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Provisional Regulations on Disclosure of Enterprise Information
The Provisional Regulations on Disclosure of Enterprise Information (the “Regulations”) were promulgated on August 7 and shall take effect on Oct. 1, 2014. The Regulations have been approved by the State Council, China's cabinet, and endorsed by Premier Li Keqiang. To ensure transparency, the Regulations stipulate disclosure obligations of both enterprises and government agencies.

(translated by Jennifer Jiang, Chief Attorney of www.bilawyers.com)

Order No. 654 of the State Council of the People’s Republic of China

 

The Provisional Regulations on Disclosure of Enterprise Information, adopted at the 57th session of the standing committee of the State Council on July 23, 2014, are hereby promulgated and shall come into force as of October 1, 2014.

 

Keqiang Li, Premier of the People’s Republic of China

August 7, 2014

 

 

Provisional Regulations on Disclosure of Enterprise Information

 

Article 1.    The Regulations are formulated in order to protect fair competition, promote enterprise integrity and self-restraint, regulate enterprise information disclosure, reinforce enterprise credit restraint, defend transaction safety, improve government supervision effectiveness, and expand social supervision.

 

Article 2.   Enterprise Information herein refers to information generated during operations of enterprises that are registered with the Administrations for Industry and Commerce (the “AIC”s), as well as information that can reflect enterprise status and is generated during the performance of duties of the government departments.

 

Article 3.   Disclosed enterprise information shall be authentic and the disclosure shall be timely. If enterprise information to be disclosed by an enterprise itself concerns national secrecy, national security or public interests, such enterprise shall apply for approval from confidentiality administrative departments or national security departments. If enterprise information to be disclosed by a government department at or above the county level concerns business secrets or individual privacies, such government department shall apply for approval of its superior department in charge.

 

Article 4.   The People’s Governments of provinces, autonomous regions and municipalities directly under the central government shall lead the disclosure of enterprise information and promote the construction of the Enterprise Credit Disclose System within their own jurisdictions in accordance with the national overall requirements for the construction of Social Credit Information Platform.

 

Article 5.   The AIC of the State Council shall promote and supervise the disclosure status of enterprise information, and organize the construction of the Enterprise Credit Information Disclosure System (the “Disclosure System”). Other government departments of the State Council shall disclose enterprise information stipulated by the Regulations.

 

Pertinent government departments of the People’s Governments at or above the county level shall disclose enterprise information pursuant to the Regulations.

 

Article 6.   The AICs shall disclose to the public the following information generated during their performance of duties through the Disclosure System:

1)       business registration and record filing;

2)       chattel mortgage registration;

3)       equity pledge registration;

4)       administrative penalty;

5)       others in accordance with the law.

 

The abovementioned enterprise information shall be disclosed within 20 working days from the information generation date.

 

Article 7.   Other government departments other than the AICs (“Other Government Departments”) shall disclose to the public the following information generated during their performance of duties (Remark by Bilingual Lawyers: no time limit is stipulated):

1)         grant, change and extension of administrative approval;

2)         administrative penalty;

3)         others in accordance with the law

 

Other Government Departments can use the Disclosure System or other systems to disclose the aforementioned information. The AICs and other Government departments shall establish coordinated response mechanism in accordance with the national overall requirements for the construction of Social Credit Information Platform.

 

Article 8.   An enterprise shall submit its annual reports of the preceding year to the AICs and disclose such reports to the public through the Disclosure System between January 1 and June 30 each year.

 

A newly established enterprise shall submit its annual reports and disclose such reports to the public from the following year.

 

Article 9.   The annual reports shall contain the following information:

1)         enterprise address, zip code, phone number, E-mail, etc.;

2)         enterprise exist status: open, close, liquidation, etc.;

3)         investment on business establishment and equity purchase;

4)         information of the shareholders or enterprise promoters of the limited liability company and joint stock company: subscribed capital, paid capital, subscription time and method of payment, etc. ;

5)         information of shareholder change of limited liability company: share transfer, etc.;

6)         enterprise website, information of any online shop: name and address, etc.;

7)         enterprise staff number, total capital, total debts, external guarantees, shareholders’ equity, gross revenue, revenue of main businesses, total profits, net profits, total taxes.

 

The above items from 1) to 6) shall be disclosed to the public, while the disclosure of item 7) is at the discretion of the enterprise itself.

 

With permission of the enterprise, citizens, legal persons or other organizations can have access to information that is not disclosed to the public at the discretion of the enterprise.

 

Article 10.             An enterprise shall disclose to the public the following information within 20 working days from the information generation date through the Disclosure System:

1)         information of the shareholders or enterprise promoters of the limited liability company and joint stock company: subscribed capital, paid capital, subscription time and method of payment, etc. ;

2)         information of shareholder change of limited liability company: share transfer, etc.;

3)         obtaining, change and extension of administrative approval;

4)         intellectual property pledge registration;

5)         administrative penalty;

6)         others in accordance with the law.

 

If the AICs discover that any enterprise fails to perform disclosure obligations pursuant to the above paragraph, they shall order such enterprise to fulfill its obligations with a certain period.

 

Article 11.             Government departments and enterprises shall be responsible for the authenticity and timeliness of the information they disclosed.

 

Article 12.             If a government department finds any inaccuracy of its disclosed information, it shall make correction in a timely manner. If citizens, legal persons or other organizations have evidences indicating the inaccuracy of the information disclosed by the government departments, they have rights to ask such departments to make corresponding correction.

 

If an enterprise finds any inaccuracy of its disclosed information, it shall make correction in a timely manner; however, the correction shall be done before June 30 of each year. The information corrected before and after shall be both disclosed.

 

Article 13.             If citizens, legal persons or other organizations find information disclosed by the enterprise to be false, they have rights to report to the AICs, who shall conduct checks, process facts and notify the reporters in writing with 20 workings days from report receiving date.

 

If citizens, legal persons or other organizations have any queries on the information disclosed pursuant to the Regulations, they can make enquires to the government departments, who shall reply to the enquiry applicants in writing within 20 workings days from enquiry receiving date.

 

Article 14.             The AIC of the State Council and the AICs of provinces, automatous regions, and municipalities directly under the Central Government shall, in the spirit of fairness, through random pick based on enterprise registration numbers, determine which enterprise to check and organize the check of enterprise disclosed information.

 

When randomly checking enterprise disclosed information, the AICs can adopt the following methods: paper check, field check or internet monitoring, etc.. The AICs can entrust professional institutions such as accounting firms, tax accounting firms or laws firms for checks. The AICs can also rely on professional conclusions of check results of Other Government Departments or professional institutions in accordance with the law.

 

The AICs shall disclose random check conclusions to the public through the Disclosure System.

 

Article 15.             When the AICs conduct random checks in accordance with the law or conduct checks based on reports they received on enterprise disclosed information, enterprises shall cooperate with the AICs for enquires and checks, truthfully report the facts, and provide pertinent documents.

 

Where an enterprise lacks cooperation severely, the AICs shall make disclosure of such lack of cooperation through the Disclosure System.

 

Article 16.             Citizens, legal persons or other organizations shall not alter enterprise disclosed information illegally and shall not obtain enterprise information illegally.

 

Article 17.             Under any of the following circumstances, an enterprise shall be listed in an abnormal operation recording system (the “Abnormal System”) by the AICs at or above the county level and disclosed to the public through the Disclosure System as a reminder; where the circumstances are severe, an enterprise shall be subject to administrative penalties by pertinent government departments pursuant to laws and regulations; where the circumstances cause losses to others, an enterprise shall take liability for compensation in accordance with the law; if the circumstances constitute a crime, an enterprise shall be subject to criminal liability in accordance with the law.

 

1)         Failure to disclose annual reports within the time period stipulated by the Regulations or failure to disclose pertinent enterprise information within the time period ordered by the AICs;

2)         Concealing facts or falsifying information.

 

If an enterprise listed in the Abnormal System fulfills its disclosure obligations, the AICs at or above the county level shall remove it from the Abnormal System. If an enterprise fails to fulfill its disclosure obligations for three years, the AIC of the State Council or the AICs of provinces, autonomous regions, and municipalities directly under control of the Central Government shall list such enterprise in a severe violation recording system (the “Violation System”), and disclose such violation to the public through the Disclosure System. Legal representatives, persons in charge of the enterprise listed in the Violation System shall not act as legal representatives or persons in charge of other enterprises.

        

If the violation stipulated in the first paragraph has not occurred in the following 5 years since the date of an enterprise being listed in the Violation System, such enterprise shall be removed from the Violation System by the AICs of State Council or the AICs of provinces, autonomous regions, and municipalities directly under control of the Central Government.

 

Article 18.             The People’s Government at or above the county level and pertinent government departments shall establish a credit restraint mechanism, and shall deem enterprise information as a key indicator in government procurements, constructions tenders, grant of state-owned land, and honor conferring, etc.. Enterprises listed in the Abnormal System or the Violation Systems shall be restricted or prohibited from the aforementioned in accordance with the law.

 

Article 19.             Where a government department fails to perform its duties pursuant to the Regulations, corrective actions shall be ordered by its supervision department, or its superior department in charge; where circumstances are severe, the persons who are directly in charge and others who are directly responsible for such failure shall be subject to disciplinary measures in accordance with the law; if such failure constitutes a crime, the aforementioned persons shall be subject to criminal liability in accordance with the law.

 

Article 20.             Illicit alteration of disclosed enterprise information or illicit obtaining of enterprise information shall be subject to legal liability pursuant to laws and regulations.

  

Article 21.             Citizens, legal persons or other organizations can apply for administrative reconsideration or bring administrative lawsuits when they believe their rights being infringed by the government departments generated during their performance of duties of enterprise information disclosure.

 

Article 22.             Information disclosure pursuant to the Regulations does not exempt disclosure obligations under other laws and regulations.

 

Article 23.             The Regulations on disclosure of enterprise information are applicable to organizations authorized by laws and regulations to manage public affairs during their disclosure of enterprise information.

 

Article 24.             The AICs of State Council is responsible for establishing technical rules of the Disclosure System.

 

Measures of information disclosure by self-employed individuals and specialized farmer cooperative enterprises will be separately formulated.

 

Article 25.             The Regulations shall come into force as of October 1, 2014.



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