needs to conduct any verification on the application documents and materials, it shall decide whether or not to approve the registration within 15 days as of acceptance.

25.

One article shall be inserted as Article 55 : If the organ in charge of company registration decides to approve the name of a company in advance, it shall produce a Notice on the Advanced Approval for Enterprise Name. If the organ decides to approve the establishment registration of a company, it shall produce a Notice on the Approval for Establishment Registration and inform the applicant to draw its business license within 10 days as of the decision. If the organ decides to approve the alteration of registration of a company, it shall produce a Notice on the Approval of Alteration Registration and inform the applicant to renew its business license within 10 days as of decision. If the organ decides to approve the writing-off of registration of a company, it shall produce a Notice on the Approval of Writing-off Registration, and revoke the relevant business license.

Where the organ in charge of company registration decides not to approve any name in advance or not to approve the registration, it shall produce a Notice on Rejecting the Enterprise Name or a Notice on Rejecting the Registration, and make explanations for the disapproval and not registration and inform the relevant applicant of the right to apply for an administrative review or an administrative litigation according to law."

26.

Article 46 shall be made as Article 56 , and the paragraph 2 thereof shall be amended as: "Where the Business License of an Enterprise Legal-person of a company is drawn, the registration fee for establishment shall be paid at 0.8% of the total amount of its registered capital. If its registered capital exceeds RMB 10 million Yuan, for the excess sum, the fee shall be paid at 0.4%. Where its registered capital exceeds RMB 0.1 billion Yuan, no charge shall be claimed for the excess.

27.

Article 49 shall be made as Article 59 and shall be amended as: "From March 1 to June 30 each year, the organ in charge of company registration shall conduct an annual examination on the companies."

28.

Article 54 shall be made as Article 64 , and the paragraph 3 thereof shall be amended as: "Where the organ in charge of company registration decides to alter, write off the registration or revoke its decision on alteration registration, and the relevant company refuses to submit or fails to submit its Business License, the organ in charge of company registration shall announce to cancel the business license of the company.

29.

Article 63 shall be made as Article 73 , and one paragraph shall be inserted as paragraph 2: "Where a company fails to go through the relevant formalities for archival filing in accordance with the provisions of the present Regulations, the organ in charge of company registration shall order it to go through the formalities within a time limit. In case any company fails to go through the formalities within the prescribed time period, a fine of not more than 30, 000 Yuan shall be imposed thereupon."

30.

Article 64 shall be made as Article 74 , and one paragraph shall be inserted as paragraph 2: "Where a company, when undergoing liquidation, conceals any asset, makes any false record in its balance sheet or property checklist or distributes its assets before paying off its debts the organ in charge of company registration shall order it to make corrections and impose upon the company a fine of 1% up to 10% of the concealed assets or the assets as distributed before clearing off its debts as well as impose upon the chief person in charge or any other directly liable person a fine of 10,000 Yuan up to 100, 000 Yuan."

One paragraph shall be inserted as paragraph 3: "Where a company engages in any business operation irrelevant to the liquidation when undergoing liquidation, the organ in charge of company registration shall give it a warning and confiscate the relevant illegal proceeds."

31.

Article 65 shall be made as Article 75 , and one paragraph shall be inserted as paragraph 2: "Where any member of a liquidation group takes advantage of his powers to practice favoritism, seek any illegal proceeds or seize any asset of the company, the organ in charge of company registration shall order him to refund the company's assets, confiscate the legal proceeds and may impose upon it a fine of 1 time up to 5 times of the illegal proceeds.

32.

Article 66 shall be deleted.

33.

Article 67 shall be deleted.

34.

One article shall be inserted as Article 79 : "Where an institution responsible for assets evaluation, assets verification or authentication provides any false material, the organ in charge of company registration shall confiscate the illegal proceeds and impose upon a fine of 1 time up to 5 times of the illegal proceeds. The relevant competent administrative department may order the said institution to stop its business, revoke the qualification certificates of the directly liable persons and suspend the Business License of the institution.

"Where an institution responsible for the assets evaluation, assets verification or authentication provides any report with any major omission caused by negligence, the organ in charge of company registration shall order it to make corrections, and may, under any serious circumstance, impose upon a fine of 1 time up to 5 times of the illegal proceeds. The relevant administrative department may order the said institution to stop its business, revoke the qualification certificates of the directly liable persons and suspend the Business License of the institution.

35.

Article 71 shall be deleted.

36.

One article shall be inserted as Article 83 : "Where a foreign company violates any provision of the Company Law to unlawfully establish any branch within the territory of China, the organ in charge of company registration shall order it to make corrections or close down and may impose upon a fine of 50, 000 Yuan up to 200, 000 Yuan.

37.

One article shall be inserted as Article 84 : "Where any company takes advantage of its name to undertake any serious illegal act that may injure the state security or social public interests, its Business License shall be revoked."

38.

One article shall be inserted as Article 85 : "Where any branch of a company has committed any illegal act in violation of the present Chapter, the provisions of the present Chapter shall be applied thereto."

39.

One article shall be inserted as Article 86 : "Where anyone violates the provisions of the present Regulations and thus constitutes a crime, he shall be subject to criminal liabilities according to law."

40.

Article 74 shall be deleted.

41.

One article shall be inserted as Article 88 : "Where it's prescribed by any law, administrative regulation or decision of the State Council that the establishment of a company shall be reported for approval, or any item within the business scope of the company shall be subject to approval before registration according to laws, administrative regulations or decisions of the State Council, the State Administration for Industry and Commerce shall work out and publicize the Catalogue of Administrative License before the Registration of a Company according to relevant laws, administrative regulations and decisions of the State Council.

Furthermore, the order of articles and some words shall be adjusted and amended accordingly.

The present Decision shall go into effect as of January 1, 2006.

The Regulations for the Administration on Company Registration shall be amended in accordance with the present Decision and be promulgated again.