Decision of the State Council on Revising the Regulations of

the People's Republic of China on Administration of

Registration of Companies

Order of the State Council No．451

The Decision of the State Council on Revising the Regulations of the People's Republic of China on Administration of Registration of Companies is hereby promulgated and shall go into effect as of January 1，2006．

Premier Wen Jiabao

December 18，2005

The State Council has decided to make the following revisions to the Regulations of the People7S Republic of China on Administration of Registration of Companies：

    1．One paragraph is added to Article 2 as paragraph 2：The applicant shall be responsible for the authenticity of the application documents and materials when applying for registration of company.”

    2．Article 6 is revised as follows：”The State Administration for Industry and Commerce is responsible for the registration of the following companies：

(1)A company，for which the state—owned assets supervision and administration institution of the State Council performs the functions and duties of a capital contributor, as well as a company，which is established with the investment of the first—mentioned company that holds more than 50％shares therein：

(2)A foreign-funded company；

(3)A company which shall be registered by the State Administration for Industry and commerce in accordance with the relevant laws，administrative Regulations，or decisions of the State Council；and

(4)Other companies that should be registered by the State Administration for Industry and Commerce in accordance with the relevant provisions.”

3．Article 7 is revised as follows：”The administrations for industry and commerce at the level of a province, autonomous region or municipality directly under the Central Government are responsible for the registration of the following companies in areas under their respective jurisdiction：

(1)A company，for which the state—owned assets supervision and administration institution of the people’s government of a province, autonomous region, or municipality directly under the Central Government performs the functions and duties of a capital contributor, as well as a company，which is established with the investment of the first-mentioned company that holds more than 50％shares therein；

 (2)A company established with the investment of a natural person which shall be registered by the administration for industry and commerce of a province，autonomous region，or municipality directly under the Central Government：

 (3)A company which shall be registered by the administration for industry and commerce of a province，autonomous region，or municipality directly under the Central Government in accordance with the relevant laws，administrative Regulations，and decisions of the State Council；and

(4)Other company of which the registration is entrusted by the State Administration for Industry and Commerce．”

4．Article 8 is revised as follows："The administration for industry and commerce of a city(region)with subordinated districts or a 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 city with subordinated districts are responsible for the registration of the following companies in areas under their respective jurisdiction：

(1)Companies other than those as prescribed in Articles 6 and 7 of the present Regulations：and

(2)Companies of which the registration is entrusted 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 of registration as prescribed in the preceding paragraph shall be prescribed 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 city (region) with subordinated districts shall be responsible for registration of joint stock companies.”

5．One article is added as Article 14，which reads：”The form of shareholders’ capital contribution shall comply with the provisions of Article 27 of the Company Law．

  For capital contribution in the form of properties other than currency，in—kind，intellectual property or land use right，the measures for registration shall be prescribed by the State Administration for Industry and Commerce in conjunction with the relevant departments under the State Council．

  No shareholder may make any capital contribution based on the appraised value of labor，creditworthiness，name of a natural person，goodwill，franchise or any property to which any guaranty has been set."

6．One article is added as Article 15，which reads：”The business scope of a company shall be stipulated by the articles of association thereof and shall be subject to registration according to law.”

For the terminology applied in the business scope of a company，the standards for industrial categories of the national economy shall be referred to.”

7．One article is added as Article 16：”Companies are classified into limited liability companies and companies limited by shares．

  For 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 as well as in its business license.

8．Article 17 is change to be Article 20，to paragraph 2 of which an item is added as item(5)：”Where the initial capital contributions made by a shareholder is non-monetary property，the certification documents certifying that the formalities for transferring the property thereof have been gone through shall be submitted when the company go through the formalities for the registration of establishment.”

And one paragraph shall be added as paragraph 3，which reads：“The initial capital contributions made by a shareholder of a limited liability company with foreign investment shall conform to the provisions of relevant laws and administrative Regulations，and the remaining part shall be contributed in full amount within 2 years as of the establishment of the company．In particular, an investment company may contribute its capital in full amount within 5 years?

9．Article 18 is change to be Article 21，to which one paragraph is added as paragraph 3，which reads：”As to a company limited by shares that has been established by the offer method，it shall submit the minutes of the founding meeting as well．As to any company limited by shares that has been established by the offer method issues shares，the relevant approval documents issued by the state-owned assets supervision and administration institution of the State Council shall be submitted as well．”

One paragraph shall be inserted as paragraph 4：”Where the establishment of a company limited by shares shall be subject to approval according to the provisions of laws，administrative Regulations，or decisions of the State Council，the relevant approval documents shall be submitted as well．”

10． Article 24 is change to be Article 27，to which one paragraph is added as paragraph 3，which reads：”Where the change of registered items shall be subject to approval before registration according to the provisions of laws，  administrative Regulations，or decisions of the State Council，the relevant approval documents shall be submitted to the company registration authority as well.

11．Article 28 is change to be Article 31 and paragraph 2 thereof is revised to read：”Where a company increases its registered capital，the increased amount contributed by the shareholders of a limited liability company and the new shares as subscribed by the shareholders of a company limited by shares shall be governed by the relevant provisions of the Company Law on the capital contributions for the establishment of a limited liability company and the subscription of shares for the establishment of a company limited by shares． Where a company limited by shares increases its registered capital by means of public offer of new shares or where a listed company increases its registered capital by means of non-public offer of new shares，the relevant approval documents issued by the securities regulator of the State Council shall be submitted as well.”

One paragraph is added as paragraph 3， which reads：”Where the statutory common reserve fund of a company is converted into its registered capital，it shall be indicated in the asset verification certificate that the surplus of the statutory common reserve fund of the company may not be 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 may not be less than the prescribed minimum amount.”

12．One article is added as Article 32：”Where a company changes its paid-up capital，it shall provide the asset verification certification issued by an asset verification institution that has been lawfully established and capital contributions shall be made according to the time and form of capital contribution as indicated in the articles of association of the company．  A company shall， within 30 days as of the date when contribution of capital or shares are made in full amount，  apply for changing its registration.

13．Article 29 is changed to be Article 33，to which one paragraph is added as paragraph 2，which reads：”Where the relevant license or any other approval document with respect to all item in the business scope of a company subject to the approval according to relevant laws，administrative Regulations，or decisions of the State Council，is revoked or withdrawn，or expires，the company shall， in accordance with the provisions of Chapter VI of the present Regulations，apply for the change of its registration or handle the formalities for deregistration within 30 days as of the date of withdrawing or revocation or expiration of the license or approval document．”

14．Article 31 is changed to be Article 35，to which one paragraph is added as paragraph 2，which reads：”Upon the demise of a natural—person shareholder of a limited liability company，the qualification of a shareholder shall be succeeded to his legitimate heir and the company shall apply for change of its registration in accordance with the provisions of the preceding paragraph．”

15．One article is added as Article 36：”Where the change of registered items of a company relates to the change of registered items of its branch，the company shall apply for the change of registration for its branch within 30 days from the day when the registration of the company is changed.”

16．One article is added as Article 41：”A company shall submit the following documents when applying to the company registration authority for revocation or change of its registration according to the provisions of Article 22 of the Company Law：

(1)Letter of Application signed by the legal representative thereof；

(2)Written judgment issued by the people's court．”

17．One article is added a8 Article 42：”Where a company is required to undergo liquidation in the event of dissolution according to law，a liquidation group shall，within 10 days as of formation of the group，file the list of members and person—in—charge of the group with the company registration authority for record.”

18．Article 37 is changed to be Article 44，to which one paragraph is added as paragraph 2．which reads：”If a solely state—owned company applies for cancellation of its registration，it shall submit the decision of the state-owned assets supervision and administration institution in addition．In particular，for the key solely state-owned companies as determined by the State Council，the approval documents of the people's government at the same level shall be submitted as well．”

19．Article 40 is deleted．

20．Article 42 is changed to be Article 48，to paragraph 2 of which one item is added as item(4):“The documents of tenure of once and identity certificate of the person-in-charge of the branch.”

One paragraph shall be inserted as paragraph 3：”Where it is prescribed by laws，administrative Regulations，or decisions of the State Council that the establishment of a branch shall be subject to approval or in case 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 is added as paragraph 4，which reads：”Where the company registration authority approves the registration of a branch，it shall issue a Business License．The company shall，within 30 days from the day when its branch is registered，file with the company registration authority for record upon the strength of the Business License of its branch．”

21．One article is added as Article 51：“To apply for the registration of a company or branch，the applicant may submit its application to the company registration authority in person or may file an application by means of letter，telegraph，telex，facsimile，electronic data exchange or email．

“Where any application is filed by such means as telegraph，telex，facsimile，electronic data exchange or email，the applicant’s contact method and address shall be provided.

22．One article is added as Article 52，which reads：”The company registration authority shall decide whether or not to accept an application according to the following circumstances：

(1)Where the application documents and materials are complete and in the statutory form, or the applicant has submitted all the application documents and materials supplemented and corrected according to the requirements of the company registration authority, the company registration authority shall make the decision on accepting the application；

(2)Where the application documents and materials are complete and in the statutory form but the company registration authority considers that the application documents and materials shall be subject to verification，the company registration authority shall make the decision on accepting the application and shall，at the same time，inform in writing the applicant of the items subject to verification as well as the reason therefore and time limit thereof．

(3)Where the application documents and materials contain mistakes that may be corrected on the spot，the applicant shall be allowed to correct them on the spot，affix its signature or seal to the correction and indicate the date of correction．If the corrected application documents and materials are confirmed to be complete and in the statutory form，the company registration authority shall make the decision on accepting the application．

(4)Where the application documents and materials are in complete or not in the statutory form，the company registration authority shall，on the spot or within 5 days，inform，at a time，the applicant of all the contents that need to supplemented or corrected．If the applicant is informed on the spot，the company registration authority shall return the application documents and materials to the applicant；if the applicant is informed within 5 days，the company registration authority shall accept the application documents and materials and shall issue a receipt of the application documents and materials．In case the company registration authority fails to inform the relevant applicant，it shall be deemed that it has accepted the application as of the date of receipt of the application documents and materials．

 (5)In case any item fails to fall within the scope of comply registration or the company registration authority's jurisdiction, it shall immediately make the decision on refusal of the application and inform the applicant to apply to the relevant competent administrative organ．

As to an application that is filed by such means as letter，telegraph，telex，facsimile，electronic data exchange or email，the company registration authority shall，within 5 days as of the date of receipt of the application documents and materials，decide whether or not to accept the application：

23．One article is added as Article 53，which reads：”Unless an approval decision is made according to item(1)，paragraph 1 of Article 54 of the present Regulations，the company registration authority shall，when it has decided to accept an application，issue a Notice on Acceptance．In the case of rejection，it shall issue a Notice on Rejection，give explanations for the rejection，and inform the applicant of the rights to apply for an administrative reconsideration or to lodge an administrative litigation according to law.”

24．One article is added as Article 54，which reads：”The company registration authority shall，after deciding to accept an application，decide whether or not to approve a company's registration within the prescribed time limit according to different circumstances：

(1)Where an application submitted by an applicant in person to the company registration authority is accepted，it shall decide whether or not to approve the registration on the spot；

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

(3)Where an application as filed by an applicant by such means as telegraph，telex，facsimile，electronic data exchange or e-mail，an applicant shall，within 15 days as of the date of receipt of the Notice on Acceptance，submit the original of the application documents and materials in compliance with the statutory form and in consistency with the contents of the telegraph，telex，facsimile，electronic data exchange or email．If the original of application documents and materials is submitted to the company registration authority by the applicant in person，the company registration authority shall decide whether or not to approve the registration on the spot；if the original of application documents and materials is submitted by means of letter, it shall decide whether or not to approve the registration within 15 days as of date of acceptance．

(4)Where the company registration authority does not receive the original of the relevant application documents and materials within 60 days from the day the Notice on Acceptance is sent out，or the original of the application documents or materials are inconsistent with the application documents and materials as accepted by the company registration authority，the company registration authority shall decide not to approve the registration．

Where the company registration authority needs to verify the application documents and materials，it shall decide whether or not to approve the registration within 15 days of date of acceptance.”

25．One article is added as Article 55，which reads：”Where the company registration authority makes the decision on pre-approval of a company's name，it shall issue a Notice 0n Pre-approval of Enterprise Name．Where it decides to approve the registration of a company．it shall issue a Notice on Approval of Establishment Registration and inform the applicant to collect its b