Decision on Punishment over Crimes against the Company Law

Decision on Punishment over Crimes against the Company Law (Adopted at the 12th Session of The standing Committee of The 8thNational People's Congress and promulgated on February 28, 1995) Whole document Decision on Punishment over Crimes against the Company Law (Adopted at the 12th Session of The standing Committee of The 8th National People's Congress and promulgated on February 28, 1995) With a view to maintaining the social and economic order, protecting the legal rights and interests of a company, punishing the crimes against the company Law, the following provisions are formulated as a supplement to the Criminal Law.

Article 1 Anyone who falsely reports the registered capital of a company when applying for registration to the competent authorities by using fake certificate documents or taking other fraudulent methods to acquire the registration of the company, if to a huge amount, resulting in a serious consequence or other grave effects, shall be sentenced to less than 3 years' imprisonment or criminal detention, and may, together, be fined amounting to no more than 10 percent of the registered capital falsely reported.

The unit applying for registration, who commits the offence provided for in the preceding paragraph, shall be fined amounting to less than 10 percent of the registered capital falsely reported; the person(s) directly in charge and others directly obliged shall be sentenced to less than 3 years' imprisonment or criminal detention in accordance with the provisions stipulated in the preceding paragraph.

Article 2 The promoters, shareholders of a company who, in violation of the Company Law, do not deliver the currencies or property in kind or do not effect the transfer of property rights, falsely deliver the capital contributions or withdraw the capital contributions after the company has been established, if to a huge amount, resulting in a serious consequence or other grave effects, shall be sentenced to less than 5 years' imprisonment or criminal detention, and may, together, be fined amounting to less than 10 percent of the capital falsely delivered or withdrawn.

The unit, committing the offence provided for in the preceding paragraph, shall be fined amounting to less than 10 percent of the capital falsely delivered or withdrawn by the unit; the person(s) directly in charge and others directly obliged shall be sentenced to less than 5 years' imprisonment or criminal detention according to the provisions stipulated in the preceding paragraph.

Article 3 Anyone who issues stocks or corporate bonds by making up fake prospectus, share subscription applications or corporate bond offer procedure, if to a huge amount and resulting in a serious consequence or other grave effects, shall be sentenced to no more than 5 years' imprisonment or criminal detention, and may, together, be fined amounting to no more than 5 percent of the fund illegally raised.

The unit, committing the offence provided for in the preceding paragraph, shall be fined amounting to less than 5 percent of the fund illegally raised; the person(s) directly in charge and others directly obliged shall be sentenced to no more than 5 years' imprisonment or criminal detention according to the provisions stipulated in the preceding paragraph.

Article 4 If a company provides the shareholders and the solo public with a false financial and accounting report or conceals important information in its financial and accounting report, thus seriously infringing upon the interests of shareholders or others, the person(s) directly in charge and others directly obliged shall be sentenced to less than 3 years' imprisonment or criminal detention, and may, together, be fined amounting to no more than CNY 200,000 yuan.

Article 5 In liquidation, if a company hides its assets, makes a false account in its balance sheet or inventory of property sheet, or allocates its assets before clearing off its debts, thus seriously infringing upon the interests of the creditors or others, the person(s) directly in charge and others directly obliged shall be sentenced to no more than 5 years' imprisonment or criminal detention, and may, together, be fined amounting to CNY 200,000 yuan.

Article 6 The personnel in charge of valuation of assets, examination of capital, verification and audit, who deliberately submit false documentation, thus resulting in a grave effect, shall be sentenced to no more than 5 years' imprisonment or criminal detention, and may, together, be fined amounting to no more than CNY 200,000 yuan.

The unit, committing the offence provided for in the preceding paragraph shall be fined amounting to no more than fivefold illegal gains; the person directly in charge and others directly obliged shall be sentenced to imprisonment or criminal detention of no more than 5 years according to the provisions specified in the preceding paragraph.

Article 7 Anyone who issues stocks or corporate bonds without approval of the relevant competent authority regulated by the Company Law, if to a huge amount and resulting in a serious consequence or other grave effects, shall be sentenced to less than 5 years' imprisonment or criminal detention, and may, together, be fined amounting to less than 5 percent of the fund illegally raised.

The unit, committing the offence provided for in the preceding paragraph shall be fined amounting to less than 5 percent of the fund illegally raised by the unit; the person directly in charge shall be sentenced to less than 5 years' imprisonment or criminal detention according to the provisions specified in the preceding paragraph.

Article 8 The state personnel of relevant competent authorities, who grant approval or registration to a company which does not meet the conditions required by the law in the application for its establishment and registration, or for listing or issuance of stocks or corporate bonds, thus seriously infringing upon the public property and the interests of the state and people, shall be punished according to Article 187 of the Criminal Law.

Where the higher-level authority forcefully orders the registration authority and its personnel to take the actions stipulated in the preceding paragraph, the person in charge who is directly responsible shall be punished according to the provisions in the preceding paragraph.

Article 9 A company's director, supervisor or staff member who exploits his office to extort and accept bribery, if to a fairly large amount, shall be sentenced to no more than 5 years' imprisonment or criminal detention, and, if to a huge amount, to no less than 5 years' imprisonment, and his property may, together, be forfeited to the state.

Article 10 A company's director, supervisor or staff member who exploits his office to seize the company's property, if to a fairly large amount, shall be sentenced to no more than 5 years' imprisonment or criminal detention, and, if to a huge amount, to no less more than 5 years' imprisonment, and his property may, together, be forfeited to the state.

Article 11 A company's director, supervisor or staff member who exploits his office to embezzle the public fund of his unit for his private use or for lending it to others, if to a fairly large amount and having not returned it for over 3 months, or using it for profits-seeking purpose or other unlawful activities although having returned it within 3 months, shall be sentenced to no more than 3 years' imprisonment or criminal detention, and, if to a fairly large amount and never returning it, shall be punished as the offence of embezzling-public-funds as provided for in Article 10 of this Decision.

Article 12 State personnel who commit a crime against the provisions as provided for in Article 9, Article 10 and Article 11 of this Decision, shall be punished according to the provisions stipulated in the Supplementary Provisions on Punishment over Crime of Corruption and Bribery.

Article 13 Illegal gains, if any, from the crimes as provided for in this Decision shall be confiscated.

Those who commit crimes against this Decision, with their illegal gains to be confiscated, a fine imposed, their property forfeited and a civil compensation assumed, shall be liable for the civil compensation in priority in case they are insufficient of the assets for payment of all the above items.

Article 14 This Decision shall as well be applicable to the crimes committed against Article 9, Article 10 and Article 11 of this Decision by the staff and workers of enterprises other than limited liability companies and companies limited by shares.

Article 15 This Decision shall enter into force from the date of its promulgation.

ated by the Company Law, if to a huge amount and resulting in a serious consequence or other grave effects, shall be sentenced to less than 5 years' imprisonment or criminal detention, and may, together, be fined amounting to less than 5 percent of the fund illegally raised.

The unit, committing the offence provided for in the preceding paragraph shall be fined amounting to less than 5 percent of the fund illegally raised by the unit; the person directly in charge shall be sentenced to less than 5 years' imprisonment or criminal detention according to the provisions specified in the preceding paragraph.

Article 8 The state personnel of relevant competent authorities, who grant approval or registration to a company which does not meet the conditions required by the law in the application for its establishment and registration, or for listing or issuance of stocks or corporate bonds, thus seriously infringing upon the public property and the interests of the state and people, shall be punished according to Article 187 of the Criminal Law.

Where the higher-level authority forcefully orders the registration authority and its personnel to take the actions stipulated in the preceding paragraph, the person in charge who is directly responsible shall be punished according to the provisions in the preceding paragraph.

Article 9 A company's director, supervisor or staff member who exploits his office to extort and accept bribery, if to a fairly large amount, shall be sentenced to no more than 5 years' imprisonment or criminal detention, and, if to a huge amount, to no less than 5 years' imprisonment, and his property may, together, be forfeited to the state.

Article 10 A company's director, supervisor or staff member who exploits his office to seize the company's property, if to a fairly large amount, shall be sentenced to no more than 5 years' imprisonment or criminal detention, and, if to a huge amount, to no less more than 5 years' imprisonment, and his property may, together, be forfeited to the state.

Article 11 A company's director, supervisor or staff member who exploits his office to embezzle the public fund of his unit for his private use or for lending it to others, if to a fairly large amount and having not returned it for over 3 months, or using it for profits-seeking purpose or other unlawful activities although having returned it within 3 months, shall be sentenced to no more than 3 years' imprisonment or criminal detention, and, if to a fairly large amount and never returning it, shall be punished as the offence of embezzling-public-funds as provided for in Article 10 of this Decision.

Article 12 State personnel who commit a crime against the provisions as provided for in Article 9, Article 10 and Article 11 of this Decision, shall be punished according to the provisions stipulated in the Supplementary Provisions on Punishment over Crime of Corruption and Bribery.

Article 13 Illegal gains, if any, from the crimes as provided for in this Decision shall be confiscated.

Those who commit crimes against this Decision, with their illegal gains to be confiscated, a fine imposed, their property forfeited and a civil compensation assumed, shall be liable for the civil compensation in priority in case they are insufficient of the assets for payment of all the above items.

Article 14 This Decision shall as well be applicable to the crimes committed against Article 9, Article 10 and Article 11 of this Decision by the staff and workers of enterprises other than limited liability companies and companies limited by shares.

Article 15 This Decision shall enter into force from the date of its promulgation.