 |
|
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
COMMERCIAL
ORDINANCE OF THE SHENZHEN SPECIAL ECONOMIC ZONE
(Adopted at the Thirty Third Session of the Standing Committee
of the Second People"s Congress of Shenzhen
Municipality on June 30, 1999)
SUBJECT: INDUSTRY AND COMMERCE ADMINISTRATION; SPECIAL ECONOMIC ZONES
ISSUING-DEPT: SHENZHEN SPECIAL ECONOMIC ZONE
ISSUE-DATE: 06/30/1999
IMPLEMENT-DATE: 10/01/1999
LENGTH: 3853 words
TEXT:
Chapter One General ProvisionsArticle 1 With a view to identifying business qualifications and regulating business behavior, defending the lawful rights and interests of businesses, safeguarding the socialist market economic order, and promoting the development of the economy, this Ordinance has been enacted in accordance with the basic principles of the laws and administrative regulations and with consideration to the specific situation of the Shenzhen Special Economic Zone.
Article 2 This Ordinance applies to the businesses established and registered in the Shenzhen Special Economic Zone (hereinafter referred to as the SEZ) and the business activities conducted within the jurisdiction of the business registration authority of the SEZ.
Article 3 The lawful rights and interests of businesses are protected by laws, regulations and this Ordinance.
The business activities of businesses within the SEZ shall be conducted to conform to the principles of fairness, honesty and trustworthiness; shall not infringe upon the lawful rights and interests of other businesses or consumers; and shall not injure the public interests of society.
Article 4 For those issues that are not addressed in this Ordinance or other commercial laws of the State, the articles of associations of businesses or partnership agreements shall apply. For those issues that are not addressed in the articles of associations of businesses or partnership agreements, civil laws shall apply.
Chapter Two Businesses
Article 5 A Íbusiness± in this Ordinance means a for-profit natural person, legal person or other economic organization that has been lawfully registered and engages in professional business activities.
A business in this Ordinance refers to:
1. A business with limited liabilities, including all kinds of limited liability companies and their branches, non-corporate legal person entities and their branches;
2. An unlimited liability business, including enterprises without legal person status and their branches, partnerships and their branches, private small industrial and commercial businesses, and other economic organizations. ÍBusiness activity± in this Ordinance means the productive operation, wholesaling and retailing of commodities, scientific and technological development, consultation for clients, and other services performed by a business.
Article 6 Organs of state power, administrative organs, judicial organs, procuratorial organs, military organs and elementary and secondary schools funded by the government shall not establish any business or engage in business activities, with the exception of actions provided for by laws or regulations. The in-service employees of the above-mentioned organizations and the managerial personnel of state-owned enterprises shall not establish any business or engage in any business activities.
Article 7 Minors under the age of 16 shall not establish any business or engage in any business activities.
Minors and those without complete civil capacity may not become a partner in a business.
Chapter Three Commercial Registration
Article 8 An application shall be filed with the registration authority for the establishment, alteration and termination of a business in accordance with laws, administrative regulations and this Ordinance.
Article 9 The Municipal Administration for Industry and Commerce of Shenzhen City is responsible for the registration of businesses and the handling of commercial registrations in accordance with laws, administrative regulations and this Ordinance.
Article 10 Commercial registration may be classified into the registration of businesses with limited liability and the registration of businesses with unlimited liability.
The registration of businesses with limited liability shall be completed by registration authorities in accordance with relevant laws and administrative regulations.
The registration of businesses with unlimited liability shall be completed by authorized branches (or detached offices) of registration authorities in accordance with this Ordinance.
Article 11 The items required for registration of a business with unlimited liability are: business title, dwelling place (address), person(s)-in-charge, type of enterprise, business area, term of duration, name or title, address, and ID card number of investor(s) or partners.
Article 12 The following documents shall be submitted to the registration authority by applicants or their agents for the establishment of a business with unlimited liability:
1. an application for commercial registration printed by the registration authority and signed by the investor(s) or partner;
2. document specifying business title;
3. certificate of residence;
4. identification documents specifying the names (or titles) of the persons-in-charge, investors or partners;
5. partnership agreement(s);
6. other documents as required by the registration authority;
For those items that require the approval of relevant authorities, documents certifying their authenticity shall be submitted during the application for establishment.
Article 13 If any applicant for establishing an unlimited liability business submits false registration certificates to the registration authority, the registration authority may order such person(s) to make corrections and may impose a fine of RMB 5,000 yuan; where the infraction is especially serious, the commercial registration may be subject to cancellation.
The applicant attempting false registration or the provider of false certificates shall be responsible for any resulting legal liabilities.
Article 14 The registration authority shall decide within 20 days after receiving the application whether to accept or reject documents for establishing an unlimited liability business. Those applicants that meet the requirements shall be registered and granted a business license printed by the registration authority; those that do not meet the requirements shall not be registered, but shall be given a written reply specifying the reason for rejection.
Article 15 The date on which the business license is issued is the official date on which the unlimited liability business is established.
After obtaining the business license, the unlimited liability business may, by showing the business license issued by the registration authority, have its official seals made, open a bank account, and apply for taxation registration.
Before obtaining the business license, the unlimited liability business may not engage in business activities using the title it intends to adopt.
For any violation of the third paragraph of this article, the registration authority may impose a fine of not less than RMB 3,000 yuan but not more than RMB 5,000 yuan.
Article 16 If any of the registered items change, the unlimited liability business shall apply to the registration authority for alteration registration within 15 days after the occurrence of the change.
For any violation of the previous paragraph, the registration authority may order the offender to make corrections within a specified period of time; failure to make such changes will subject the offender to a fine of not less than RMB 1,000 yuan but not more than RMB 3,000 yuan.
Article 17 Any unlimited liability business that plans to suspend its business activities for six months or more must apply to the registration authority for business-suspension registration.
For any violation of the previous paragraph, the registration authority may temporarily withhold the business license of the offender or cancel its business license according to relevant laws and administrative regulations.
Article 18 Where an unlimited liability business terminates its business activities, it shall apply to the registration authority for termination registration and submit the following documents:
1. termination registration application printed by the registration authority and signed by the investor(s) or partners;
2. business license;
3. credit and debt liquidation report signed by investor(s) or partners;
4. certificate of payment of taxes;
5. other documents required by the registration authority;
No unlimited liability business may escape from its liable debts by applying for termination registration. A business which hides its debts in applying for termination registration shall have its registration canceled by the registration authority upon discovery and will be subjected to a fine of not less than RMB 3,000 yuan but not more than RMB 5,000 yuan.
Article 19 Any unlimited liability businessperson must, between January 1 and April 30 each year, apply to the registration authority for annual inspection and submit the relevant documents required by the registration authority.
For any violation of the previous paragraph, the registration authority may impose upon the offender a fine of not less than RMB 500 yuan but not more than RMB 3,000 yuan and order it to accept annual inspection within a specified period of time; where the offender fails to accept the annual inspection within the required time frame, the registration authority may cancel its business license in accordance with relevant laws and administrative regulations.
Article 20 A limited liability business or partnership shall, within 30 days after the approval of the application for establishment, alteration or termination of the business, make a public announcement of the business scope or modifications to that scope. The publicly announced modifications shall be the same as those noted in the business registration.
For any violation of the previous paragraph, the registration authority may order the offender to make corrections within a specified period of time; where the offender fails to make the corrections in due time, it shall be subject to a fine of RMB 5,000 yuan.
Any modification that has been registered but not publicly announced shall not be used for rejecting legal claims by any other person.
If any publicly announced item is not the same as that registered, it may not be used to reject a claim by any other person; if an inaccurate public announcement results in a loss to a third party, the offender shall bear corresponding civil liabilities to the third party.
Article 21 Any person may apply to the registration authority to obtain or copy documents related to the registered items of the business, with the exception of those documents that involve trade secrets of the business.
Article 22 The registration authority shall exchange registered materials with the taxation administration in charge.
Article 23 Where a private small business of industry or commerce seriously violates the provisions of this Ordinance concerning the registration of unlimited liability businesses, the registration authority may cancel its business license.
Article 24 Where an applicant believes that its application meets the requirements for establishing a business but has been rejected by the registration authority, or a business refuses to accept administrative penalties for commercial registration concerns, it may apply to the People"s Government of Shenzhen Municipality for reconsideration within 15 days after receiving the administrative decision, or it may file an administrative suit directly with the People"s Court within 3 months.
Article 25 Where a registration authority approves any application that does not satisfy the requirements for commercial registration, the registration authority shall administratively sanction the person(s)-in-charge responsible for the registration as well as those who are found to be directly responsible; if such an offense constitutes a crime, the person(s) shall be held responsible for criminal liabilities.
Chapter Four Title of Business and Transfer of Business
Article 26 A business shall possess its own title.
The title of a business consists sequentially of the following: title of the administrative division, name of the business, features of the trade or operation, and type of organization. Where it is otherwise provided in laws or regulations, such provisions shall apply.
Article 27 If the investor in a business is a natural person, that person may use his or her own name as the name of the business.
Article 28 A name of a business shall consist of not less than two characters.
The writing or contents of a name applied for registration shall not:
1. be harmful to the state or social public interest;
2. contain references to feudalism or superstition;
3. violate social ethics or fair practice;
4. have unfavorable or unhealthy political implications or have racial discrimination or ethnic discrimination implications;
5. be the same as the name of an administrative division on the county level or above;
6. be similar in sound or writing to business names already registered by other persons, so that it could be easily mistaken for the business name of others;
7. consist of Arabic numbers or letters of a foreign language;
8. otherwise be forbidden by law or administrative regulations.
Article 29 The principle of advance approval applies to business titles. After approving a business title, the registration authority shall issue to the applicant a document for using the title; if the applicant has no record of using the title within six months after it was approved, the registration authority will automatically cancel it.
Article 30 No one may use the business name of any other person already registered within the jurisdiction of the SEZ as his or her own business name registered in the SEZ, unless there is an investment relationship or franchised management according to a franchise agreement.
Article 31 A business name that is not identical with a registered trademark or does not involve a trademark may be transferred separately, but to only one transferee.
When separately transferring a business name or title, the transferer may not continue to use the transferred business name or title within the same jurisdiction of the registration authority.
If the transfer of a business name or title has not been registered, it shall not be used to reject legal claims of any other person; the transferer and transferee shall be jointly and fully liable for compensation owed to third parties.
For any violation of Paragraphs 1, 2, or 3 of this article, the registration authority may order the offender to make corrections. If the offender fails to make corrections in due time, it may be subjected to a fine of RMB 5,000 yuan.
Article 32 The transferer and transferee of a transfer of business operations shall complete alteration registration or other necessary formalities required by law.
Article 33 The transfer of a business is defined as the transfer of business assets including the business title from one party to another. Where the transferee does not use the business title obtained through the business transfer, the registration authority will automatically cancel the registered title.
A limited liability business may transfer its branch organizations, restricted to property transfers; the transferee shall not use the business title of the transferred branch organization. An unlimited liability business may not transfer its branch organizations.
Article 34 During a business transfer, the transferer and the transferee shall enter into a contract which specifies the tranferer"s existing financial and legal obligations.
Article 35 If the transferee publicly announces its intention to assume the obligations of the transferer, regardless of whether it uses the business title obtained through the transfer of business, creditors of the transferer may ask the transferee for repayment of obligations.
Article 36 Where the transferee assumes the obligations of the transferer, creditors of the transferer must place claims with the transferee within one year after the business transfer takes effect or after the public announcement.
Chapter Five Trade Books
Article 37 A business shall establish financial and accounting systems in accordance with laws, administrative regulations, rules of the departments of the State Council in charge of finance, and this Ordinance.
Article 38 A business shall have accounting books from the commencement of business activities.
Accounting books and balance sheets shall be kept to create a record of the business"s assets, profits and losses.
Article 39 A business may use electronic accounting books, but the existing data shall not be destroyed during the substitution of financial software.
Article 40 A business shall keep a detailed written record of transactions listed in order of occurrence; where there are different provisions in other laws or administrative regulations, such provisions shall apply.
Article 41 All assets and their respective values at the commencement of business and at the end of each year shall be recorded in accounting books.
The accountant shall make balance sheets which summarize the accounting books and shall affix his or her signature to the balance sheets.
Article 42 The items that may have bearing on transactions and operational property as listed below shall be recorded in accounting books:
1. cash flow and quantitative changes in negotiable securities;
2. changes in finances and the use of finances;
3. occurrence and settlement of credits and debts;
4. changes in the amounts of capital and funds, receipt of funds, and payment of expenses;
5. calculation of earnings, expenses and costs;
6. calculation and handling of accounting results;
7. other items that need to be officially recorded.
Article 43 A person or persons shall be designated by the business to be responsible for the keeping of trade books.
The shelf life of trade books shall be subject to the provisions of law, administrative regulations, and other provisions of the departments of the State Council in charge of public finance.
Article 44 Judicial, taxation, auditing and registration authorities may, upon the request of investors or shareholders, partners, or other interested parties, order parties to a legal suit or businesses to submit all or some of the trade books.
Chapter Six Business Employees
Article 45 A business may appoint managers to conduct specific business operations in accordance with the articles of association or the partnership agreement.
Article 46 A business may employ a number of managers (including deputy managers) to be responsible for business operations.
Any one of the agents may, with business authorization, conduct business activities. All such activities shall be valid and binding to the business.
Article 47 The manager shall be entitled to handle all kinds of business operations within the scope of authorization.
The manager shall be authorized to nominate deputy managers and financial officers and may appoint and dismiss employees lower than deputy manager.
Article 48 Restrictions on the manager"s authority to execute business transactions may not be used to void legitimate agreements with third parties, excepting cases where the manager is unauthorized to vouch for another person or cases where the manager is unauthorized to sign contracts involving immovable properties of the business.
Article 49 The manager shall follow regulations prohibiting business strife as provided in the Company Law of the People"s Republic of China, and shall not engage in any business activity that is the same as that of the employing business.
A business may deem the transactions of a manager who violates his or her obligations as the transactions of the business and claim for itself any resulting financial gains the manager receives.
The right mentioned in the previous paragraph will no longer apply should the business fail to exercise it within three months of learning of the manager"s violation of his or her obligations or within one year of the manager"s handling of the transaction.
Article 50 The head of the branch organizations of a limited liability business has powers and duties similar to that of the manager, with the exception that he or she may not represent the business in litigation.
Chapter Seven Mercantile Agents
Article 51 A mercantile agent is an independent business that represents other businesses or facilitates the transactions between businesses.
A mercantile agent empowered by a principal business to engage in business operations within the SEZ in referred to as a regional agent.
A mercantile agent empowered by the principal to exclusively engage in procuratory activities is referred to as an exclusive agent.
Article 52 An agency contract shall be entered into between the agent and principal business before the agent represents other businesses or facilitates the transactions between the principal and other businesses; otherwise, the activities of the agent shall apply to the relevant provisions of civil laws.
Where the agency contract expires and both parties to the contract fail to renew it but continue to uphold the original contract, the original contract shall be deemed as a non-scheduled contract.
Unless both parties agree otherwise, either party may terminate the non-scheduled contract but must notify the other party thirty days in advance.
Where the contract is terminated because of serious breaches of contract by either party or because of events beyond the control of the parties, the provisions in the previous paragraph shall not apply.
Article 53 A mercantile agent shall perform its obligations according to the provisions of the agency contract so as to defend the rights and interests of the principal.
The principal shall provide the support necessary to allow the agent to meet its obligations.
Both the agent and the principal are obligated to provide relevant information to the other party in facilitating transactions between themselves or between the principal and other businesses.
Article 54 Unless it is clearly stated otherwise in the agency contract, a mercantile agent may concurrently accept the commission of two or more principals or engage in business that may compete with the principal.
Article 55 No mercantile agent may disclose to any third party business secrets of the principal without authorization. The agent remains under such obligations even if the agency contract has expired.
Article 56 When the legal relationship between the principal and the agent is terminated, both parties may conclude agreements preventing the agent from engaging in similar businesses within a reasonable period of time after the termination of agency relationship; however, the reasonable period time shall not be longer than two years starting from the day the agency relationship is terminated.
The agent may demand that the principal provide reasonable compensation for such restrictions.
If the agency contract is terminated due to violations committed by the agent, the agent shall not have the right to claim compensations as mentioned in the previous paragraph.
Article 57 The principal shall pay its agent due compensation in accordance with the provisions of the agency contract.
If the sum of the compensation is not specified in the contract, the agent shall be entitled to reasonable compensation for the services that it was authorized to provide.
Article 58 Where the agent has provided services to the principal to facilitate transactions, but the transaction fails due to the fault of the principal, the agent shall be entitled to reasonable compensation from the principle.
Article 59 If, within six months after the agency contract is revoked, the principal concludes a transaction that may have resulted from the services of the agent, the former agent has the right to claim compensation for these transactions, unless the agency contract is revoked due to the fault of the agent.
Article 60 The regional agent shall be entitled to claim compensation for transactions concluded by a principal within the jurisdiction of a regional agent, regardless of whether the agent has engaged in these transactions.
Article 61 The revocation of agency contracts shall apply to contract laws.
Article 62 An agent shall enjoy creditor rights against its principal for the agent"s efforts or facilitation of transactions.
If the obligations to the creditor have not been met by the time the term for payment expires, the agent may retain the goods or negotiable securities in its possession, unless it is forbidden to retain such goods or negotiable securities by law or agreement.
Chapter Eight Supplemental Provisions
Article 63 The provisions concerning business titles, managers, public announcement of business registrations, and trade books shall not apply to private small businesses of industry and commerce.
Article 64 The People"s Government of Shenzhen Municipality may enact detailed rules for implementation in accordance with this Ordinance.
Article 65 This Ordinance takes effect as of October 1, 1999.
