Laws of the People's Republic of China

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce on the Issue of Whether the Branch of A Enterprise with Foreign Investment Shall be Punished for its Business Operations without Going through the Extension Procedures after the Operational Period Expires

GongShangWaiQiZi [2002] No.10

January 18, 2002

The Administration for Industry and Commerce of Inner Mongolia Autonomous Region:

The "Request for Instruction on Whether the Branch of A Enterprise with Foreign Investment Shall Be Punished for Its Business Operations without Going through the Extension Procedures after the Operational Period Expires" by the Industrial and Commercial Bureau of Baotou City in your region (BaoGongShangFa [2001] No. 489 [2001]) has been received. Upon study of the issue, we hereby give the reply as follows:

I.

Operational period is one of the registration items stated in the new-version business license of enterprises with foreign investment. An enterprise with foreign investment shall go through the modification or cancellation registration in accordance with the provisions once its operational period has expired.

II.

On the verification of the operational period of the branch of an enterprise with foreign investment, the validity period of the administrative permit on the matters for approval, which is involved in the scope of business, shall be considered, unless otherwise provided for by laws, regulations, rules or the regulatory documents by the State Administration for Industry and Commerce. The operational period of the branch shall be determined within that of the enterprise with foreign investment upon the period applied for by the enterprise.

III.

Any branch of a company with foreign investment that continues business operations without going through the modification or cancellation registration after the expiry of its operational period verified in compliance with the above principle, shall be punished in accordance with Article 63 of the "Regulations on the Administration of Registration of Companies".

For the violators whose operational period is directly verified by the registration organ to be one year due to administrative habits, they shall generally be imposed upon a criticism, warning and be ordered to mend up in consideration of the specific situation and the extent of the actual harm to the society. If the case is serious, they shall be punished in accordance with the preceding paragraph.