PROVISIONAL REGULATIONS FOR BUSINESS REGISTRATION IN SHANGHAI

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600330464-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: August 26, 2011
• Sequence Number: 464
• Publication Date: August 7, 1950
• Content Type: REPORT

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ENTIAL CQNFIDENTIAL
1.1ra
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CLASSIFICATION CONFID
CENTRAL INTELLIGENCE AGENCY
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
REPORT
CD NO.
COUNTRY
SUBJECT
China
Economic - Commerce, business registration
DATE OF
INFORMATION
DATE DIST. 1
1950
Aug 1950
HOW
PUBLISHED
WHERE
Daily newspaper
NO. OF PAGES
5
PUBLISHED
Shanghai
DATE
PUBLISHED
SUPPLEMENT TO
LANGUAGE
REPORT NO.
TNIIN ATNl D[ANIIIIO O/I IOPIONAYl OACT l0
W
A
1
THIS DOC
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or THK tl. 1. C.. 11 ANO IY. AD ANlNO[D. 171 TIAN0NIOIlON ON TNl.IY1LAT10NfN0
NI11 ID 1Y TL 1. 1 11, 01140 10* OF TNTORN II ,AOHINITID. 11 ?
Rsin-wen Jih-pao.
THIS IS UNEVALUATED INFORMATION
PROVISIONAL REGULATIONS FOR BUSINESS REGISTRATION IN SHANGHAI
To clarify the status of business organizations
democratic economy, to ffur urtherlthe
interests of legitimate business, and to expand
ing regulations are issued:
1. All firms, whether owned publicly, privately or jointly located andthe
operated in Shanghai shall comply with these regulations and shall apply
government of Sha^ghai for permission to register. No firm shall operate with-
out the certificate of registration.
2. Enterprises shall be classified as follows for registration purposes:
a. Those employing hired labor and power machinery for the industrial
production shall be classified as an industry and shall apply
registration certificate.
b. Those employing hand labor only shall apply for registration as
a handicraft industry.
c. Those engaging in the purchase and sale of mechandise or engaging
in other forms of trade shall apply for registration as a mercantile firm.
d. Those engaging in both manufacturing and merchandising shall apply
for registration as an industrial and mercantile business. All enterprises re-
quiring special permits to conduct such enterprise shall secure such permits
before applying for registration.
3. Permits shall be applied for 20 days before business is to be opened.
All firms which have been registered with the IM authorities or which have
begun business before the effective date of these regulations shall be regarded
as new enterprises.
4. The following shall represent an enterprise in applying for registration:
a. For publLc and ;Joint public and private enterprises -- responsible
management officer
b. For individually owned enterprises -- owner
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c, For partnerships -- managing partner
d. For stock companies -- board of directors or managing stockholder
In case the applicant for registration employs an agent, the agent
shall be furnished with satisfactory documentary evidence of his competency.
Applications for registration shall contain the following information:
a. Name of firm
b. Type of business
c. Scope of business
d. Nature of business (public, private, or joint)
e. Type of organization (sole proprietorship, partnership, corporation)'
f. Address
g. Divisions (or name and location of main factory or store)
h. Date of opening
i. Present or planned membership in business associations (state type)
J. Type of capital
k. Area of grounds, buildings, and equipment
1. Present or planned personnel (number)
m. Present or planned affiliation with unions (workers)
n. Name, native place, present address, of person providing capital
and the amount of such capital
o. Name, occupation, age, birthplace, and experience (number of years)
of the manager
Guarantor (name of one factory or shop)
Except for publicity operated enterprises, enterprises in operation
before the promulgation of these regulations may be recommended by their business
guild.
q. Name of the aiplicant
The person furnishing the capital shall use his real nmr?.e; no
aliases or family or clan names shall be used. In case the capital is furnished
by a society, the society must be recognized by the government.
6. The following documents shall accompany all applications:
a. Investigation chart /-si27
b. Articles of partnership or corporation prospectus
c. Business plans
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This may be a bank statement, report of investigator, or a written
statement by the person providing the capital; but those whose central factory
or place of business and all branches are in Shanghai, and there is no division
of capital, need not report for, the branches. Those making changes in their
capital under the provisions of Article 10 of these regulations should present
evidence of capital responsib.litices before and after reorganization, statement
of financial assets, articles of reorganization, and evidence of agreement of
all parties concerned.
e. Those requiring authorization from their main office shall present
evidence of such authorization. Those having evidence of registration or oper-
ation permits from the KMT authorities shall present it.
7. Firms located outside of Shanghai but desiring to set up branches in
Shanghai shall comply with these regulations in seeking registration and present
authorization for such action from their head office.
Shanghai firms setting up branches in other places shall submit evidence
of their registration. in Shanghai at the place where their branch is to be es-
tablished.
Firms with head office and all branches in Shanghai shall present their ap-
plication for all of them at the same time. When the registration has been
granted, certificates will be issued to each branch separately.
The names of branch firms shall indicate their relationship as branches of
the main office. When a. branch is opened and there is already a registered
enterprise of the same or similar name, the branch shall carry in its name an
indication of the location of the parent company.
8. Business firms registering in Shanghai shall not use the same or simi-
lar name of other firms in the same line of business, otherwise the other firm
may consider, it an infringement upon its interests and seek an injunction against
the use of such name. A business which can present evidence that it was using
its name before another firm registered for use of that name is not bound by
this regulation. In case two firms with the same name apply for registeration,
the one applying first shall be recognized. In case of simultaneous application,
the Bureau of Industry and Commerce shall endeavor to settle the matter by icu-
tual negotiation. In case no agreement can be reached, the Bureau shall deciie
which firm shall use the name.
9. Foreign firms applying for registration under these regulations shall
do so through the Foreign Affairs Office. Businesseb which require official
permission for their operation shall also negotiate with the necessary author-
ities through the above office.
At least one person who has provided the capital in firms in the above
category shall maintain a residence in Shanghai.
Such firms opening branches in Shanghai shall engage a resident of Shanghai
as manager.
10. Firms established before 27 May 1949 shall effect a re-evaluation of
their capital assets or add fresh capital to them. The standard for such re-
evaluation should be the value on 31 August 1949. Liabilities should be reck-
oned according to contractual obligations as of 31 August 1949. If the 31
August balance shoved a surplus it shall be, at the close of the fiscal year,
reckoned with the gains or losses of the period 1 September to 31 December
1949, according to custom or established policy. However any capital assets
that have appreciated in value may not be regarded as surplus to be converted
into cash or goods.
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Revaluation of capital aseets and recapitalization shall be done according
to law. In partnerships all partners shall be in agreement and in corporations
the actions shall be approved by all the stockholders.
11. A.11 firms existing before the promulgation of these regulations, which
have been financed by any bureaucrat or war criminal shall report it and not
seek to hide the fact.
12. Any firm which does not open for business within two months of receiv-
ing the registration certificate shall apply for a revocation of the registration
and the registration certificate, unless it has previously applied for an ex-
tension of time.
13. Firms which open for bus.ineac prior to the receipt of a registration
certificate shall be closed. or otherwise dealt with according to the gravity of
their offense. Firms, operating before the promulgation of these regulations,
which fail to apply for the registration within the prescribed time shall be
considered as operating without a registration. The period for registration
shall be announced. separately by the Bureau of Industry of Commerce.
14. No firm shall engage in auxiliary business connected with its primary
businese beyond whichit tn.s beam registered. In case a'r.egistration is made under
false pretenses, or a firAA operates businese outside the purview of its regis-
tration or, a firm lend. its registration certificate to some other firm or
altering it, it shall he dealt with according to the gravity of the offense in
the circumstances
15. No firm shall take any opportunistic or other actions which will be
prejudicial'to the market or the economy. Any firm found guilty of such acts
shall be strictly dealt with by law and its registration sl.all be revoked.
16. Prior approval shall be obtained when any firm desires to change its
registered status by merger or sale. Within 1~ days after acquiring its new
status it shall apply for a new registration, supplying the necessary documents
and turning in its old registration certificate. Any change in the area used
for the business, its buildings, equipment, number., of employees, residence of
the registrant, the one who supplied. the capital, or the one in charge of the
business shall not require a new application for registration, but the change
shall be reported for the record. Any firm making a retrenchment requiring
cessation of work, reduction of work, or reduction in force shall notify the
Bureau for the record.
17. If, after a firm has been registered, there appears an error or an
anission in the information, the firm shall request a correction.
18. Any firm desiring to cease operations shall present the reasons there-
for with supporting documents and ask for consideration. Not until approval has
been given shall the firm ask for a cancellation of the registration. No firm
may discontinue business on its own initiative.
19. If a firm desires to take an inventory, it shall first present its rea-
sons with the supporting documents in a petition to the Bureau of Industry and
Commerce for consideration. After receiving permission it may take the inventory.
Within three days after finishing the inventory, the firm shall report to the
Bureau on the results of the inventory. In case the result of the inventory in-
dicates a need to discontinue business or to secure a change in the registration,
the firm shall petition accordingly.
20. In case a business is closed by executive or court order, the executive
agency or court giving such an order shall notify the Bureau. The Bureau shall
cancel the registration and nullify the certificate of registration.
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21, In case of loss or theft of the registration certificate, the regist-
rant shall advertise the facts in a. newspaper for three days. After a week he
may present copies of the newspaper with his application for the issue of a new
certificate. Any one objecting to the issuance of a new certificate may present
his case to the Bureau with supporting evidence for action within one week after
the appearance of the advertisement.
22. The responsibility of a guarantor under Item 7 and the method of with-
drawing a guarantee shall be ~. follows
The guarantor, certifies that the firm which he has guaranteed will operate
a l.egitmate business in a 19.w abiding manner., and. that the information in the
petition for registration is true and correct.
In case the guarantor wishes to withdraw his commitment he muss not do so
until the one guaranteed has been able to make other arrangements.
2i. The registration fees shall be as follows; sole proprietor 50,000 yuan
JMP and partnership or corporation 150,000 yuan JMP. This fee shall be payable
with the application for registration. The fee for renewal of a lost certificate
of registration shall be 50,000 yuan JMP. The fee may be subject to change.
24. Street tal1r-., itinerant merchants and. handicraft merchants with no
fixed place of work s a.l.l not be. included in these regulations.
25. Until the industrial and commercial law becomes effective, original
registrations and organization plans shall be uaei temporarily, but those who
resist these regulations shall not be given this privilege.
26. These regulations shall become effective from the date of promulgation
by the city government of Shanghai.
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