On August 27, 2015, the State Administration for Industry and Commerce (“AIC”) published the Administrative Provisions on Business Scope Registration for Enterprises (“New Provisions”), which amended the original Administrative Provisions on Business Scope Registration for Enterprises (“Original Provisions”) that came into effect on July 1, 2004. The New Provisions include amendments which aim to facilitate the AIC registration system, reflect the State Council “license before certificate” concept, and relax conditions for AIC registration. The New Provisions became effective as of October 1, 2015. The New Provisions’ amendments may be summarized as follows:

Broadening the Wording of Business Scope Registrations

The New Provisions set forth the principle that enterprise applicants are to submit the wording for their business scope, and also broaden the scope of business category applications and the wording of registrations. In accordance with the New Provisions, an enterprise may itself choose the wording of its business scope with reference to the sections, subcategories or categories found in the Industrial Classifications for National Economic Activities (“Classifications”). In the case of ambiguous wording in the Classifications, or for emerging industries or specific business projects not included therein, enterprises may instead refer to policy documents, industry practices, or professional literature. This change reflects policymakers’ respect for the autonomy of enterprises and the relaxation of pre-conditions for registration as required by the AIC registration reforms.

Cancelling the Division of Business Scope

The New Provisions abandon the division of business scope as stipulated by the Original Provisions, which required operating items in the business scope to be divided into “licensed items” and “general items.” In addition, in order to provide more flexibility to the registration process, the original “licensed items” are now to be classified as either Pre-registration Licensed Items that require administrative approval before registration or Post-registration Licensed Items that require administrative approval after registration, based on the sequence of administrative approvals and AIC registration.

Adjusting the Particulars of Registered Business Scope

The New Provisions’ amendments no longer require the registration of an operating term for Pre-registration Licensed Items. In addition, in accordance with the State Council’s principle of further reducing administrative examinations and lowering the standard for market entry, the New Provisions clearly stipulate that Pre-registration Licensed Items shall be registered after the issuance of and in accordance with the required licenses, while non-Pre-registration Licensed Items are to be registered directly with the AIC with reference to the Classifications as well as relevant policy documents, industry practices, or professional literature. For Post-registration Licensed Items, the registration authority shall add at the end of the business scope the phrase "(in case of licensed business items, business operations shall commence only after approval by the relevant authorities)."

Adjusting and Increasing License Information Disclosure Requirements

The New Provisions specify that an enterprise shall publicly disclose the acquisition of, and amendments to, its administrative approvals through the enterprise credit information disclosure system. Specifically, where an enterprise business scope includes licensed items, the enterprise shall disclose the name of the approval or certificate, the approving authority, the matters approved, and the period of validity through the enterprise credit information disclosure system within 20 working days of obtaining the approval document or certificate. An enterprise whose business scope includes Pre-registration Licensed Items at the time of establishment shall make a public disclosure within 20 working days of the date of establishment. Enterprises are also required to make public disclosures through the enterprise credit information disclosure system of any amendments to an approval or certificate within 20 working days of such amendment.

The amendments found in the New Provisions constitute a part of the AIC registration system reforms and serve as an ancillary to other amendments previously made to the Company Law and the Administrative Regulations on Company Registration. The New Provisions reflect the principles of respecting enterprise autonomy, easing AIC registration conditions, and realizing the facilitation of AIC registration. The reform of the AIC registration system is closely related to enterprise and social development, and involves the adjustment, update, and improvement of laws, regulations and normative documents in various aspects.