Chapter I General Provisions
Article 1 For the purposes of promoting the development of startup investment enterprises, regulating their investment operations and encouraging them to invest in small and medium-sized enterprises, especially the small and medium-sized high and new tech enterprises, these Measures are formulated in accordance with the Company Law of the People's Republic of China, Law of the People's Republic of China on the Promotion of Small and Medium-sized Enterprises, and other laws and regulations.
Article 2 The term "startup investment enterprise" as mentioned in these Measures refers to any enterprise organization registered and established within the territory of the People's Republic of China for the purpose of mainly engaging in startup investment activities. The term "startup investment" as mentioned in the preceding paragraph refers to the investment mode that any stock right is invested into a startup enterprise for expectation of profits of capital increment by way of stock right transfer after the invested startup enterprise becomes mature or relatively mature. The term "startup enterprise" refers to any growing enterprise registered and established within the territory of the People's Republic of China and is during the course of establishing or re-establishing , excluding those enterprises that have listed in the open market.
Article 3 The state adopts archival filing management for startup investment enterprises. Where any startup investment enterprise has gone through the archival filing formalities in accordance with these Measures, it shall accept the supervision of the administrative organ for startup investment enterprises and may enjoy the policy support when it carries out investment operations in conformity with the relevant provisions. Where any startup investment enterprise fails to go through the archival filing formalities according to these Measures, it shall not subject to the supervision of the administrative organ for startup investment enterprises, nor does it enjoy the corresponding policy support.
Article 4 The archival filing administrative departments are classified into two levels, i.e. administrative department of the State Council and administrative departments of the provinces (including sub-provincial cities). The administrative department of the State Council shall be the National Development and Reform Commission. The administrative departments of a province (including sub-provincial city) shall be determined by the people's government at the same level, perform the corresponding archival filing administration functions after it has gone through the archival filing formalities in the administrative department of the State Council, and accept the guidance of the administrative department of the State Council on the archival filing administration work of the startup investment enterprises.
Article 5 The Provisions on the Administration of Foreign-funded Startup Investment Enterprises shall be applied to foreign-funded startup investment enterprises. If the investment operations carried out by a lawfully established foreign-funded startup investment enterprise accord with the relevant conditions, this enterprise may enjoy the relevant policy support granted to startup investment enterprises under these Measures.
Chapter II The Establishment and Archival Filing of Startup Investment Enterprises
Article 6 A startup investment enterprise may be established in the form of a limited liability company, joint stock limited company, or any other enterprise organization as prescribed by law. A startup investment enterprise established in the form of a company may entrust another startup investment enterprise or startup investment management consulting enterprise to act as its management consulting institution, which shall be responsible for the management of its investments. The General Principles of the Civil Law of the People's Republic of China, the Contract Law of the People's Republic of China, and other relevant laws and regulations shall be applied to the relationship between the consigner and the attorney.
Article 7 To apply for establishing a startup investment enterprise or startup investment management consulting enterprise, the applicant shall register directly in the administrative department for industry and commerce according to law.
Article 8 A startup investment enterprise registered in the administrative department for industry and commerce of the state shall apply the archival filing formalities in the administrative department of the State Council. A startup investment enterprise registered in the administrative department for industry and commerce at the province level or below shall apply the archival filing formalities in the local administrative department of the province (including sub-provincial city).
Article 9 To go through the archival filing formalities, a startup investment enterprise shall provided with the following conditions:
(1) It has been registered in the administrative department for industry and commerce;
(2) Its business scope conforms to the provisions of Article 12 of these Measures;
(3) The amount of its actual paid-in capital is no less than RMB 30 million yuan, or the amount of the down payment of its paid-in capital is not less than RMB 10 million yuan, and all investors make a commitment to make up the balance of actual paid-in capital in a sum of not less than RMB 30 million yuan within 5 years after the registration;
(4) The number of investors shall not exceed 200 persons. For a startup investment enterprise established in the form of a limited liability company, the number of investors shall not exceed 50 persons. The amount of investment made by a single investor into a startup investment enterprise shall not be less than 1 million yuan. All investors shall make investments in monetary form.
(5) It shall have at least 3 senior managers who have 2 or more years of startup investment experience or other relevant business experience to take charge of the investment management. If it entrusts another startup investment enterprise or startup investment management consulting enterprise as a management consulting institution to undertake its investment management responsibilities, this management consulting institution shall have at least 3 senior managers who have 2 or more years of startup investment experience or other relevant business experience to undertake the investment management responsibilities. The term "senior managers" as mentioned in the preceding paragraph refers to the administration personnel who hold the position of vice manager or higher positions or equivalent positions.
Article 10 To go through the archival filing formalities in the administrative department, a startup investment enterprise shall submit the following documents:
(1) The articles of association and other legal documents that regulate the organizational procedures and acts of the startup investment enterprise;
(2) The photocopies of the industrial and commercial registration documents and business license;
(3) The name list of the investors, commitments to contributed capital, and certificates for the already paid contributed capital; and
(4) The name list and resumes of the senior administration personnel.
If it entrusts a management consulting institution to be responsible for its investment management, it shall submit the following documents besides those as listed above:
(1) The articles of association and other legal documents that regulate the organizational procedures and the acts of the management consulting institution;
(2) The photocopies of the industrial and commercial registration documents and business license of the management consulting institution;
(3) The name list and resumes of the senior administration personnel of the management consulting institution
(4) The entrusted management agreement .
Article 11 After the administrative department receives an archival filing application of a startup investment enterprise, it shall, within 5 working days, examine whether or not the archival filing application documents are completed, and shall decide whether or not to accept the application. After it accepts the application, it shall, within 20 working days, examine whether or not the applicant meets the archival filing requirements and issue to it a written notice of "Archival Filing Completed" or "Archival Filing Rejected". If the archival filing application is rejected, the reasons shall be stated in the written notice.
Chapter III The Investment Operations of Startup Investment Enterprises
Article 12 The business scope of a startup investment enterprise is limited to:
(1) to make startup investments;
(2) to act as an agent in the startup investment business of other startup investment enterprises or individuals;
(3) to provide startup investment consulting services;
(4) to provide startup management services to startup enterprises; and
(5) to participate in the establishment of startup investment enterprises and startup investment management consulting institutions.
Article 13 No startup investment enterprise may engage in any guaranty business or real estate business except for the purchase of real estate for its own use.
Article 14 A startup investment enterprise may make investments with its all assets, of which the investments to enterprises shall be limited to the unlisted enterprises. However, after an unlisted enterprise it invests in gets listed, its unassigned shares as well as the allocated shares are not subject to this restriction. It can only deposit its other funds in a bank, and use them to purchase government bonds or other securities with fixed proceeds.
Article 15 A startup investment enterprise may, by signing an investment agreement with the enterprise it invests in, make investments in the unlisted enterprise by way of its stock rights, preferred stocks, convertible preferred stocks and other quasi stock rights.
Article 16 The investments made by a startup investment enterprise into a single enterprise shall not exceed 20% of its total assets.
Article 17 A startup investment enterprise shall, in the articles of association, agreement on entrusted management, and other legal documents, specify the methods for the calculate and deduct method of management and operational fees, or management consulting expenses of the management consulting institution, so as to establish a management cost control mechanism.
Article 18 A startup investment enterprise may draw a certain proportion of investment proceeds as performance-based remuneration to the managerial personnel or to the management consulting institution so as to establish a performance incentive mechanism.
Article 19 A startup investment enterprise may determine a limited time period of existence in advance, but which shall not be less than 7 years.
Article 20 A startup investment enterprise may enhance its investment capacity by way of creditor's right financing in the scope of the clauses of the law..
Article 21 A startup investment enterprise shall, in accordance with the relevant enterprise financial and accounting provisions of the state, establish and improve a sound financial management system and accounting measures.
Chapter IV The Policy Support to Startup Investment Enterprises
Article 22 The state and local governments may establish startup investment direction funds so as to support the establishment and development of startup investment enterprises by way of holding their shares, providing financing guaranties, etc. The concrete management measures shall be formulated separately.
Article 23 The state shall adopt tax preferential policies to support the development of startup investment enterprises and direct them to increase investments to small and medium-sized enterprises, especially the small and medium-sized high and new tech enterprises. The concrete measures shall be separately formulated by the finance and taxation department of the State Council jointly with other relevant departments.
Article 24 A startup investment enterprise may withdraw its investments by transfer of listed equities, transfer of equities by agreement, repurchasing by the invested enterprise or by other means. The relevant departments of the state shall actively push ahead the construction of the multi-level system of market and perfect the investment dropout mechanism for startup investment enterprises.
Chapter V Supervision and Administration over Startup Investment Enterprises
Article 25 A startup investment enterprise and its management consulting institution that have gone through the archival filing formalities in the administrative department shall, in accordance with the provisions of all the articles in Chapters II and III of these Measures, carry out investment operations and shall accept the supervision and administration of the administrative department.
Article 26 A startup investment enterprise and its management consulting institution that have gone through the archival filing formalities in the administrative department shall, within 4 months after the end of each fiscal year, submit their annual financial statements and business reports audited by certified public accountants to the administrative department, and shall report to it the significant events during its investment operation course. The "significant events" as mentioned in the preceding paragraph refers to:
(1) revisions to the articles of association and other important legal documents;
(2) increase or reduction of capital;
(3) split-up or merger,
(4) change of senior management personal or management consulting institution; and
(5) liquidation and termination of business.
Article 27 The administrative department shall, within 5 months after the end of each fiscal year, conduct an annual inspection over the startup investment enterprise and its management consulting institution so as to determine whether or not it complies with the provisions of all the articles in Chapters II and III. Where necessary, it may, within the range as prescribed by the relevant articles of Chapters II and III, irregularly carry out inspections over its investment operations. If it fails to carry out investment operations by following the provisions of all the articles in Chapters II and III of these Measures, it shall be ordered by the administrative department to make corrections within 30 working days. If it fails to make corrections, its archival filing shall be canceled and its new application for archival filling during the coming 3 years shall be rejected.
Article 28 The administrative departments of all provinces (including sub-provincial cities) shall timely report the information about the archival filing of startup investment enterprises within their respective jurisdiction to the administrative department of the State Council and shall, within 6 months after the end of each fiscal year, report the information about the investment operations of the startup investment enterprises that have been listed in the scope of archival filing administration.
Article 29 The administrative department of the State Council shall strengthen the guidance to the administrative departments of all provinces (including sub-provincial cities). If any of them fails to fulfill the administrative functions or fails to manage properly, it shall propose it to make corrections. If any bad consequences are caused, it shall propose it to hold the relevant managerial personnel liable for their negligence of duties.
Article 30 The startup investment associations shall, according to these Measures, relevant laws, rules and regulations, carry out self-disciplinary management over the startup investment enterprises and maintain the rights and interests of this sector.
Chapter VI Supplementary Provisions
Article 31 The power to interpret these Measures shall remain with the National Development and Reform Commission jointly with other relevant departments.
Article 32 These Measures shall come into force as of March 1, 2006.
