(Adopted at the 33rd meeting of Standing Committee of the Second Shenzhen Municipal People’s Congress on June 30, 1999; Revised by the 31st meeting of Standing Committee of the Second Shenzhen Municipal People’s Congress on April 16, 2004 )
Chapter I General Provisions
Article 1 In order to affirm qualification of merchants and standardize commercial acts, protect lawful rights and interests of merchants, maintain the order of socialist market economy and promote economic development, these regulations are hereby formulated according to basic principles of laws and administrative regulations and in light of the specific conditions of the Special Zone.
Article 2 These regulations shall be applicable to the merchants registered and established in Shenzhen Special Economic Zone (hereinafter referred to as “Special Zone”) and the commercial acts carried out within the jurisdiction of the commercial registration organizations in the Special Zone.
Article 3 The lawful rights and interests of merchants shall be protected by laws, rules and these regulations.
Where the merchants conduct commercial acts in the Special Zone, they shall abide by the principles of justice and good faith and shall not infringe upon the lawful rights and interests of other merchants and consumers or engage in any activities detrimental to the social and public interests.
Article 4 Merchant article and partnership agreement shall be applicable to the matters that are not specifically stipulated by these regulations and the commercial law of the state, whereas the civil law shall be applicable in case relevant provisions absent in the merchant article and partnership agreement.
Chapter II Merchants
? Article 5 Merchants refer to natural persons, legal persons and other economic organizations, which are registered according to laws to undertake commercial acts as their regular vocation in their own names for the purpose of making profits.
In these regulations, merchants refer to:
?? (1) Limited liability merchants, including limited liability companies of all kinds and their subsidiaries, enterprises with legal personality other than corporations and their subsidiaries; and
(2) Unlimited liability merchants, including enterprise without legal personality and their subsidiaries, partnership organizations and their subsidiaries, individual businesses and other economic organizations.
In these regulations, commercial acts refer to the acts such as productions and operations, wholesale and retail of commodities, science and technology development and provision of consulting service and other services, which are carried out by the merchants.
Article 6 Any organizations of state powers, administrative organizations, judicial organizations, procuratorial organizations, military organizations or primary and high schools invested by the government shall be prohibited to establish merchants and conduct commercial acts. But the provisions of laws and regulations shall be applicable in case they stipulate otherwise.
Any staffs in post of the above mentioned organizations or managerial staffs of state-owned enterprises shall be prohibited to establish merchants and conduct commercial acts.
Article 7 Any minors under the age of 16 shall not establish merchants and conduct any commercial acts.
Any minors or other persons without full civil capacity shall not become partners of the merchants.
Chapter III Registration of Merchants
??? Article 8 The establishment, alteration and termination of merchants shall be applied to the Registration Organization according to laws, administrative regulations and these regulations.
Article 9 The Shenzhen Municipal industrial and commercial administration department, which is the agency for registration of merchants (hereinafter referred to as “Registration Organization”), shall handle commercial registration in accordance with laws, administrative regulations and these regulations.
Article 10 Commercial registrations include registration of limited liability merchants and unlimited liability merchants.
??? The registration of limited liability merchants shall be handled by the Registration Organization in accordance with relevant laws and administrative regulations.
The registration of unlimited liability merchants shall be handled by the agencies authorized by the Registration Organization (i.e. detached offices) according to these regulations.
Article 11 The registration items of unlimited liability merchants shall include: names, places (or addresses), persons in charge, types of enterprises, business scope, operating period, and the subscribers’ or partners’ names, addresses and identity card numbers.
Article 12 To establish unlimited liability merchants, the applicants or their consignees shall submit to the Registration Organization the following documents:
(1) Application forms for commercial registration, which are printed by the Registration Organization and signed by subscribers or partners;
(2) Documents of approval of names for merchants;
(3) Certification of domiciles or addresses;
(4) Identification papers specifying the items such as names of persons in charge, subscribers, or partners, etc;
(5) Partnership agreements of partnership organizations; and
(6) Other documents required by the Registration Organization.
Where the registrations of establishment are required to be applied to relevant department for approval according to laws and administrative regulations, the applicants or their consignees shall submit the document of ratification while applying for the registrations.
Article 13 Where an applicant submits false certification documents to the Registration Organization for establishment of unlimited merchant, he shall be ordered to make corrections and be imposed a fine of RMB 5,000 by the Registration Organization; in case the circumstances are serious, he shall be revoked of his commercial registration.
Anyone who has applied for false registration or provided false certification documents shall bear corresponding legal liability.
Article 14 The Registration Organization shall make decisions on approval or disapproval of registration within 20 days upon the date receiving the documents of application for establishment of unlimited liability merchants. Those who are qualified shall be registered and granted business licenses uniformly printed by the Registration Organization; those who are unqualified shall not be registered and shall each be given a written reply with proper reason and be informed his rights of applying administrative reconsideration or filing administrative lawsuit.
If the applying materials submitted by an applicant are adequate and consistent with legal forms, the Registration Organization shall make a decision on the spot if it’s possible.
Article 15 The date an unlimited liability merchant granted a business license shall be the date of its establishment.
?? After obtaining a business license, an unlimited liability merchant may have its seals engraved, open accountants with banks and apply for tax payment registration with such license presented.
Before obtaining a business license, any unlimited limited liability merchants shall not conduct any commercial acts in the name applied for registration.
Anyone shall be imposed a fine of not less than RMB 3,000 but not more than RMB 5,000 by the Registration Organization in case they violate the third paragraph of this article.
Article 16 When an unlimited liability merchant requires to change his registered items, he shall apply to the original Registration Organization for registering such changes, which shall register the changes according to law if the application is consistent with legal standards and requirements.
Anyone who changes a registered item arbitrarily in violation of the preceding paragraph shall be imposed administrative punishments by the Registration Organization.
?? Article 17 Any unlimited liability merchant shall apply to the Registration Organization for registration of closure of business in case it plans to close its business for six months or above.
In violation of the aforesaid paragraph of this article, anyone shall be temporary suspended of its business license or revoked of its business license in accordance with relevant laws and administrative regulations by the Registration Organization.
Article 18 To terminate business, any unlimited liability merchant shall apply to the Registration Organization for cancellation of registration with the following documents presented:
(1) Application forms for cancellation of registration, which are printed by the Registration Organization and signed by subscribers or partners;
(2) Business license;
(3) Debt and credit liquidation reports signed by subscribers or partners;
(4) Evidence of payment of duty; and
(5) Other documents as required by the Registration Organization.
??? Anyone shall not apply to write off registration of unlimited liability merchant with the purpose of evading the liability for the payment of debts he should actually bear.
Anyone who has written off its registration to conceal debts intentionally shall be revoked of registration of cancellation and be imposed a fine of not less than RMB 3,000 but not more than RMB 5,000 by the Registration Organization once checked and verified.
Article 19 Any unlimited liability merchant shall apply to the Registration Organization for annual inspection and present relevant documents as required by the organization during 1st January to 30th April every year.
Anyone in violation of the aforesaid paragraph of this article shall be imposed a fine of not less than RMB 500 but not more than RMB 3,000, and be ordered to receive annual inspection within the specified time limit by the Registration Organization; in case the offender fails to accept annual inspection within the time limit specified, it shall be revoked of its business license according to relevant laws and administrative regulations.
Article 20 Any limited liability merchant and partnership organization shall issue a public notice on the registration items approved within 30 days from the date its application for the registration of establishment, alteration and cancellation approved. The items in the public notice shall be kept in conformity with those registered.
Anyone shall be ordered to make corrections within the time limit specified by the Registration Organization in case it violates the aforesaid paragraph of this article; in case it fails to make any corrections within the time limit specified, it shall be imposed a fine of RMB 5,000.
The registration items that have not been published cannot be invoked to resist any third party.
Any published items that are not in conformity with the registered items cannot be invoked to resist any third party; in case any mistake exists in publication due to fault and causes damages to the bona fide third party, the offender shall bear corresponding civil liability for it.
Article 21 Anyone may apply to the Registration Organization for consulting or duplicating documents relevant to registration of merchants other than those involving commercial secrets of the merchant.
Article 22 The Registration Organizations shall exchange commercial registration information with competent authorities in charge of taxation.
Article 23 Any individual business may be revoked of his business license by the Registration Organization in case he seriously violates the provisions relevant to registration of unlimited liability merchants in these regulations.
?? Article 24 Any applicant who thinks his application met the requirement of establishment of merchant but has been refused to be registered by the Registration Organization, or any merchant who objects to the decision made by the Registration Organization on the administrative sanction related to commercial registration, may apply for administrative reconsideration or file an administrative lawsuit before the people’s court.
Article 25 In case those applicants who fail to meet the requirements for commercial registration have been approved to be registered by the Registration Organization, the persons in charge of such registration or persons directly liable for such registration shall be subject to administrative sanctions imposed by the Registration Organization; the offender shall be prosecuted for criminal liability in case he commits a crime.
Chapter IV Names of Merchants and Transfer of Business
Article 26 Merchants shall have their own names.
??? Names of merchants shall be composed of the following parts in such proper order: names of administrative areas, shop names, trade or business features and form of organization. Laws and administrative regulations shall be applicable in case they stipulate otherwise.
??? Article 27 Merchants may use their own names as shop names, but only limited to the merchants whose investors are natural persons.
Article 28 Shop names of merchants shall be composed of more than two Chinese characters.
Words or content of shop names that are applied to be registered shall not:
(1) damage the interests of the state, society and public;
(2) contain feudal and superstitious elements;
(3) be contrary to social ethics and aequum et bonum;
(4) contain harmful political meaning or racial or ethnic discrimination;
(5) use the same name as that of an administrative area at or above the county level;
(6) be homonymous compared with a registered shop name of any other person, which may be misunderstood as the other's shop name;
(7) be composed of Arabic numerals or letters of foreign languages; or
(8) be the ones prohibited to be used according to laws and administrative regulations.
?? Article 29 The preliminary examination system shall be applied to registration of names of merchants. In case the names applied for registration passed the examination and approved by the Registration Organization, the organization shall provide documents regarding use of such names for the applicants. The names approved shall be revoked by the Registration Organization in case they have not been used by the applicants within 6 months from the date such names have been checked and approved.
Article 30 Anyone shall not use a shop name that has been registered by any other person within the Special Zone as his own within the Special Zone, unless otherwise they have investment relationship or they have agreed in a franchise agreement.
Article 31 The shop name may be separately transferred in case it is different from trademark or composed no trademark of the transferor, but it can be transfer to only one transferee.
The shop name or name that has been transferred separately shall not be further used within the same jurisdictional areas of the Registration Organization by the transferor.
The transfer of shop names or name without registration cannot be invoked to any third party, the transferor and transferee shall bear jointly and severally liability for the payment of debts arised to the third party.
Anyone shall be ordered to make corrections within the specified time limit, or else shall be imposed a fine of RMB 5,000 in case he violates the first, second and third paragraphs of this article.
Article 32 The transferors and transferees of a business transfer shall fulfill registration of alteration and go through other procedures concerned according to law.
?? Article 33 In the case of business transfer, operating properties including names shall be transferred. The Registration Organization shall automatically revoked the names resulted in the transfer in case the transferees fails to use it.
Subsidiaries of limited liability merchants shall not be transferred other than their properties, and their names shall not be used by the transferee. Transfer of subsidiaries of unlimited liability merchants shall be prohibited.
Article 34 The transferor and transferee of a business transfer shall determine ways of assumption of debts incurred by the transferor before such business transferred under a contract.
??? Article 35 The transferee of a business transfer, who has not used the name resulted from the transfer but has promised in the public notice to assume the debts incurred by the transferor, shall pay the debts upon requesting by the debtee.
Article 36 In case the transferee in a business transfer assumes the debts incurred by the transferor, the debtee shall request the transferee to pay the debts within one year from the date such business transfer takes effect or the public notice is issued.
Chapter V Commercial Account Books
Article 37 All merchants shall establish financing and accounting systems according to laws, administrative regulations, rules of the financial competent authority of the State Council and these regulations.
Article 38 All merchants shall establish account books at the commencement of business. Account books and balance sheets shall be made to provide the information concerning the status of profit and loss in the course of business operation.
Article 39 All merchants may adopt electronic account books, but shall not destroy the data that has generated while changing the financial software under use.
Article 40 All merchants shall record the transactions in written forms according to their successively order, unless otherwise specifically provided by the laws and administrative regulations.
??? Article 41 The operating properties and their value at the commencement of business and the end of each year shall be clearly recorded in account books.
The balance sheets shall be made on the basis of the account books and shall be signed in the name of the person who makes the account books.
Article 42 The following matters that may affect any transactions and operating properties shall be recorded in account books on the basis of the original vouchers:
(1) Receipt and expenditure of funds and portfolios;
(2) Receipt and expenditure, addition and subtraction, and use of funds in finances;
(3) Generation and settlement of debts and credits;
(4) Addition and subtraction of capital and funds, receipt and expenditure of funds;
(5) Calculation of income, expenses and cost;
(6) Calculation and treatment of financial results; and
(7) Other matters required by laws that shall be handled with accounting procedures and financial accounting.
??? Article 43 All merchants shall assign special persons to properly preserve business account books. The period for preserving business account books shall be subject to the provisions of laws, administrative regulations and rules of the financial competent authority of the State Council.
Article 44 The agencies of justice, taxation, audit and registration may order contesting parties or merchants to submit all or part of their business account books under the application of subscribers or shareholders, partners or other interested persons.
Chapter VI Commercial Employees
??? Article 45 The merchants may select or appoint managers to conduct specific business according to association articles or partnership agreements.
Article 46 The merchants may appoint several managers including deputy managers to jointly exercise rights of representation.
??? The commercial acts conducted by any of the representatives with the authorization of the merchants shall be effective to the merchants.
??? Article 47 The manager shall be entitled to manage all kinds of business on behalf the merchant within the scope of authorization.
The manager shall be entitled to nominate deputy managers and chief accountants to the merchant for appointing or dismissing.
The manager may appoint or dismiss employees at or below the post of a deputy manager.
??? Article 48 The restriction on the right of representation for a manager shall not be invoked to resist the bona fide third party, unless otherwise the manager provides warranty for others or disposes real properties of the merchant without being authorized by the merchant.
??? Article 49 The manager shall fulfill the obligations of prohibition of business strife, i.e., shall not carry out any business that is the same as that of the merchant who appoints him, which are stipulated by the Company Law of the People's Republic of China.
The merchant shall be entitled to deem the transaction, which is carried out by the manager who violates the aforesaid obligations, as its own transaction and acquire his income.
The merchant shall lose such right in case it fails to exercise the right as specified in the aforesaid paragraph of this article within 3 months from the date it knows that the manager violates such obligations or within one year from the date of the transaction carried out by the manager.
Article 50 The authority of the person in charge of a subsidiary of a limited liability merchant, whose duty is similar to that of a manager, may be deemed as same as that of a manager. But such person shall not act on behalf of the merchant in respect of acts in action.
Chapter VII Agents
Article 51 The agent is an independent merchant who is authorized to act regularly or continuously on behalf of other merchants or help to bring about deals between its consigner and other merchants.
The agent, who is authorized to conduct business within the Special Zone by the consigner, is called a regional agent.
The agent, who is authorized to exclusively conduct business within the Special Zone by the consigner, is called an exclusive agent.
Article 52 To act on behalf of other merchants or helps to bring about deals between its consigner and other merchants, the agent shall conclude an agency contract with the consigner, or else the acts of the agent shall be subject to relevant provisions of the civil law.
Where the expired original agency contract between the agent and the consigner has not been renewed and has been further performed by the two parties, such contract shall be deemed as being changed into a casual one. Any of the parties may terminate the casual contract after notifying the other party for 30 days ahead of the termination, unless the parties have agreed otherwise.
The aforesaid paragraph of this article shall not be applicable in case the contract terminated due to gross negligence of any party or force majeure.
Article 53 The agent shall fulfill the obligations according to the agency contract and defend the interests of the consigner, while the consigner shall provide the necessary conditions for the agent to fulfill such obligations. To help to bring about deals between the consigner and other merchants, both the agent and the consigner shall bear the obligation to provide each other with relevant information in time.
Article 54 Unless otherwise specifically restricted by an agency contract, the agent may simultaneously accept authorizations from two or more consigners or conduct the business involving competition with the consigners.
Article 55 The agent shall bear the obligation of not taking advantage of or disclosing any commercial secrets of the consigners to any third party, even though the agency contract is terminated.
Article 56 The agent and the consigner may conclude an agreement at the time terminating the agency relations, under which restricts the agent from conducting the same business as that of the consigner within a reasonable time limit, i.e., the time limit may not exceed two years from the date terminating the agency relations. In this respect, the agent may request the consigner to pay for reasonable compensation.
The agent shall be forfeited of the right to claim for compensation stipulated in the aforesaid paragraph of this article in case the agency contract terminated due to gross negligence of the agent.
Article 57 The consigner shall pay corresponding remuneration for the agent as agreed under the agency contract. Where there is no such definite agreement in the contract on remuneration, the agent shall be entitled to acquire a reasonable sum of remuneration for the actual provision of services within the scope of authorization according to the business practice.
Article 58 Where any transaction fails due to the consigner’s fault or default while the agent has provided services for it, the agent shall be entitled to claim for reasonable remuneration from the consigner.
Article 59 Where any bargain is closed due to the service provided by a former agent within 6 months from the date rescinding the agency contract, unless otherwise the rescission due to the faults of the agent, the agent shall be entitled to claim for remuneration resulted from such transactions.
Article 60 Where the consigner closes any bargain within the agency area coverage of any regional agent, the regional agent shall be entitled to claim for the remuneration from the consigner regardless his presence or not in the transaction.
Article 61 The rescission of any agency contract shall be subject to the provisions of the contract law.
?? Article 62 Where any agent enjoys the creditor’s right for its agency or contributory in the conclusion of transaction but without being discharged of debts by the consigner within the time limit of payment, the goods or securities of the consigner may be kept by the agent unless otherwise agreed by both parties or prohibited to be kept by law.
Chapter VIII Supplementary Provisions
Article 63 The provisions concerning shop names, managers, publication of commercial registration and business account books in these regulations shall not be applicable to any individual businesses.
Article 64 The detailed implementing measures are to be formulated by the Municipal Government in accordance with these regulations.
Article 65 These regulations shall take effect as of October 1, 1999.