Management personnel directly responsible for making false statements at the time of application of an enterprise are subject to criminal fines and imprisonment. Activities subject to criminal penalties include false declaration of registered capital; false information concerning the value of assets contributed to a joint venture; false statements concerning creditworthiness of the foreign party; and other false information designed to mislead the registration authorities. A person who provides false documentation or information for the purpose of obtaining registration may be sentenced to up to three years' imprisonment and penalized in the sum of up to 10 percent of the falsely declared registered capital. A department, division, or work unit of a Chinese enterprise may be fined up to 10 percent of the falsely declared registered capital and the unit management and persons directly responsible for the false statements may be subject to individual penalties and imprisonment.
