Provisional Regulations on Enterprise Information Disclosure (“Regulations”) (企业信息 公示暂行条例), issued by the State Council

As referred to in our Legal Flash of April 2013, the State Council issued the draft  Provisions on Information Disclosure by Enterprises on April 17, 2014 (“Draft”).  After soliciting public comments, the  State Council has officially  enacted the  Regulations, replacing  the  annual check system for  enterprises (“Enterprises”) with an online public annual report system.

The Regulations introduce slight changes to the Draft. The main highlights in the  Regulations are as follows:

  • 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”) will publish the status  of the  companies’ 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.
  • Enterprises are obliged to submit their annual reports by  June 30 of the  following year, and  must modify the reported information  if there  are any  mistakes or omissions.
  • The annual reports must include the following information:

Mandatory information.

  • Enterprise’s address, postcode, telephone number and email  address.
  • Corporation status, such as  incorporation, existing, suspended or liquidated.
  • Investments made by  and the share equity of other companies  acquired by the Enterprise.
  • Capital  subscribed by each shareholder, capital  disbursed by each shareholder, and  capital  disbursement timeframe and method (in  cash or in kind).
  • Shareholding alteration  for reasons such as equity transfer by  Enterprise’s shareholder. Website name and other information on online business (if any).

Voluntary information.

  • Number of employees.
  • 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).
    • Shareholding alteration  for reasons such as equity transfer by  Enterprise’s shareholder.
    • Obtaining, modifying or renewing an administrative license.
    • Registering pledge of intellectual property rights.
    • Administrative sanctions imposed.
    • Other relevant information.
  • The AIC will set up a public directory of abnormally operated Enterprises that either fail to fulfill the obligations  required under the Regulations or submit  false  information. Enterprises will be removed from this  directory if  they remedy their breaches within three years.
  • The AIC will set up a directory of Enterprises that are serious offenders and have been on  the  directory of  abnormally  operated Enterprises  for  three years. Legal  representatives or persons in charge  of serious offenders will not be allowed to assume this position in another company. Enterprises will  be removed from the directory of serious offenders after they have complied with the Regulations for five years.

Date of issue: August 7, 2014. Date of effectiveness: October 1, 2014.