China: A Watershed In The Availability Of Corporate Information In China?

In March 2014, the State Administration for Industry and Commerce ("SAIC") launched the National Company Credit Information System (the "NCCIS"). This online database, once established, will bring China in line with numerous other jurisdictions in holding a wide range of publically available information on corporate enterprises registered in China.

Given that, up to this point, proof of intention to initiate legal proceedings was required to be submitted to the local Administration, this marks an important step in accountability and transparency. The most prominent example of this is that all penalties imposed on companies will have to be disclosed and listed whereas such information was routinely not available prior to this.

With such a broad vision, it is clear that the most important question will be the obligations imposed on all disclosing bodies. To this end the NCCIS is governed by the Interim Regulation on Enterprise Information Disclosure (the "Regulations"), issued on 7 August 2014 and which came into force on 1 October 2014.

The Regulations establish a range of duties under which disclosures by enterprises, local Administrations for Industry and Commerce ("AICs") and other government bodies will result in a continuously updated database. We consider the duties upon each body below:


As may be expected, the greatest obligations fall upon enterprises themselves. The most prominent of these, under Article 8, is the requirement for annual returns to be filed between 1 January and 30 June each year in relation to the previous year's activities.

The annual report must include general information such as a postal address, email, website address and telephone number. However, Article 9 also requires disclosure of the amounts and forms of capital contributions by shareholders of limited liability companies or sponsors of joint stock limited companies, notification of any equity transfer by shareholders and information on any investment in, or the formation of, other enterprises. Any information that includes state secrets, details on state security, or information that would be in the public interest must be reported to, and approved by, the relevant state security department, or other department dealing with confidential information, before being disclosed.

An enterprise may exercise its discretion as to whether to also disclose further information such as its workforce, total liabilities, profits and tax payments. Should this information not be disclosed, citizens and organisations may still apply to review such information subject to the consent from the enterprise.

However, Article 18 requires government agencies to take into account the amount of information submitted through the enterprise system when supervising tender processes, government procurement or a range of other functions. Therefore, it may be in an enterprise's interests to disclose this information.

In addition to the annual report, enterprises are under an ongoing obligation to disclose further information within 20 working days of such information being created. This duty extends to capital or equity transfers by shareholders and sponsors, as above, and also goes further, to include the provision of administrative licenses and penalties, and registration of intellectual property rights.

AICs will perform random inspections to ensure compliance, the results of which will be made publicly available and, under Article 13, 'tip offs' to AICs are condoned. Following a tip-off an investigation will take place within 20 working days and the veracity of the information established. Enterprises are obliged to cooperate with investigations, and serious instances of non-compliance will be made public.

The threat of public sanction is extended under Article 17 to the provision of false information or a breach of a disclosure requirement, including failing to comply with the relevant deadlines. Following such circumstances the defaulting enterprise will be included on a publically available list of enterprises with 'abnormal operations', and where losses have been suffered in a serious incident a compensation order could be made. An enterprise can apply to be removed from this list if the disclosure obligation is subsequently completed.

Should an enterprise included on this list fail to disclose information within the following three years, they will be named and shamed on a further publically available list of enterprises guilty of serious violations. Upon listing of a serious violation, the legal representative of the enterprise or 'person in charge' of that company will not be permitted to hold such a role for any other enterprise for three years. Where an enterprise on the list subsequently and consistently complies with its disclosure obligations during a period of five years, it will be removed from the list of serious violations by the relevant AIC.

The effect of such consequences is made clear in Article 18, as stated above. Government bodies are required to take into account compliance with the disclosure obligations and the failure to do so could exclude the enterprise from government tenders and procurement contracts and from benefitting from the distribution of state land as well as other benefits.


Whilst state, provincial and regional government are intended to lead implementation of the NCCIS under Article 4 of the Regulations, the AICs appear to carry the main weight of governmental disclosure obligations.

Under Article 6 AICs are required to disclose registration information, including mortgage and equity pledge details as well as information on any administrative punishments levied. As with enterprises, such information must be made available on the NCCIS within 20 working days of being generated and the AICs will be held responsible for authenticity, accuracy and compliance with the relevant time limits.

In an important concession to enterprises, where an AIC is required disclose either information containing an enterprise's trade secrets or the private information of individuals, then such the disclosure of such information must be approved by a superior competent department.

Should AICs fail to adhere to the Regulations, corrective measures can be imposed from above and, if deemed a serious breach, then the responsible individuals will be made subject to administrative sanctions or criminal liability.

Other government agencies

Finally, there is an ongoing obligation on those administrative bodies that hold relevant information regarding enterprises, such as details of licensing arrangements and which have imposed administrative penalties. The information held by such bodies is expected to be less, under Article 7, but can be supplemented where possible by relevant but more general disclosures, including information that may also be held by the AICs.

As above, if any disclosure is to contain trade secrets or private information about individuals then the disclosure must be approved by a superior competent government body.


The Regulations, and the NCCIS itself, have the potential to stand as a clear turning point in the transparency of corporate administration. Not only will information be increasingly available on companies registered across China, but regulation of companies will also be visible.

Such a wide-ranging series of obligations will take time to implement fully, and the vast majority of information is still to be uploaded since the Regulations came into effect on 1 October, but it is foreseeable that the transparency of administrative process with regards to licensing, and punitive measures, will create a more secure and predictable corporate environment, where regional idiosyncrasies are increasingly ironed out.

Such aims would appear to tie in with the stated focus on the Rule of Law during this October's Central Committee Plenary Session, and the wider anti-corruption focus adopted by the government.

Furthermore, these goals have been given an initial boost by the Shanghai High Court, which announced in July 2014, that information disclosed and held by the NCCIS could be admitted as evidence both as to an enterprise's identity and more generally.

However, it is also clear that both government bodies and companies face potentially onerous obligations, with significant sanctions where this duty is not met and no defined distinction between what constitutes a normal breach, and what should be considered 'serious'. With those running state procurement and tender processes required to consider a company's disclosure history, public listing and potentially compensation orders threatened for any breach, and a prohibition against holding office possible against management, companies will be wise to ensure that they are prepared for the first annual disclosure deadline, on 30 June 2015, and are aware of information which will fall within the ongoing duty of disclosure to avoid incurring any sanctions.

With the NCCIS now launched, it will prove an interesting nine months while all relevant bodies begin to submit information, and we do not expect a lot of the information to be provided far in advance of the relevant deadlines. More interesting, however, will be the extent to which the government authorities are willing to implement and act on the Regulations, and consequently the extent to which this move will be seen in future as a contribution to a more transparent, accountable and stable corporate environment in China.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions