provisional regulations of the people's Republic of China on private enterprises
chapter I general provisions
article 1 these regulations are formulated to encourage and guide the healthy development of private enterprises, safeguard their legitimate rights and interests, strengthen supervision and management, and prosper the socialist planned commodity economy.
article 2 the term "private enterprise" as mentioned in these regulations refers to a profit-making economic organization whose assets are privately owned and employ more than eight people.
article 3 the private economy is a supplement to the socialist public economy. The state protects the legitimate rights and interests of private enterprises. Private enterprises must engage in business activities within the scope prescribed by national laws, regulations and policies.
article 4 employees of private enterprises shall organize trade unions according to law. The legitimate rights and interests of employees are protected by state laws.
article 5 private enterprises may establish private enterprise associations.
chapter ii types of private enterprises
article 6 private enterprises are divided into the following three types:
(1) wholly-owned enterprises;
(2) partnership enterprises;
(3) a limited liability company.
article 7 a wholly-owned enterprise refers to an enterprise invested and operated by one person.
the investor of a sole proprietorship enterprise shall bear unlimited liability for the debts of the enterprise.
Article 8 A partnership enterprise refers to an enterprise in which two or more persons invest according to the agreement, operate together, and have negative profits and losses.
a partnership should have a written agreement.
the partners are jointly and severally liable for the debts of the enterprise.
article 9 a limited liability company refers to an enterprise in which investors are responsible for the company with their capital contribution, and the company is responsible for its debts with all its assets.
A limited liability company shall meet the following requirements:
(1) The company name shall indicate the words limited liability company or limited company;
(2) Having a company's articles of association that meet the requirements of these Regulations;
(3) The number of investors is more than two and less than thirty;
(4) The registered capital has obtained a legal capital verification certificate;
(5) An investor shall obtain the consent of other investors when transferring his capital contribution. If there are more than three investors, the consent of more than half of the investors shall be obtained;
(6) The registered capital shall not be reduced;
(7) No shares may be issued to the public.
where there are more than 3 investors in a limited liability company, a special declaration shall be made to the administrative department for industry and commerce, and registration can only be carried out after approval.
article 1 a limited liability company shall obtain legal person status according to law.
Chapter III Establishment and Closure of Private Enterprises
Article 11 The following persons may apply for establishing private enterprises:
(1) Rural villagers;
(2) unemployed people in cities and towns;
(3) individual industrial and commercial operators;
(4) Resignation and resignation;
(5) Retired personnel and other personnel permitted by national laws, regulations and policies.
article 12 private enterprises may engage in the production and operation of industries such as industry, construction, transportation, commerce, catering, service industry, repair industry and scientific and technological consulting within the scope prescribed by national laws, regulations and policies.
private enterprises are not allowed to engage in the production and operation of military industry and financial industry, and are not allowed to produce and operate products prohibited by the state.
Article 13 An application for starting a private enterprise shall meet the following conditions:
(1) Capital and employees commensurate with the scale of production, operation and service;
(2) Fixed business premises and necessary facilities;
(3) its business scope conforms to the provisions of national laws, regulations and policies.
Article 14 The articles of association of a limited liability company shall include the following items:
(1) Name and domicile of the company;
(2) the purpose and business scope of establishing the company;
(3) the registered capital and the capital contribution of each investor;
(4) the name and domicile of the investor and the rights and obligations of the investor;
(5) the organization of the company;
(6) conditions for dissolution of the company;
(7) conditions for investors to transfer their capital contribution;
(8) methods for profit distribution and loss sharing;
(9) Procedures for amending the Articles of Association;
(1) other matters that need to be prescribed.
Article 15 To apply for the establishment of a private enterprise, it is necessary to register with the local administrative department for industry and commerce with the relevant certificates, and it can only start business after being approved and issued with a business license.
article 16 when a private enterprise is divided, merged, transferred, relocated or changes its business scope, it shall go through the registration of change or re-registration with the administrative department for industry and commerce.
article 17 when a private enterprise closes its business, it shall apply to the administrative department for industry and commerce 3 days before it closes its business, and go through the cancellation of registration after approval.
when a private enterprise goes out of business, it shall liquidate its property and repay its debts.
article 18 when a private enterprise goes bankrupt, it shall go through bankruptcy liquidation and repay its debts, and the specific measures shall be formulated separately.
article 19 the registration of business commencement, change of registration and cancellation of registration of a private enterprise with the qualifications of a legal person shall be carried out in accordance with the regulations of the people's Republic of China on the administration of registration of enterprises as legal persons.
chapter iv rights and obligations of private enterprises
article 2 investors of private enterprises shall enjoy ownership of their property according to law, and their property may be inherited according to law.
Article 21 Private enterprises shall enjoy the following rights in their production and business activities:
(1) The names approved for registration shall enjoy the exclusive right within the prescribed scope;
(2) operate independently within the scope of approval and registration;
(3) to decide on the organizational setup of the enterprise, and to recruit or dismiss employees;
(4) to decide the wage system and profit distribution form of the enterprise;
(5) to formulate commodity prices and charging standards of enterprises in accordance with the provisions of the state on price management;
(6) concluding a contract;
(7) applying for a patent or registered trademark.
article 22 a private enterprise may, in accordance with the provisions of national laws and regulations, establish sino-foreign joint ventures and sino-foreign cooperative ventures with foreign companies, enterprises and other economic organizations or individuals, and may undertake processing of supplied materials, processing of supplied samples and assembly of supplied parts, and engage in compensation trade.
Article 23 A private enterprise shall perform the following obligations in its production and business activities:
(1) Abide by national laws, regulations and policies;
(2) Pay taxes according to law;
(3) Obey the supervision and management of the relevant state organs.
article 24 a private enterprise shall open an account with a bank or other financial institution in accordance with the relevant provisions of the state. Those who meet the prescribed conditions may apply for loans.
article 25 except as stipulated by national laws and regulations, no unit may ask private enterprises to provide financial, material and human resources in any way. The private enterprise has the right to refuse to provide the apportionment to the private enterprise, and the administrative department for industry and commerce has the right to stop it.
article 26 the business license of an enterprise as a legal person or the business license of a private enterprise shall not be withheld or revoked except that the administrative department for industry and commerce may withhold or revoke it according to legal procedures.
chapter v labor management of private enterprises
article 27 when recruiting employees, private enterprises must sign labor contracts in writing on the principle of equality, voluntariness and consensus, and define the rights and obligations of both parties. The labor contract of a private enterprise shall be filed with the local labor administrative authority.
Article 28 A labor contract shall include the following contents:
(1) Requirements on the quality and quantity of workers' labor;
(2) term of the contract;
(3) working conditions;
(4) labor remuneration, insurance and welfare benefits;
(5) labor discipline;
(6) liabilities for violating the labor contract;
(7) Other matters agreed by both parties.
article 29 labor disputes in private enterprises shall be handled with reference to the interim provisions on the handling of labor disputes in state-owned enterprises.
article 3 private enterprises must implement the relevant provisions of the state on labor protection, establish necessary rules and regulations, provide labor safety and sanitation facilities, and ensure the safety and health of employees.
private enterprises must take out insurance with insurance companies for employees engaged in industries or jobs related to personal health and safety.
private enterprises should provide social insurance for their employees if conditions permit.
article 31 private enterprises implement an eight-hour working system.
Article 32 Private enterprises may not employ child workers under the age of 16.
Article 33 Trade unions in private enterprises have the right to sign collective contracts with enterprises on behalf of employees, protect the legitimate rights and interests of employees according to law, and support the production and business activities of enterprises.
Chapter VI Finance and Taxation of Private Enterprises
Article 34 A private enterprise must apply to the local tax authorities for tax registration within 3 days after receiving the Business License of Enterprise as a Legal Person or the Business License.
article 35 a private enterprise must, in accordance with the national financial and accounting regulations and the provisions of the tax authorities, improve its financial and accounting system, equip accountants, establish accounting books, compile and submit financial statements, strictly fulfill its tax obligations, and accept the supervision and inspection of the tax authorities.
article 36 the salary of the director (manager or chairman) of a private enterprise can be determined within ten times of the average salary of the employees of the enterprise.
article 37 the income tax of private enterprises shall be implemented in accordance with the provisional regulations of the people's Republic of China on income tax of private enterprises and relevant regulations.
article 38 the portion of after-tax profits of private enterprises reserved for production development funds shall not be less than 5%. Due to special reasons, if the extraction ratio is less than 5%, it must be approved by the tax authorities.
the production development fund of a private enterprise can be used to expand its reproduction, invest in other enterprises, repay loans or make up for its losses. For other purposes, it must be approved by the tax authorities.
article 39 the income from wage income and after-tax profit distribution of private enterprise investors shall pay personal income adjustment tax according to law.
Chapter VII Supervision and Punishment
Article 4 The administrative department for industry and commerce shall strengthen the administrative management and supervision of private enterprises, protect legitimate business operations and investigate and deal with illegal business activities.
the competent departments of relevant industries shall, in accordance with the provisions of the state, provide business guidance, assistance and management to the production and business activities of private enterprises.
Article 41 If a private enterprise commits any of the following acts, the administrative department for industry and commerce shall, according to the circumstances, give it a warning, impose a fine, confiscate its illegal income, order it to suspend business for rectification, and revoke its Business License:
(1) Concealing the real situation during registration, practicing fraud or starting business without approval;
(2) engaging in business activities beyond the business scope approved and registered, or failing to go through the formalities of change registration, re-registration or cancellation of registration as required;
(3) forging, altering, leasing, transferring, selling or copying the Business License without authorization;
(4) engaging in illegal business activities.
if a private enterprise that has obtained the legal person status violates the regulations on registration management, it shall be punished in accordance with the regulations of the people's Republic of China on the registration management of enterprises as legal persons.
Article 42 If a private enterprise commits any of the following acts, the labor administrative organ shall give it a warning and a fine respectively according to the circumstances:
(1) Failing to engage in production and operation according to the provisions of the state on labor protection;
(2) employing child labor;
(3) infringing upon the legitimate rights and interests of employees.
article 43 if a private enterprise violates the provisions of article 38 of these regulations, the tax authorities shall give it a warning and a fine respectively according to the circumstances.
article 44 if a private enterprise refuses to accept the punishment decision made by the administrative organ in accordance with the provisions of articles 41 and 42 of these regulations, it shall, within 15 days from the date of receiving the notice, apply for reconsideration to the organ at the next higher level of the organ that made the punishment decision. The organ at the next higher level shall make a reconsideration decision within 3 days from the date of receiving the application. If the applicant refuses to accept the reconsideration decision, he may bring a suit in a people's court within 3 days from the date of receiving the notice.
if the applicant fails to apply for reconsideration or file a lawsuit with the people's court within the time limit, the punishment decision will take effect.
article 45 private enterprises that violate state laws and regulations on taxation, resources, industry and commerce administration, price, finance, measurement, quality, health and environmental protection shall be punished by the relevant authorities according to law.
article 46 if any staff member of the administrative organ violates the provisions of these regulations, abuses his power, engages in malpractices for selfish ends, accepts bribes or infringes upon the legitimate rights and interests of private enterprises, the relevant competent authorities shall impose administrative sanctions and economic penalties according to the circumstances; Those who violate the criminal law shall be investigated for criminal responsibility according to law.
Chapter VIII Supplementary Provisions
Article 47 The State Administration for Industry and Commerce shall be responsible for the interpretation of these Regulations; The implementation measures shall be formulated by the State Administration for Industry and Commerce jointly with relevant departments.
article 48 these regulations shall come into force as of July 1, 1988.