Measures for the administration of foundations
August 30(th), 2005
(the State Council DecreeNo. 1988 18 was promulgated and implemented on September 27th)
Article 1 These Measures are formulated in order to strengthen the management of foundations and promote their healthy development.
Article 2 The term "foundation" as mentioned in these Measures refers to a private non-profit organization that manages voluntary donations from social groups, other organizations and individuals at home and abroad, and is a social group legal person.
The purpose of the foundation's activities is to promote the development of public welfare undertakings such as scientific research, cultural education and social welfare through financial support.
These Measures shall not apply to foundations and other special fund management organizations funded by the state for scientific research.
Article 3 To establish a foundation, the following conditions must be met:
(1) The nature, purpose and source of the fund conform to the provisions of Article 2 of these Measures;
(2) Its registered capital is more than RMB100000 (or it has foreign exchange equivalent to RMB100000);
(3) Having the articles of association, management organization and necessary financial personnel of the foundation;
(4) Having a fixed workplace.
Article 4 The Foundation may raise funds from domestic and foreign enterprises, institutions, social organizations, other organizations and individuals who are enthusiastic about its activities, but it must be voluntary by donors, and apportionment is strictly prohibited.
Article 5 The leading members of the foundation shall not be concurrently held by the current government staff.
Foundations shall practise democratic management, establish a strict system for raising, managing and using funds, and regularly publish revenue and expenditure accounts.
Article 6 The funds of the Foundation shall be used to finance activities and undertakings that conform to its purpose, and shall not be used for other purposes. The foundation shall not operate and manage enterprises.
Article 7 A foundation may deposit its funds in financial institutions to collect interest, or purchase securities such as bonds and stocks, but the amount of shares purchased by the foundation shall not exceed 20% of the total shares of the enterprise.
Article 8 The Foundation has the right to supervise the use of the funded funds by the recipients. If it is found that the funds are not used according to the original agreement, the foundation has the right to reduce, stop or recover the funded funds.
Article 9 The salaries and office expenses of the staff of the Foundation shall be paid from the income such as interest of the Fund.
Article 10 The foreign exchange donated by foreign countries to the Foundation belongs to the Foundation, and a foreign exchange deposit account may be opened.
Materials donated by foreign countries to the Foundation are exempt from customs duties and belong to the Foundation. The foundation has the right to transfer it as a grant to other units or individuals related to its purpose free of charge, but it may not be sold.
Eleventh the establishment of a foundation shall be reported to the People's Bank of China for examination and approval by the centralized management department, and the civil affairs department shall register and issue a license before conducting business activities.
The National Foundation shall report to the People's Bank of China for examination and approval, apply to the Ministry of Civil Affairs for registration, and file with the State Council. Local foundations shall be submitted to the branches of the People's Bank of China in provinces, autonomous regions and municipalities directly under the Central Government for examination and approval, and shall apply to the civil affairs departments of the people's governments of provinces, autonomous regions and municipalities directly under the Central Government for registration.
The change of name, merger or cancellation of a foundation shall be handled in accordance with the procedures for applying for establishment.
Article 12 A foundation shall report its financial revenue and expenditure and activities to the People's Bank of China and the civil affairs department every year, and accept its supervision.
When the activities of the Foundation violate these measures, the People's Bank of China has the right to stop payment, freeze funds and order rectification, and the civil affairs department has the right to give a warning and revoke the license.
Article 13 These Measures shall be organized and implemented by the People's Bank of China and the Ministry of Civil Affairs, and corresponding implementation rules may be formulated.
Article 14 These Measures shall come into force as of the date of promulgation.