Provisions on Information Disclosure by Enterprises (Draft for Comments) (“Draft”)(企业信息公示条例(征求意见稿)), issued by Legislative Affairs Office of the State Council

Under the amended PRC Company Law and several administrative regulations recently revised by State Council, the annual check system for enterprises will be replaced with an online public annual report system. The Draft establishes the public reporting system and sets out the following rules:

  • The Draft applies to limited liability companies, limited companies by shares, non-company legal persons, partnerships, sole proprietorships, and their branches (referred to collectively as “Enterprises”).
  • The provincial government will establish the online reporting system for its jurisdiction and coordinate with other relevant authorities to share and manage the information the Enterprises submit.
  • The Administration for Industry and Commerce (“AIC”) shall publish the companies’ status of registration and filing, pledge of immoveable assets, pledge of equity, administrative sanctions and other information, within 20  working  days  from  receiving  this  information  during  the  business transaction.
  • The Enterprises are obliged to submit their annual report by June 30 of the following year, and must modify the reported information if there are any mistakes or omissions.
  • These annual reports must include the following information:

Mandatory information

  • Capital subscribed by each shareholder, capital disbursed by each shareholder, and capital disbursement timeframe and method (i.e. in cash or in kind).
  • Employees’ names, addresses, postcodes, telephone numbers and email addresses.
  • Transaction status, such as incorporation, existing, suspended or liquidated.
  • Overseas investments.
  • Website name and other information on online business (if any).

Voluntary information

  • Financial statements, such as total assets, total liabilities, total revenues, operating income, total profits, net profits and total taxation.
  • Enterprises must report the following events within 20 working days:
    • Capital subscribed and disbursed by each shareholder, and capital
      disbursement timeframe and method (in cash or in kind).
    • Obtaining the business license and any changes to it.
    • Pledge of intellectual property rights.
    • Imposition of administrative sanctions.
    • Other relevant information
  • The AIC will carry out random checks on the online information Enterprises report, and publish its results.
  • The AIC will set up a directory, to be disclosed publicly, of Enterprises that do not fulfill the required obligations and cannot be contacted through the information provided. Enterprises will be removed from this directory if they remedy their breaches within three years.
  • Enterprises that have been on this directory for three years, submit false information or whose business license has been revoked will be listed in a directory of serious offenders. Enterprises will be removed from this directory if they do not commit any further offenses within five years of being added to it.

Date of issue: April 17, 2014. Deadline for public comments: May 18, 2014.