Views On Experiments Carried Out By High-Tech Enterprises In Z-Park In Registration, Restructuring And Reorganization

Appendix No.2 -- Document No.127 issued by the Beijing Municipal Administration for Industry and Commerce in 2000

These views have been formulated for the purpose of implementing the essence of the written reply of the State Council to questions related to construction the Zhongguancun Science Park, further improving the park's environment for making scientific and technological innovations, pushing forward the experiments carried out by high-tech enterprises in the Zhongguancun Science Park in registration, restructuring and reorganization, and promoting the rapid, sound and orderly development of high-tech enterprises.

One. Practice Multiple Forms of Contributing Investments and Encourage Establishment of High-Tech Enterprises

1. Adjusting the standard for the registered capital of limited-liability companies among high-tech enterprises. Those with a registered capital of more than 30,000 yuan (including 30,000) shall be permitted to register.

2. Registered capital (fund) shall be permitted to be contributed by stages. High-tech enterprises with a registered capital of more than one million yuan (including one million yuan) may have their registered capital arrive by stages and pay such capital within two years. In case a company pays 30 percent of its total registered capital within six months after its establishment, it shall promise to pay all the rest within two years after its establishment. The administrative department for industry and commerce shall, according to the actual payment of the registered capital by a company, define the valid period of the company's business license, and indicate in the business license the actual amount of the registered capital paid by the company and the company's operational duration.

With regard to those whose actually paid registered capital cannot meet the requirement on the arrival of the registered capital by stages, the

administrative department for industry and commerce shall not permit them to pass the annual inspection.

The shareholders of an enterprise shall assume limited liability for the enterprise's debts in the form of the ratio of contributing investments in the registered capital.

3. The guarantee funds for the registered capital of high-tech enterprises shall provide the fund guarantee for the registration of such enterprises.

The ceiling for the registration and guarantee fund applied by an enterprise shall be one million yuan. The registration and guarantee fund may offer either the full-amount guarantee or the partial guarantee to the primary registered capital of high-tech enterprises. Within the guarantee period (the longest may not exceed two years), the shareholders shall pay the full amount of the registered capital. In case the registered capital may not be paid in full within the prescribed time limit, the enterprise shall handle the procedures on canceling its registration.

As regards those establishing enterprises by using high-tech findings as the investment, their high-tech findings shall be examined, verified and defined by the guarantee agency after being certified by the competent department for science and technology. The agency shall provide for them full-amount guarantee or the partial guarantee.

Should enterprises increase their registered capital (funds), they shall be subject to the certification of qualification for high-tech enterprises, and with examination and verification by the guarantee agency, shall be offered the full-amount guarantee or the partial guarantee.

Within the guarantee period, the guarantee agency shall assume liability for an enterprise with the sum of money it guarantees as the ceiling, and shall exercise supervision over and auditing of the enterprises it guarantees.

The fees collected from the guarantee provided by the registration and guarantee fund shall not exceed the bank interest rates for enterprises' savings deposits during the same period.

4. Foreign companies are being encouraged to invest in establishing high-tech enterprises in the Zhongguancun Science Park. The companies whose investment accounts for less than 25 percent (excluding 25 percent) of their registered capital shall be regarded as domestically-funded enterprises in registration.

5. Those going abroad for advanced study are being encouraged to establish high-tech enterprises by contributing investments in the monetary or the non-monetary form. Their Chinese passports shall serve as the certificates for their investment qualification and the certificates for their identity as returned students.

Two. Appropriately Increase Radio of Investments Contributed by High-Tech Enterprises with Evaluated Invisible Assets

6. Investors are being encouraged to invest in high-tech enterprises in the park. Those contributing investments with their evaluated industrial property right and non-patented technology may have the ratio of the total sum of the evaluated right or technology to the registered capital (funds) may be as high as 60 percent, with the exception for those subject to agreements signed otherwise.

The ratio of contributing investments registered other than the property right and non-patented technology and associated liabilities shall be defined by the investors on their own in the form of contract, and specified in the articles of association of an enterprise.

That part of investments contributed by evaluated invisible assets shall partake in the distribution of enterprises' dividends.

Should the invisible assets in the registered capital (funds) be state-owned assets, they shall be evaluated by an asset evaluation agency. The evaluation results shall be certified by the department for managing state-owned assets.

This clause is applicable to foreign-funded enterprises in the Zhongguancun Science Park that are classified as high-tech enterprises.

Three. Adjust Pre-Examination and Pre-Approval Procedures Concerning Enterprises' Registration to Improve Examination and Approval Efficiency

7. Examination and approval items regarding special industries that are vital to national security and the lifeline of the national economy shall be retained. Examination and approval items related to people's health and personal safety shall be retained. Examination and approval items pertaining to principal products and monopoly commodities subject to state regulation shall be retained. All other items shall no longer be taken as pre-examination and pre-approval items. Various types of operational items subject to pre-examination and pre-approval as prescribed by current laws, decrees and regulations may be registered before being submitted to competent authorities for approval. In registering in the park, enterprises shall be subject to the provisions of the《Circular of the General Office of the Beijing Municipal Government on Endorsing the Experiments to be Carried out in the Zhongguancun Science Park in Reforming Pre-Examination and Pre-Approval System Concerning Enterprises' Registration》(Political Document No. 40 issued by the General Office of the Beijing Municipal Government in 2000.)

8. Should an enterprise apply for a special-item examination and approval or for administrative permission, the relevant pre-examination and pre-approval departments shall finish examination and verification within 15 working days from the date of receiving the application from the enterprise. The administrative department for industry and commerce shall put forward views on examination and verification within 15 working days from the date of commencing to handle the application from the enterprise for registration.

Four. Accelerate Process of Restructuring and Reorganization of High-Tech Enterprises in Park

9. With the certification by the original sponsor or the competent department, should an enterprise to be restructured not involve state-owned assets or collectively-owned ones, after the auditing and capital-checking agency with ready conditions exercises special-item auditing of its assets and defines the ownership of the assets, the enterprise may go directly to the administrative department for industry and commerce to handle registration for restructuring.

Should the restructuring of an existing enterprise involve state-owned assets, it shall be certified by the department for managing such assets. Should the restructuring of an existing enterprise involve collectively-owned assets, the restructuring plan shall be decided by the enterprise workers' congress.

10. As regards the inventory assets of an enterprise to be restructured, should the special-item auditing by the auditing and capital-checking intermediate agency demonstrate the absence of the principal part of contributing investments, the workers' congress of the enterprise shall define the property right to the inventory assets, in accordance with the principle on retaining 30 percent as collective assets and subjecting 70 percent to distribution with essential labor factors participating in distribution.

11. When domestically-financed enterprises are turned into foreign-funded enterprises or the other way round and when shareholding cooperative enterprises or jointly-run enterprises are restructured into the corporate-stem enterprises, their registered capital shall remain unchanged. Should the auditing by the auditing and capital-checking social intermediate agency demonstrate the arrival of the primary investment, such an enterprise may be exempt from asset evaluation and may go directly to the administrative department for industry and commerce to handle registration for restructuring.

12.While an existing enterprise restructures itself, should its property right be defined as collectively owned, a managerial agency for collectively-owned assets may be set up as a shareholder of the company (enterprise) to be restructured who shall enjoy the rights of shareholders and assume related obligations. The procedures on the registration for and management of managerial agencies for collectively-owned assets shall be formulated separately.

13. In the course of reorganizing assets, should an enterprise experience changes in the creditor's rights and debt relations caused by investments with overall net assets, merge of other enterprises by bearing debts, and withdrawing funds for leasing, but need to continue retaining the qualification for a legal person, if only it submits documents on debt inheritance and register itself according to registration for opening for business, it may continue using its original name and the original industrial examination and approval or the qualification for special-item examination and approval shall continue to be valid.

The Beijing Municipal Administration for Industry and Commerce shall be responsible for interpreting these Views.

Beijing Municipal Administration for Industry and Commerce

On May 16, 2000