Article 199
In the case of company registration, where an applicant obtains company registration in violation hereof by making false statement of registered capital, submitting false certificates or by concealing material facts through other fraudulent means, the company shall be ordered to make rectification, and in the event false statements of registered capital were made, the company shall be fined not less than five percent (5%) but not more than fifteen percent (15%) of the amount of registered capital falsely stated; the company submitting false certificates or concealing material facts shall be fined not less than RMB 50,000 but not more than RMB 500,000; where the circumstances are serious, the company registration shall be revoked or the business license of the company shall be cancelled.
Article 200
Where the sponsors or shareholders falsify capital contribution by failing to pay money, to deliver or delay in the delivery of currency or non-currency property, they shall be ordered by the company registration authority to make rectification, and such persons shall be fined not less than five percent (5%) but not more than fifteen percent (15%) of the amount of capital contribution falsified.
Article 201
Where the sponsors or shareholders of a company withdraw their capital contribution after the establishment of the company, they shall be ordered by the company registration authority to make rectification, and such persons shall be fined not less than five percent (5%) but not more than fifteen percent (15%) of the amount of capital contribution withdrawn.
Article 202
Where a company, in violation hereof, establishes another set of accounting books besides those prescribed by law, it shall be ordered by the company registration authority to make rectification, and the company shall be fined not less than RMB 50, 000 but not more than RMB 500, 000.
Article 203
Where a company provides to its shareholders and the public financial and accounting reports which are false or which conceal material facts, a fine of not less than RMB 30,000 but not more than RMB 300,000 shall be imposed by relevant authority on the supervisor directly in charge and the other person(s) directly responsible.
Article 204
Where a company fails to make allocation to the statutory reserve fund in accordance herewith, such company shall be ordered by the finance authority of the people’s government at the level of county or higher to make full allocation to the required funds, and a fine of not more than RMB 200,000 may be levied on the company.
Article 205
Where a company fails to notify creditors through notice or public announcement in accordance herewith while carrying out merger, division, reduction of registered capital, or liquidation, it shall be ordered by the company registration authority to make rectification, and the company shall be fined not less than RMB 10,000 but not more than RMB 100,000.
Where in the course of liquidation, the company conceals its assets, makes false statements in its balance sheet or schedule of assets, or distributes company assets prior to full repayment of company debts, it shall be ordered to make rectification, and the company shall be fined not less than five percent (5%) but not more than ten percent (10%) of the value of the concealed assets, or the value of the assets distributed prior to full repayment of company debts. A fine of not less than RMB 10,000 but not more than RMB 100,000 shall be imposed on the supervisor directly in charge and the other person(s) directly responsible. Where such action constitutes a crime, criminal liability shall be imposed in accordance with the law.
Article 206
Where the company engages in any business activities unrelated to the liquidation, it shall be warned by the company registration authority and its income derived therefrom shall be confiscated.
Article 207
Where the liquidation committee fails to submit the liquidating report to the company registration authority in accordance herewith, or conceals any material fact or makes any material omission in the liquidating report submitted, it shall be ordered by the company registration authority to make rectification.
Where a member of the liquidation committee abuses his authority to engage in fraudulent activity for private gain, to obtain illegal income or convert company assets, such member shall be ordered to return the company assets, and the illegal income shall be confiscated, and such member may be fined not less than two times but not more than five times the illegal income.
Article 208
Where an institution conducting assets appraisal, capital verification, or testing and verification provides a false certificate, the illegal income so derived shall be confiscated, and a fine of not less than two times but not more than five times the illegal income shall be imposed, and the relevant authority in charge may order such institution to cease operation, and revoke the qualification certificates of the persons directly responsible. Where such action constitutes a crime, criminal liability shall be imposed in accordance with the law.
Where an institution conducting assets appraisal, capital verification or testing and verification provides a report with material omission due to its negligence, it shall be ordered to make rectification, and where the circumstance is relatively serious, a fine of not less than two times but not more than five times the income so derived shall be imposed, and the relevant authority in charge may order such institution to cease operation, and revoke the qualification certificates of the persons directly responsible.
Where the appraisal report, capital verification report or verification issued by an institution conducting assets appraisal, capital verification or testing and verification does not comply with the fact which has caused losses to the company’s creditors, the institution conducting assets appraisal, capital verification or testing and verification shall, unless they can prove they have no fault, make compensations within the range of amount in discord with the fact.
Article 209
Where the company registration authority grants registration to an application which fails to meet the requirements prescribed herein or, refuses to grant registration to an application which meets the requirements prescribed herein, administrative penalty shall be imposed on the supervisor directly in charge and the other person(s) directly responsible in accordance with the law.
Article 210
Where the department in charge of the company registration authority compels it to grant registration to an application which fails to meet the requirements prescribed herein, or engages in cover up for an illegal registration, administrative penalty shall be imposed on the supervisor directly in charge and the other person(s) directly responsible in accordance with the law.
Article 211
Where an entity passes itself off as a limited liability company or joint stock limited company while not registered as such in accordance with the law, or an entity passes itself off as a branch company of a limited liability company or joint stock limited company while not registered as such in accordance with the law, it shall be ordered by the company registration authority to make rectification or such entity shall be closed down, and a fine of not more than RMB 100,000 may be imposed.
Article 212
Where a company fails to commence operation for more than 6 months without proper cause, or suspends operation on its own without proper cause for more than 6 consecutive months after commencement of operation, the company registration authority shall revoke its company business license.
Where the company fails to carry out amendment registration in accordance herewith when a registered item of the company has changed, it shall be ordered to register within a prescribed time limit, and where the company has not carried out registration after expiration of the time limit, a fine of not less than RMB 10,000 but not more than RMB 100,000 shall be imposed.
Article 213
Where, in violation hereof, a foreign company establishes a branch within China without approval, it shall be ordered to make rectification, or such branch shall be ordered to terminate, and a fine of not less than RMB 50,000 but not more than RMB 200,000 may be imposed.
Article 214
Where a company conducts illegal activities jeopardizing the national security and social public interests, the business license of such company shall be revoked.
Article 215
Where a company violates of this Law, and is therefore liable for civil damages as well as for an administrative fine or criminal fine, and its assets are not sufficient to cover both, its assets shall first be used to cover the civil liability for damages.
Article 216 Where any violation of this Law constitutes a crime, criminal liability shall be imposed in accordance with the law.
