Regulations of the PRC on Registration and Management of Market Entities Will Come Into Force in March Next Year
On August 24, China's State Council announced the Regulations of the People's Republic of China on the Registration and Administration of Market Entities (hereinafter referred to as "the Regulations"), which consolidate the administrative regulations on the registration and administration of market entities that have been introduced, and make unified regulations on the registration and administration of all types of enterprises, individual businesses, foreign company affiliated agency, etc. that engage in business activities for profit in China, effective from March 1, 2022. The regulations will come into force on March 1, 2022. Compared with the past, the "Regulations" has made two major breakthroughs.
First, the Regulations significantly enhance the convenience of registration of market entities. Article 6 of the Regulations provides that "the implementation of on-the-spot closing, a closing, time-limited closing and other systems to achieve centralized, near, online, off-site can be done", significantly reducing the cost of registration of market entities. The Regulations also put forward requirements for the efficiency of registration services, providing that the registration authority shall be registered on the spot if the application materials meet the statutory requirements; can not be registered on the spot, generally should be registered within three working days.
Second, the Regulations for the first time in China to establish a system of closure. In order to help enterprises in difficulty in the post-crisis phase of the new crown epidemic to obtain a respite and rest, to assist such enterprises to reduce the cost of maintaining the qualification of market entities, Article 30 of the Regulations specifically draws on the 'inactive companies' system in Hong Kong, China, the first time to establish a system of closure. The "Regulations" clearly, due to natural disasters, accidents and disasters, public health events and other business difficulties, market entities may independently decide to close for a certain period of time and to the registration authorities for the record, the maximum hiatus shall not exceed three years.
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