Breaking News! Market Regulation Administration Order No. 88 Announced (Full Text and Illustrated Summary)

　　To effectively prevent and investigate illegal acts of counterfeit enterprise registration, solve the problem of enterprises being registered under false names, strengthen the punishment of those responsible for submitting false materials, accelerate the construction of a market order based on integrity and law-abiding behavior, continuously optimize the business environment, and create a legal environment that promotes high-quality economic development, the State Administration for Market Regulation recently issued the "Regulations on Preventing and Investigating Illegal Acts of Counterfeit Enterprise Registration" (hereinafter referred to as the "Regulations"), which will be officially implemented from March 15, 2024.

　　The "Regulations" point out, First, insist on source prevention . To better prevent impersonation of others during the registration process, it is clarified that both natural persons and enterprises as investors need to cooperate with the registration authority for identity verification; to strengthen the management of state-owned asset investment behavior, it is clarified that when handling the registration of state-owned enterprises, the registration authority shall verify and compare the registration information of state-owned enterprises with property registration information. If the information verification and comparison are inconsistent or do not meet relevant registration application requirements, registration shall not be granted. Second, insist on full-process control . Resolutely implement the decisions and deployments of the Party Central Committee and the State Council, legally and equally protect the legitimate rights and interests of various business entities. In view of the strong concealment, rapid spread, and significant social impact of illegal acts impersonating state-owned enterprises, central enterprises, well-known private enterprises, and foreign-invested enterprises in practice, institutional measures such as strengthening identity verification, enhancing departmental cooperation, implementing information comparison and verification, improving cancellation procedures, refusing registration for enterprises under investigation, and severely punishing illegal acts of intermediary agencies are proposed. Third, solve the difficulties in investigation and punishment . In response to the difficulties and high costs of identifying counterfeit enterprise registration acts in practice, it is clarified that the registration authority may, in combination with appraisal opinions issued by legally qualified institutions or written opinions issued by relevant departments, make administrative penalties, cancel enterprise registration, and other decisions according to law. Fourth, strictly regulate enterprise registration agency behavior . It is clearly required that intermediary agencies must indicate their agency identity when handling registration business; must not use improper means to provide false information or materials; must not maliciously apply for a large number of enterprise registrations for profit transfer purposes, damaging social public interests or disrupting social public order. For intermediary agencies repeatedly engaging in illegal agency behavior or with other serious circumstances, heavier penalties shall be imposed according to law. Fifth, strengthen accountability . For those who submit false materials or use other fraudulent means to conceal important facts to obtain enterprise registration, the registration authority shall order correction according to law, confiscate illegal gains, and impose fines. The directly responsible persons shall not apply for enterprise registration again within three years and shall be lawfully included in the serious illegal and untrustworthy list of market supervision.

　　After the implementation of the "Regulations", market supervision departments will continue to regulate enterprise registration management order, do a good job in preventing and investigating illegal acts of counterfeit enterprise registration, effectively maintain transaction order and safety, and legally and equally protect the legitimate rights and interests of various business entities.

Regulations on Preventing and Investigating Illegal Acts of Counterfeit Enterprise Registration

(Issued by the State Administration for Market Regulation Order No. 88 on January 10, 2024

Effective from March 15, 2024)

　 　Article 1 In order to regulate the order of enterprise registration management, effectively prevent and investigate illegal acts of counterfeit enterprise registration, accelerate the construction of a market order based on integrity and law-abiding behavior, effectively maintain transaction safety, and continuously optimize the business environment, these Regulations are formulated in accordance with the "Regulations on the Administration of Market Entity Registration of the People's Republic of China" and other laws and regulations.

　　 Article 2 These Regulations apply to the prevention and investigation of illegal acts of counterfeit enterprise registration.

　　The illegal acts of counterfeit enterprise registration referred to in these Regulations mean submitting false materials or using other fraudulent means to conceal important facts, impersonating other enterprises, and registering as shareholders of limited liability companies, promoters of joint stock companies, investors of non-corporate enterprises, partners of partnership enterprises, and other illegal acts.

　　The specific circumstances of submitting false materials or using other fraudulent means to conceal important facts referred to in the preceding paragraph include:

　　(1) Forging or altering other enterprises' seals, business licenses, approval documents, authorization documents, etc.;

　　(2) Forging identity verification information;

　　(3) Submitting false commitments;

　　(4) Other circumstances of concealing important facts.

　　 Article 3 The State Administration for Market Regulation is responsible for guiding and supervising the prevention and investigation of illegal acts of counterfeit enterprise registration nationwide.

　　The departments responsible for enterprise registration work of local people's governments at or above the county level (hereinafter referred to as registration authorities) are responsible for the prevention and investigation of illegal acts of counterfeit enterprise registration within their jurisdictions. If the local people's governments at or above the county level have other provisions on the investigation and handling responsibilities of illegal acts of counterfeit enterprise registration, those provisions shall prevail.

　　 Article 4 Market supervision departments shall work with relevant departments to establish a communication and coordination mechanism for preventing and investigating illegal acts of counterfeit enterprise registration, strengthen information sharing and verification, enhance source prevention, promote full-process control, and promptly investigate and handle illegal acts according to law.

　　 Article 5 Enterprise registration shall implement a real-name system. Applicants shall cooperate with the registration authority to verify identity information.

　　If the party is a natural person, they shall cooperate with the registration authority to conduct real-name verification through a real-name authentication system using facial recognition and other methods.

　　If the party is an enterprise, they shall cooperate with the registration authority to verify identity by verifying the electronic business license; if an electronic business license is not used, the natural persons such as the legal representative, person in charge, or executive partner shall undergo real-name verification.

　　 Article 6 Applicants shall be responsible for the authenticity, legality, and validity of the submitted materials.

　　Natural persons or intermediary agencies entrusted to handle registration matters shall comply with laws and regulations, indicate their agency identity, must not forge, alter, or use forged or altered legal documents, seals, or signatures, must not use fraudulent or deceptive means, must not instigate, fabricate, or assist others in fabricating or providing false information or materials; must not maliciously apply for a large number of enterprise registrations for profit transfer purposes, damaging social public interests or disrupting social public order.

　 　Article 7 Market supervision departments shall establish a mechanism for sharing registration information of state-owned enterprises and property registration information with departments such as state-owned asset supervision and administration.

　　When handling the registration of state-owned enterprises, the registration authority shall, in accordance with relevant regulations, verify and compare the registration information of state-owned enterprises with property rights registration information through informatization and other means. If the information verification and comparison are inconsistent and do not comply with relevant registration application regulations, the registration authority shall not register and shall issue a notice of refusal to register. If the relevant departments of the State Council have other provisions on property rights registration for enterprises within their jurisdiction, those provisions shall apply.

　　Article 8 The State Administration for Market Regulation shall establish a preventive protection mechanism for enterprise names, improve the management system for prohibited and restricted use of enterprise names, and strengthen the protection of the legitimate rights and interests of enterprise names.

　 　Article 9 If an enterprise discovers that it has been falsely registered, it may apply to the registration authority where the false registration is located for an investigation and provide relevant evidence materials. The applicant is responsible for the authenticity of the application matters and evidence materials.

　　When performing its duties, if the registration authority discovers illegal acts of false enterprise registration or receives clues about such illegal acts transferred by relevant departments, it shall investigate according to law.

　　 Article 10 After receiving an investigation application, the registration authority shall decide whether to accept it within 3 working days and notify the applicant in writing.

　　After accepting the application, the registration authority shall complete the investigation within 3 months and promptly decide whether to revoke or not revoke the registration. In complex cases, with the approval of the head of the registration authority, the period may be extended by 3 months.

　　During the investigation period, if the relevant enterprises and personnel cannot be contacted or refuse to cooperate, the registration authority may publicly disclose information such as the registration time and registration matters of the suspected falsely registered enterprise through the National Enterprise Credit Information Publicity System, with a publicity period of 45 days.

　　If the relevant enterprises and their interested parties do not raise objections during the publicity period, the registration authority may revoke their enterprise registration according to law.

　 　Article 11 The registration authority, when investigating illegal acts of false enterprise registration according to law, may handle the case in conjunction with appraisal opinions issued by legally qualified institutions or written opinions issued by relevant departments. If laws or administrative regulations have other provisions, those shall apply.

　　 Article 12 The registration authority shall revoke the registration under any of the following circumstances:

　　(1) The facts of illegal acts of false enterprise registration are clear;

　　(2) The people's court issues a notice of assistance in enforcement requiring cooperation to revoke the registration;

　　(3) Other circumstances where registration shall be revoked according to law.

　　If it falls under the first item of the preceding paragraph, but there is evidence proving that the falsely registered enterprise was aware of the false registration and explicitly agreed or did not raise objections, and on this basis engaged in related management, business activities, or obtained benefits, the registration authority may decide not to revoke the registration.

　　 Article 13 If an enterprise whose registration has been revoked has invested in or established other enterprises, the person in charge of that enterprise shall properly handle the matter according to law and eliminate adverse effects.

　 　Article 14 After making a decision to revoke registration, the registration authority shall publicly disclose it to society through the National Enterprise Credit Information Publicity System within 20 working days.

　　For revocation of establishment registration, mark "Establishment Registration Revoked," and disclose the date and reason for revocation, the authority making the revocation decision, and other information.

　　For revocation of change registration, restore the information publicly disclosed before the false registration, and simultaneously disclose information related to the revocation of the false registration.

　　For revocation of cancellation registration, restore the information publicly disclosed before cancellation, and mark "Cancellation Registration Revoked, Subject Qualification Restored."

　　 Article 15 If a falsely registered enterprise has its establishment or change registration revoked, it shall return its business license. If it refuses or is unable to return it, the registration authority shall announce the invalidation of the business license through the National Enterprise Credit Information Publicity System. If the falsely registered enterprise has obtained an electronic business license, the electronic business license shall be invalidated simultaneously with the paper business license.

　　 Article 16 If relevant units or individuals have been filed for investigation or transferred to judicial authorities for suspected false enterprise registration, and the relevant registration application of the suspected false enterprise is found to violate laws and regulations upon review, or may endanger national security or social public interests, the registration authority shall not register and shall issue a notice of refusal to register.

　　 Article 17 If the registration authority or its superior authority determines that a decision to revoke registration is incorrect, it may revoke that decision, restore the original registration status, and publicly disclose it through the National Enterprise Credit Information Publicity System.

　 　Article 18 If false materials are submitted or other fraudulent means are used to conceal important facts to obtain enterprise registration, the registration authority shall order correction according to law, confiscate illegal gains, and impose a fine of not less than 50,000 yuan but not more than 200,000 yuan; if the circumstances are serious, impose a fine of not less than 200,000 yuan but not more than 1,000,000 yuan, revoke the business license, and deal with the directly responsible persons according to law.

　　If it is known or should be known that the applicant submitted false materials or used other fraudulent means to conceal important facts for enterprise registration, but still accepts the commission to handle it on their behalf or assists in false registration, the registration authority shall confiscate illegal gains and impose a fine of up to 100,000 yuan. If intermediary agencies violate the provisions of the second paragraph of Article 6 of these regulations, repeatedly engage in the above illegal acts, or the nature is serious causing severe consequences, they shall be punished more severely according to law.

　　Article 19 The directly responsible persons for illegal acts of false enterprise registration shall not apply for enterprise registration again within 3 years from the date the registration is revoked; those who have received relatively severe administrative penalties from the market supervision and administration department shall be lawfully included in the list of serious illegal and untrustworthy market entities. The registration authority shall publicly disclose this through the National Enterprise Credit Information Publicity System.

　　The directly responsible persons referred to in these regulations include those who play a decisive role in the implementation of illegal acts of false enterprise registration, bear responsibilities such as organization, decision-making, and command, as well as those who specifically execute or actively participate.

　　Article 20 When investigating illegal acts related to false enterprise registration, if the registration authority discovers suspected crimes such as forgery of seals or fraud, it shall promptly transfer the case to the public security authorities for handling.

　　If clues of suspected duty-related violations or crimes by public officials are found during work, they shall be promptly transferred to the discipline inspection and supervision authorities.

　 　Article 21 If a falsely registered enterprise or interested party is dissatisfied with the relevant handling decision made by the registration authority, they may apply for administrative reconsideration or initiate administrative litigation according to law.

　　Article 22 For matters not stipulated in these regulations regarding the prevention and investigation of illegal acts of false enterprise registration, the "Regulations on the Administration of Market Entity Registration of the People's Republic of China" and its implementation rules and other provisions shall apply.

　 　Article 23 Natural persons, social organizations, public institutions, and others acting as shareholders or contributors in enterprise registration shall follow these provisions.

　　Prevention and investigation of other false registration and filing violations shall be conducted in accordance with these provisions.

　　Article 24 These provisions shall come into effect on March 15, 2024.