Decree of the President of the People’s Republic of China No. 26
I hereby promulgate the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, including Annex
I, Method for the Selection of the Chief Executive of the Hong Kong Special Administrative Region, Annex II, Method for the Formation
of the Legislative Council of the Hong Kong Special Administrative Region and Its Voting Procedures, Annex III, National Laws to
be Applied in the Hong Kong Special Administrative Region, and designs of the regional flag and regional emblem of the Hong Kong
Special Administrative Region, which was adopted at the Third Session of the Seventh National People’s Congress of the People’s Republic
of China on 4 April 1990 and shall be put into effect as of 1 July 1997.
(Signed)Yang Shangkun
President of the People’s Republic of China
4 April 1990
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The Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China
(Adopted at the Third Session of the Seventh National People’s Congress on April 4, 1990, promulgated by Order No. 26 of the President
of the People’s Republic of China on April 4, 1990, and effective as of July 1, 1997)
Preamble
Chapter I – General Principles
Chapter II – Relationship between the Central Authorities and the Hong Kong Special Administrative Region
Chapter III – Fundamental Rights and Duties of the Residents
Chapter IV – Political Structure
Section 1 – The Chief Executive
Section 2 – The Executive Authorities
Section 3 – The Legislature
Section 4 – The Judiciary
Section 5 – District Organizations
Section 6 – Public Servants
Chapter V – Economy
Section 1 – Public Finance/ Monetary Affairs, Trade, Industry and Commerce
Section 2 – Land Leases
Section 3 – Shipping
Section 4 – Civil Aviation
Chapter VI – Education, Science, Culture, Sports, Religion, Labour and Social Services
ChapterVII – External Affairs
ChapterVIII – Interpretation and Amendment of the Basic Law
Chapter IX – Supplementary Provisions
Annex I – Method for the Selection of the Chief Executive of the Hong Kong Special Administrative Region
Annex II – Method for the Formation of the Legislative Council of the Hong Kong Special Administrative Region and Its Voting Procedures
Annex III – National Laws to be Applied in the Hong Kong Special Administrative Region
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Preamble
Hong Kong has been part of the territory of China since ancient times; it was occupied by Britain after the Opium War in 1840. On
19 December 1984, the Chinese and British Governments signed the Joint Declaration on the Question of Hong Kong, affirming that the
Government of the People’s Republic of China will resume the exercise of sovereignty over Hong Kong with effect from 1 July 1997,
thus fulfilling the long-cherished common aspiration of the Chinese people for the recovery of Hong Kong.
Upholding national unity and territorial integrity, maintaining the prosperity and stability of Hong Kong, and taking account of its
history and realities, the People’s Republic of China has decided that upon China’s resumption of the exercise of sovereignty over
Hong Kong, a Hong Kong Special Administrative Region will be established in accordance with the provisions of Article 31 of the Constitution
of the People’s Republic of China, and that under the principle of “one country, two systems”, the socialist system and policies
will not be practised in Hong Kong. The basic policies of the People’s Republic of China regarding Hong Kong have been elaborated
by the Chinese Government in the Sino-British Joint Declaration.
In accordance with the Constitution of the People’s Republic of China, the National People’s Congress hereby enacts the Basic Law
of the Hong Kong Special Administrative Region of the People’s Republic of China, prescribing the systems to be practised in the
Hong Kong Special Administrative Region, in order to ensure the implementation of the basic policies of the People’s Republic of
China regarding Hong Kong.
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Chapter I: General Principles
Article 1
The Hong Kong Special Administrative Region is an inalienable part of the People’s Republic of China.
Article 2
The National People’s Congress authorizes the Hong Kong Special Administrative Region to exercise a high degree of autonomy and enjoy
executive, legislative and independent judicial power, including that of final adjudication, in accordance with the provisions of
this Law.
Article 3
The executive authorities and legislature of the Hong Kong Special Administrative Region shall be composed of permanent residents
of Hong Kong in accordance with the relevant provisions of this Law.
Article 4
The Hong Kong Special Administrative Region shall safeguard the rights and freedoms of the residents of the Hong Kong Special Administrative
Region and of other persons in the Region in accordance with law.
Article 5
The socialist system and policies shall not be practised in the Hong Kong Special Administrative Region, and the previous capitalist
system and way of life shall remain unchanged for 50 years.
Article 6
The Hong Kong Special Administrative Region shall protect the right of private ownership of property in accordance with law.
Article 7
The land and natural resources within the Hong Kong Special Administrative Region shall be State property. The Government of the Hong
Kong Special Administrative Region shall be responsible for their management, use and development and for their lease or grant to
individuals, legal persons or organizations for use or development. The revenues derived therefrom shall be exclusively at the disposal
of the government of the Region.
Article 8
The laws previously in force in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary
law shall be maintained, except for any that contravene this Law, and subject to any amendment by the legislature of the Hong Kong
Special Administrative Region.
Article 9
In addition to the Chinese language, English may also be used as an official language by the executive authorities, legislature and
judiciary of the Hong Kong Special Administrative Region.
Article 10
Apart from displaying the national flag and national emblem of the People’s Republic of China, the Hong Kong Special Administrative
Region may also use a regional flag and regional emblem.
The regional flag of the Hong Kong Special Administrative Region is a red flag with a bauhinia highlighted by five star-tipped stamens.
The regional emblem of the Hong Kong Special Administrative Region is a bauhinia in the centre highlighted by five star-tipped stamens
and encircled by the words “Hong Kong Special Administrative Region of the People’s Republic of China” in Chinese and “HONG KONG”
in English.
Article 11
In accordance with Article 31 of the Constitution of the People’s Republic of China, the systems and policies practised in the Hong
Kong Special Administrative Region, including the social and economic systems, the system for safeguarding the fundamental rights
and freedoms of its residents, the executive, legislative and judicial systems, and the relevant policies, shall be based on the
provisions of this Law.
No law enacted by the legislature of the Hong Kong Special Administrative Region shall contravene this Law.
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Chapter II: Relationship between the Central Authorities and the Hong Kong Special Administrative Region
Article 12
The Hong Kong Special Administrative Region shall be a local administrative region of the People’s Republic of China, which shall
enjoy a high degree of autonomy and come directly under the Central People’s Government.
Article 13
The Central People’s Government shall be responsible for the foreign affairs relating to the Hong Kong Special Administrative Region.
The Ministry of Foreign Affairs of the People’s Republic of China shall establish an office in Hong Kong to deal with foreign affairs.
The Central People’s Government authorizes the Hong Kong Special Administrative Region to conduct relevant external affairs on its
own in accordance with this Law.
Article 14
The Central People’s Government shall be responsible for the defence of the Hong Kong Special Administrative Region.
The Government of the Hong Kong Special Administrative Region shall be responsible for the maintenance of public order in the Region.
Military forces stationed by the Central People’s Government in the Hong Kong Special Administrative Region for defence shall not
interfere in the local affairs of the Region. The Government of the Hong Kong Special Administrative Region may, when necessary,
ask the Central People’s Government for assistance from the garrison in the maintenance of public order and in disaster relief.
In addition to abiding by national laws, members of the garrison shall abide by the laws of the Hong Kong Special Administrative Region.
Expenditure for the garrison shall be borne by the Central People’s Government.
Article 15
The Central People’s Government shall appoint the Chief Executive and the principal officials of the executive authorities of the
Hong Kong Special Administrative Region in accordance with the provisions of Chapter IV of this Law.
Article 16
The Hong Kong Special Administrative Region shall be vested with executive power. It shall, on its own, conduct the administrative
affairs of the Region in accordance with the relevant provisions of this Law.
Article 17
The Hong Kong Special Administrative Region shall be vested with legislative power.
Laws enacted by the legislature of the Hong Kong Special Administrative Region must be reported to the Standing Committee of the National
People’s Congress for the record. The reporting for record shall not affect the entry into force of such laws.
If the Standing Committee of the National People’s Congress, after consulting the Committee for the Basic Law of the Hong Kong Special
Administrative Region under it, considers that any law enacted by the legislature of the Region is not in conformity with the provisions
of this Law regarding affairs within the responsibility of the Central Authorities or regarding the relationship between the Central
Authorities and the Region, the Standing Committee may return the law in question but shall not amend it. Any law returned by the
Standing Committee of the National People’s Congress shall immediately be invalidated. This invalidation shall not have retroactive
effect, unless otherwise provided for in the laws of the Region.
Article 18
The laws in force in the Hong Kong Special Administrative Region shall be this Law, the laws previously in force in Hong Kong as provided
for in Article 8 of this Law, and the laws enacted by the legislature of the Region.
National laws shall not be applied in the Hong Kong Special Administrative Region except for those listed in Annex III to this Law.
The laws listed therein shall be applied locally by way of promulgation or legislation by the Region.
The Standing Committee of the National People’s Congress may add to or delete from the list of laws in Annex III after consulting
its Committee for the Basic Law of the Hong Kong Special Administrative Region and the government of the Region. Laws listed in Annex
III to this Law shall be confined to those relating to defence and foreign affairs as well as other matters outside the limits of
the autonomy of the Region as specified by this Law.
In the event that the Standing Committee of the National People’s Congress decides to declare a state of war or, by reason of turmoil
within the Hong Kong Special Administrative Region which endangers national unity or security and is beyond the control of the government
of the Region, decides that the Region is in a state of emergency, the Central People’s Government may issue an order applying the
relevant national laws in the Region.
Article 19
The Hong Kong Special Administrative Region shall be vested with independent judicial power, including that of final adjudication.
The courts of the Hong Kong Special Administrative Region shall have jurisdiction over all cases in the Region, except that the restrictions
on their jurisdiction imposed by the legal system and principles previously in force in Hong Kong shall be maintained.
The courts of the Hong Kong Special Administrative Region shall have no jurisdiction over acts of state such as defence and foreign
affairs. The courts of the Region shall obtain a certificate from the Chief Executive on questions of fact concerning acts of state
such as defence and foreign affairs whenever such questions arise in the adjudication of cases. This certificate shall be binding
on the courts. Before issuing such a certificate, the Chief Executive shall obtain a certifying document from the Central People’s
Government.
Article 20
The Hong Kong Special Administrative Region may enjoy other powers granted to it by the National People’s Congress, the Standing Committee
of the National People’s Congress or the Central People’s Government.
Article 21
Chinese citizens who are residents of the Hong Kong Special Administrative Region shall be enpost_titled to participate in the management
of state affairs according to law.
In accordance with the assigned number of seats and the selection method specified by the National People’s Congress, the Chinese
citizens among the residents of the Hong Kong Special Administrative Region shall locally elect deputies of the Region to the National
People’s Congress to participate in the work of the highest organ of state power.
Article 22
No department of the Central People’s Government and no province, autonomous region, or municipality directly under the Central Government
may interfere in the affairs which the Hong Kong Special Administrative Region administers on its own in accordance with this Law.
If there is a need for departments of the Central Government, or for provinces, autonomous regions, or municipalities directly under
the Central Government to set up offices in the Hong Kong Special Administrative Region, they must obtain the consent of the government
of the Region and the approval of the Central People’s Government.
All offices set up in the Hong Kong Special Administrative Region by departments of the Central Government, or by provinces, autonomous
regions, or municipalities directly under the Central Government, and the personnel of these offices shall abide by the laws of the
Region.
For entry into the Hong Kong Special Administrative Region, people from other parts of China must apply for approval. Among them,
the number of persons who enter the Region for the purpose of settlement shall be determined by the competent authorities of the
Central People’s Government after consulting the government of the Region.
The Hong Kong Special Administrative Region may establish an office in Beijing.
Article 23
The Hong Kong Special Administrative Region shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion
against the Central People’s Government, or theft of state secrets, to prohibit foreign political organizations or bodies from conducting
political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign
political organizations or bodies.
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Chapter III: Fundamental Rights and Duties of the Residents
Article 24
Residents of the Hong Kong Special Administrative Region (“Hong Kong residents”) shall include permanent residents and non-permanent
residents.
The permanent residents of the Hong Kong Special Administrative Region shall be:
(1) Chinese citizens born in Hong Kong before or after the establishment of the Hong Kong Special Administrative Region;
(2) Chinese citizens who have ordinarily resided in Hong Kong for a continuous period of not less than seven years before or after
the establishment of the Hong Kong Special Administrative Region;
(3) Persons of Chinese nationality born outside Hong Kong of those residents listed in categories (1) and (2);
(4) Persons not of Chinese nationality who have entered Hong Kong with valid travel documents, have ordinarily resided in Hong Kong
for a continuous period of not less than seven years and have taken Hong Kong as their place of permanent residence before or after
the establishment of the Hong Kong Special Administrative Region;
(5) Persons under 21 years of age born in Hong Kong of those residents listed in category (4) before or after the establishment of
the Hong Kong Special Administrative Region; and
(6) Persons other than those residents listed in categories (1) to (5), who, before the establishment of the Hong Kong Special Administrative
Region, had the right of abode in Hong Kong only.
The above-mentioned residents shall have the right of abode in the Hong Kong Special Administrative Region and shall be qualified
to obtain, in accordance with the laws of the Region, permanent identity cards which state their right of abode.
The non-permanent residents of the Hong Kong Special Administrative Region shall be persons who are qualified to obtain Hong Kong
identity cards in accordance with the laws of the Region but have no right of abode.
Article 25
All Hong Kong residents shall be equal before the law.
Article 26
Permanent residents of the Hong Kong Special Administrative Region shall have the right to vote and the right to stand for election
in accordance with law.
Article 27
Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession
and of demonstration; and the right and freedom to form and join trade unions, and to strike.
Article 28
The freedom of the person of Hong Kong residents shall be inviolable.
No Hong Kong resident shall be subjected to arbitrary or unlawful arrest, detention or imprisonment. Arbitrary or unlawful search
of the body of any resident or deprivation or restriction of the freedom of the person shall be prohibited. Torture of any resident
or arbitrary or unlawful deprivation of the life of any resident shall be prohibited.
Article 29
The homes and other premises of Hong Kong residents shall be inviolable. Arbitrary or unlawful search of, or intrusion into, a resident’s
home or other premises shall be prohibited.
Article 30
The freedom and privacy of communication of Hong Kong residents shall be protected by law. No department or individual may, on any
grounds, infringe upon the freedom and privacy of communication of residents except that the relevant authorities may inspect communication
in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.
Article 31
Hong Kong residents shall have freedom of movement within the Hong Kong Special Administrative Region and freedom of emigration to
other countries and regions. They shall have freedom to travel and to enter or leave the Region. Unless restrained by law, holders
of valid travel documents shall be free to leave the Region without special authorization.
Article 32
Hong Kong residents shall have freedom of conscience.
Hong Kong residents shall have freedom of religious belief and freedom to preach and to conduct and participate in religious activities
in public.
Article 33
Hong Kong residents shall have freedom of choice of occupation.
Article 34
Hong Kong residents shall have freedom to engage in academic research, literary and artistic creation, and other cultural activities.
Article 35
Hong Kong residents shall have the right to confidential legal advice, access to the courts, choice of lawyers for timely protection
of their lawful rights and interests or for representation in the courts, and to judicial remedies.
Hong Kong residents shall have the right to institute legal proceedings in the courts against the acts of the executive authorities
and their personnel.
Article 36
Hong Kong residents shall have the right to social welfare in accordance with law. The welfare benefits and retirement security of
the labour force shall be protected by law.
Article 37
The freedom of marriage of Hong Kong residents and their right to raise a family freely shall be protected by law.
Article 38
Hong Kong residents shall enjoy the other rights and freedoms safeguarded by the laws of the Hong Kong Special Administrative Region.
Article 39
The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural
Rights, and international labour conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws
of the Hong Kong Special Administrative Region.
The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall
not contravene the provisions of the preceding paragraph of this Article.
Article 40
The lawful traditional rights and interests of the indigenous inhabitants of the “New Territories” shall be protected by the Hong
Kong Special Administrative Region.
Article 41
Persons in the Hong Kong Special Administrative Region other than Hong Kong residents shall, in accordance with law, enjoy the rights
and freedoms of Hong Kong residents prescribed in this Chapter.
Article 42
Hong Kong residents and other persons in Hong Kong shall have the obligation to abide by the laws in force in the Hong Kong Special
Administrative Region.
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Chapter IV: Political Structure
Section 1: The Chief Executive
Article 43
The Chief Executive of the Hong Kong Special Administrative Region shall be the head of the Hong Kong Special Administrative Region
and shall represent the Region.
The Chief Executive of the Hong Kong Special Administrative Region shall be accountable to the Central People’s Government and the
Hong Kong Special Administrative Region in accordance with the provisions of this Law.
Article 44
The Chief Executive of the Hong Kong Special Administrative Region shall be a Chinese citizen of not less than 40 years of age who
is a permanent resident of the Region with no right of abode in any foreign country and has ordinarily resided in Hong Kong for a
continuous period of not less than 20 years.
Article 45
The Chief Executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally
and be appointed by the Central People’s Government.
The method for selecting the Chief Executive shall be specified in the light of the actual situation in the Hong Kong Special Administrative
Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive
by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.
The specific method for selecting the Chief Executive is prescribed in Annex I: “Method for the Selection of the Chief Executive of
the Hong Kong Special Administrative Region”.
Article 46
The term of office of the Chief Executive of the Hong Kong Special Administrative Region shall be five years. He or she may serve
for not more than two consecutive terms.
Article 47
The Chief Executive of the Hong Kong Special Administrative Region must be a person of integrity, dedicated to his or her duties.
The Chief Executive on assuming office, shall declare his or her assets to the Chief Justice of the Court of Final Appeal of the Hong
Kong Special Administrative Region. This declaration shall be put on record.
Article 48
The Chief Executive of the Hong Kong Special Administrative Region shall exercise the following powers and functions:
(1) To lead the government of the Region;
(2) To be responsible for the implementation of this Law and other laws which, in accordance with this Law, apply in the Hong Kong
Special Administrative Region;
(3) To sign bills passed by the Legislative Council and to promulgate laws;
To sign budgets passed by the Legislative Council and report the budgets and final accounts to the Central People’s Government for
the record;
(4) To decide on government policies and to issue executive orders;
(5) To nominate and to report to the Central People’s Government for appointment the following principal officials: Secretaries and
Deputy Secretaries of Departments, Directors of Bureaux, Commissioner Against Corruption, Director of Audit, Commissioner of Police,
Director of Immigration and Commissioner of Customs and Excise; and to recommend to the Central People’s Government the removal of
the above-mentioned officials;
(6) To appoint or remove judges of the courts at all levels in accordance with legal procedures;
(7) To appoint or remove holders of public office in accordance with legal procedures;
(8) To implement the directives issued by the Central People’s Government in respect of the relevant matters provided for in this
Law;
(9) To conduct, on behalf of the Government of the Hong Kong Special Administrative Region, external affairs and other affairs as
authorized by the Central Authorities;
(10) To approve the introduction of motions regarding revenues or expenditure to the Legislative Council;
(11) To decide, in the light of security and vital public interests, whether government officials or other personnel in charge of
government affairs should testify or give evidence before the Legislative Council or its committees;
(12) To pardon persons convicted of criminal offences or commute their penalties; and
(13) To handle petitions and complaints.
Article 49
If the Chief Executive of the Hong Kong Special Administrative Region considers that a bill passed by the Legislative Council is not
compatible with the overall interests of the Region, he or she may return it to the Legislative Council within three months for reconsideration.
If the Legislative Council passes the original bill again by not less than a two-thirds majority of all the members, the Chief Executive
must sign and promulgate it within one month, or act in accordance with the provisions of Article 50 of this Law.
Article 50
If the Chief Executive of the Hong Kong Special Administrative Region refuses to sign a bill passed the second time by the Legislative
Council, or the Legislative Council refuses to pass a budget or any other important bill introduced by the government, and if consensus
still cannot be reached after consultations, the Chief Executive may dissolve the Legislative Council.
The Chief Executive must consult the Executive Council before dissolving the Legislative Council. The Chief Executive may dissolve
the Legislative Council only once in each term of his or her office.
Article 51
If the Legislative Council of the Hong Kong Special Administrative Region refuses to pass the budget introduced by the government,
the Chief Executive may apply to the Legislative Council for provisional appropriations. If appropriation of public funds cannot
be approved because the Legislative Council has already been dissolved, the Chief Executive may, prior to the election of the new
Legislative Council, approve provisional short-term appropriations according to the level of expenditure of the previous fiscal year.
Article 52
The Chief Executive of the Hong Kong Special Administrative Region must resign under any of the following circumstances:
(1) When he or she loses the ability to discharge his or her duties as a result of serious illness or other reasons;
(2) When, after the Legislative Council is dissolved because he or she twice refuses to sign a bill passed by it, the new Legislative
Council again passes by a two-thirds majority of all the members the original bill in dispute, but he or she still refuses to sign
it; and
(3) When, after the Legislative Council is dissolved because it refuses to pass a budget or any other important bill, the new Legislative
Council still refuses to pass the original bill in dispute.
Article 53
If the Chief Executive of the Hong Kong Special Administrative Region is not able to discharge his or her duties for a short period,
such duties shall temporarily be assumed by the Administrative Secretary, Financial Secretary or Secretary of Justice in this order
of precedence.
In the event that the office of Chief Executive becomes vacant, a new Chief Executive shall be selected within six months in accordance
with the provisions of Article 45 of this Law. During the period of vacancy, his or her duties shall be assumed according to the
provisions of the preceding paragraph.
Article 54
The Executive Council of the Hong Kong Special Administrative Region shall be an organ for assisting the Chief Executive in policy-making.
Article 55
Members of the Executive Council of the Hong Kong Special Administrative Region shall be appointed by the Chief Executive from among
the principal officials of the executive authorities, members of the Legislative Council and public figures. Their appointment or
removal shall be decided by the Chief Executive. The term of office of members of the Executive Council shall not extend beyond the
expiry of the term of office of the Chief Executive who appoints them.
Members of the Executive Council of the Hong Kong Special Administrative Region shall be Chinese citizens who are permanent residents
of the Region with no right of abode in any foreign country.
The Chief Executive may, as he or she deems necessary, invite other perso
Category |
SECURITIES |
Organ of Promulgation |
The State Council |
Status of Effect |
In Force |
Date of Promulgation |
1997-05-21 |
Effective Date |
1997-05-21 |
|
|
Circular of the State Council on the Approval and Transmission of the “Rules Concerning Strict Prohibition of Scalping in Stocks
by State-owned Enterprises and Listed Companies” by the State Council’s Securities Commission, the People’s Bank of China and the
State Economic and Trade Commission |
Appendix: RULES CONCERNING STRICT PROHIBITION OF SCALPING IN STOCKS BY
(May 21, 1997)
The State Council has approved the “Rules Concerning Strict Prohibition
of Scalping in Stocks by State-owned Enterprises and Listed Companies”
by the State Council’s Securities Commission, the People’s Bank of China
and the State Economic and Trade Commission which is hereby transmitted
to you for conscientious implementation.
Appendix: RULES CONCERNING STRICT PROHIBITION OF SCALPING IN STOCKS BY
STATE-OWNED ENTERPRISES AND LISTED COMPANIES (The State Council’s Securities
Commission, the People’s Bank of China and the State Economic and Trade
Commission May 21, 1997)
Securities markets in our country are still in their incipient stage of
development and there exist serious phenomena of over-speculation and
violation of rules. Crackdown on activities in violation of rules and
curb of over-speculation are of crucial importance in promoting the sound
development of socialist market economy and maintenance of social stability
to which great importance must be attached. For some time in the recent past,
funds of state-owned commercial banks have flowed into stock markets
through various channels. Some state-owned enterprises and listed companies
have engaged in scalping in stocks with bank credit funds; some listed
companies have put funds from solicited shares meant for production and
operations into stock markets for scalping in stocks; some state-owned
enterprises have put self-owned funds meant for self-development into stock
markets for scalping in stocks. On the one hand, such state of affairs has
encouraged speculation in stock markets; on the other, it has put state-owned
assets in a high-risk state, seriously endangering the security of
state-owned assets. To bring into play the function of the socialist stock
markets in raising funds for economic construction and promoting
transformation of operations mechanism of the enterprises, and to maintain
normal order in the markets, scalping in stock markets by the state-owned
enterprises and listed companies must be curbed. The following rules are
hereby laid down:
1.The state-owned enterprises shall not scalp in stocks or provide funds
to other institutions for scalping in stocks, nor shall they draw on
state bank credit funds in buying and selling stocks.
Scalping in stocks referred to in these Rules mean the acts of buying in
and selling of stocks or selling and buying in of stocks within the time
period prescribed by the competent department under the State Council.
2.Listed companies shall not draw on bank credit funds to buy and sell
stocks, or funds raised through issuance of stocks, nor shall they provide
funds to other institutions for scalping in stocks.
3.The state-owned enterprises’ and listed companies’ holding of listed
circulating stocks for long-term investment (beyond the time period prescribed
by the competent department under the State Council) shall be reported to
securities exchanges. Securities exchanges should take measures to strengthen
management and supervise the state-owned enterprises and listed companies in
the observance of the relevant requirements of these Rules.
4.The state-owned enterprises and listed companies are only enpost_titled to
open a stock account (stock A) in an exchange, and must use the name of the
enterprise proper (the legal person). Opening of a stock account in the name
of a person or provision of funds for the buying and selling of stocks for
individuals by the state-owned enterprises and listed companies shall be
strictly prohibited. Units with the aforesaid problems must amend within
one month starting from the date of promulgation of these Rules; units that
refuse to amend shall be severely penalized and responsibilities of their
legal representatives or those directly responsible shall be investigated.
5.Securities exchanges, securities registration and settlement agencies
and securities operating agencies shall carry out inspection with respect to
the stock accounts and capital accounts already opened, in case scalping in
stocks by the state-owned enterprises and listed companies, or opening of
stock accounts in the name of individuals and provision of funds for
individual stock accounts are found, those involved shall be asked to
make corrections forthwith and timely reports shall be submitted to the
China Securities Supervisory Commission.
6.People’s governments of all provinces, autonomous regions and
municipalities directly under the Central Government and all departments
under the State Council shall carry out forthwith inspection on the status
of the state-owned enterprises under them in scalping in stocks, all
departments of securities administration of all localities shall conduct
inspection on the status of the listed companies under their respective
jurisdiction in scalping in stocks, and report the inspection results to
the Securities Commission under the State Council. Those state-owned
enterprises and listed companies that go on scalping in stocks upon
promulgation of these Rules, once investigated and verified, their revenue
shall all be confiscated and fines imposed; for enterprises embezzling bank
credit funds for buying and selling stocks, the banks shall suspend additional
new loans, and recover the embezzled loans within the specified time period;
for the leading persons-in-charge and those directly responsible of the
state-owned enterprises shall be given sanctions of removal from their posts
or expulsion by their competent departments; for leading persons-in-charge and
those directly responsible of the listed companies, the China Securities
Supervisory Commission shall confirm and proclaim them to be barred to market
access.
Specific measures for the implementation of the above Rules shall be
promulgated by the competent department under the State Council separately.
1997022319970801The Standing Committee of the National People’s CongressOrder of the President of the People’s Republic of ChinaNo.82Adopted and promulgated at the 24th Meeting of the Standing Committee of the Eighth National People’s Congress on February 23, 1997.President of the People’s Republic of China: Jiang ZeminFebruary 23, 1997epdf/e00206.pdfA1partnership enterprise, establishment, property, affair, disbandment, liquidatione00206Law of the People’s Republic of China on Partnership EnterprisesChapter I General ProvisionsArticle 1 This Law is formulated with a view of standardizing partnership enterprises’ activities, protecting the legitimate rights and interests
of partnership enterprises and their partners, maintaining the social and economic order, and promoting the development of the socialist
market economy.Article 2 “Partnership enterprise” mentioned in this Law refers to a profit-making organization established within the territory of China according
to this Law with their partners associated under a partnership agreement, each making capital contributions, carrying out business
operations, distributing profits, undertaking risks and bearing unlimited and joint liability for the partnership enterprise’s debts.Article 3 A partnership agreement shall be in written form after consultation and agreement among all the partners according to law.Article 4 In concluding a partnership agreement and establishing a partnership enterprise, the parties shall follow the principles of voluntariness,
equality, fairness, honesty and credibility.Article 5 Partnership enterprises shall not use words such as “limited” or “limited liability” in their names.Article 6 In engaging in business activities, partnership enterprises must observe laws and administrative regulations and abide by professional
ethics.Article 7 Property, legitimate rights and interests of partnership enterprises and their partners shall be protected by law.Chapter II Establishment of Partnership EnterprisesArticle 8 The following conditions shall be fulfilled for the establishment of a partnership enterprise:(1)two or more partners each of which to bear unlimited liability according to law;(2)a written partnership agreement;(3)capital contributions actually made by each of partners;(4)the name of the partnership enterprise; and(5)the place of business and conditions necessary for partnership operations.Article 9 A partner shall be a person with full capacity for civil conduct.Article 10 Those prohibited by laws or administrative regulations from engaging in profit-making activities shall not be partners of a partnership
enterprise.Article 11 A partner may make his capital contributions in currency, or by providing material objects, land use rights, intellectual property
rights or other property rights. The capital contributions above-mentioned shall be legal property or property rights owned by the
partner.Capital contributions in other forms than in currency may, if necessary, be appraised and evaluated by all the partners through consultation,
or by a statutory evaluation institution with the authorization of all the partners.A partner may provide personal services as capital contributions after consultation and agreement among all the partners. The evaluation
of contributions in the form of services shall be determined by all the partners through consultation.Article 12 Partners shall perform their duties of capital contribution in terms of the form, amount and time limit of such contribution, as agreed
upon among them in the partnership agreement.Capital contributions actually made by each of the partners according to the partnership agreement shall be regarded as contributing
to the partnership enterprise.Article 13 A partnership agreement shall include the following items:(1)the name of the partnership enterprise and address of its place of business;(2)the purpose of partnership and the business scope of the partnership enterprise;(3)names and residences of each partner;(4)the form, amount and time limit for each partner to make capital contributions;(5)the method of distributing profits and undertaking risks;(6)execution of the partnership enterprise’s affairs;(7)entering into and withdrawal from partnership;(8)disbandment and liquidation of the partnership enterprise; and(9)default liability.A partnership agreement may include the operation term of the partnership enterprise and the means of dispute settlement among partners.Article 14 A partnership agreement takes effect upon the signing and sealing by all the partners of the partnership agreement. Any partner shall
enjoy rights and undertake liabilities according to the partnership agreement.The partnership agreement may be revised or supplemented if all the partners reach agreement through consultation.Article 15 Anyone who applies for registration of the establishment of a partnership enterprise shall submit to the enterprise registration authority
documents such as a written application for registration, a partnership agreement and partners’ identity certificates.Where it is required by laws or administrative regulations that the establishment of the partnership enterprise must be subject to
the examination and approval by the department concerned, the applicant shall submit an approval document in applying for registration
of establishment.Article 16 The enterprise registration authority shall, within 30 days as of the date of receiving the documents of application for registration,
make a decision whether or not to grant registration. It shall grant registration and issue a business licence to the applicants
that meet the requirements stipulated in this Law, and shall not grant registration to those who fail to meet the requirements stipulated
in this Law and give them a written reply explaining the reasons.Article 17 The date of the issuance of the partnership enterprise’s business licence shall be the date of the establishment of a partnership
enterprise.No partner may engage in any profit-making activities in the name of the partnership enterprise that has not yet taken out the business
licence.Article 18 A partnership enterprise intending to establish a branch shall apply for the registration of establishment of the branch to the enterprise
registration authority in the place where the branch is to be located for a business licence.Chapter III Partnership Enterprises’ PropertyArticle 19 During the period in which a partnership enterprise exists, capital contributions made by partners and all proceeds earned on behalf
of the partnership enterprise shall be the property of the partnership enterprise.Property of a partnership enterprise shall be under the unified management and use of all the partners according to this Law.Article 20 Partners shall not claim the partitioning of property of the partnership enterprise before the liquidation of the enterprise unless
otherwise provided for by this Law.If partners privately transfer or dispose of the property of the partnership enterprise before the liquidation of the enterprise,
the partnership enterprise shall not on that ground act against a third party who has acted in good faith and has not informed of
the case.Article 21 During the period in which a partnership enterprise exists, any partner who intends to transfer to a person who is not one of the
partners all or part of his property shares in the partnership enterprise must obtain the consent of all other partners.The transfer of all or part of the shares of property in the partnership enterprise between partners shall be notified to the other
partners.Article 22 Where a partner transfers his share of property according to law, the other partners shall, on identical terms, have priority in acquiring
the share.Article 23 Where those who are not partners, with the consent of all the partners, acquire shares of property in the partnership enterprise according
to law, they shall become the partners of the partnership enterprise upon the modification of the partnership agreement and shall
enjoy rights and undertake liabilities according to the modified partnership agreement.Article 24 Where a partner puts his share of property in the partnership enterprise in pledge, he shall obtain the consent of all other partners.If a partner, without the consent of all other partners, puts his share of property in the partnership enterprise in pledge, his act
shall be void or treated as withdrawal from partnership. If he thereby causes losses to the other partners, he shall bear liability
for compensation according to law.Chapter IV Execution of Partnership Enterprise AffairsArticle 25 Each partner shall have the equal right to execute the partnership enterprise’s affairs. All the partners may jointly execute the
enterprise’s affairs, or, as agreed upon in the partnership agreement or by decision of all the partners, authorize one or more partners
to execute the enterprise’s affairs.The partner executing the partnership enterprise’s affairs shall externally represent the partnership enterprise.Article 26 Where one or more partners has(have) been authorized to execute the partnership enterprise’s affairs as stipulated in the preceding
Article, the other partners shall no longer execute the enterprise’s affairs.Partners not participating in the execution of affairs shall have the right to supervise the partners executing affairs and inspect
the execution.Article 27 Where one or more partners execute(s) the partnership enterprise’s affairs, the partner(s) shall report the execution of affairs,
the business operations and financial condition of the partnership enterprise to the other partners not participating in the execution
of affairs. Proceeds earned in the execution of the partnership enterprise’s affairs shall belong to all the partners and losses
and civil liability incurred therefrom be undertaken by all the partners.Article 28 Partners shall have the right to consult the account book for finding out about the business operations and financial condition of
the partnership enterprise.Where partners make decisions on items relevant to the partnership enterprise according to law or the partnership agreement, unless
otherwise provided for by this Law or by the partnership agreement, the items may, by decision of all the partners, be decided on
a one-person-one-vote basis.Article 29 Where partners separately execute the partnership enterprise’s affairs as agreed upon in the partnership agreement or by decision
of all the partners, any of partners may address oppositions to the other partners on the execution of affairs. If an opposition
is addressed, the execution of the affairs involved shall be suspended. In case of occurrence of a dispute, all the partners may
jointly make a decision thereon.If the partner(s) authorized to execute the partnership enterprise’s affairs fail(s) to act in accordance with the partnership agreement
or the decision of all the partners, the other partners may make a decision to withdraw such authorization.Article 30 Partners shall not individually or in co-operation with others engage in businesses competitive with their partnership enterprise.Partners shall not trade with their partnership enterprise except otherwise agreed upon in the partnership agreement or with the consent
of all the partners.Partners shall not engage in any activity damaging the interests of the partnership enterprise.Article 31 The execution of the following affairs in a partnership enterprise shall be subject to the consent of all the partners:(1)disposing of real estate of the partnership enterprise;(2)changing the name of the partnership enterprise;(3)transferring or disposing of intellectual property rights or other property rights of the partnership enterprise;(4)applying to the enterprise registration authority for registration of changes;(5)offering others a security on behalf of the partnership enterprise;(6)appointing persons who are not partners to act as managerial executives of the partnership enterprise; or(7)dealing with other relevant affairs as agreed upon in the partnership agreement.Article 32 Partners shall share profits and losses of the partnership enterprise in proportion as agreed upon in the partnership agreement. In
absence of stipulations for such proportion in the partnership agreement, each partner shall share profits and losses equally.A partnership agreement shall not stipulate for the distribution of all profits to part of the partners or for the sharing of all
losses among part of the partners.Article 33 During the period in which the partnership enterprise exists, partners may, as agreed upon in the partnership agreement or by decision
of all the partners, increase their capital contributions to the partnership enterprise for the purpose of expanding the business
scale or making up losses.Article 34 The annual or periodic plan detailed for profit distribution and loss sharing in a partnership enterprise shall be decided through
consultation of all the partners or as agreed upon in the partnership agreement.Article 35 Managerial executives appointed by a partnership enterprise shall perform their duties within the scope of power authorized by the
partnership enterprise.Managerial executives appointed by a partnership enterprise who exceed the scope of power authorized by the partnership enterprise
in engaging in business activities, or cause losses to the enterprise intentionally or through gross negligence shall bear the liability
for compensation according to law.Article 36 Partnership enterprises shall establish their enterprise financial and accounting systems in accordance with the provisions of laws
and administrative regulations.Article 37 Partnership enterprises shall perform the duty of paying taxes according to the laws.Chapter V Relations of Partnership Enterprises to Third PartiesArticle 38 No restrictions imposed by a partnership enterprise on rights of a partner to execute the enterprise’s affairs and externally represent
the enterprise may act against a third party who has acted in good faith and has not been informed of the case.Article 39 A partnership enterprise shall pay off its debts first out of all its property. If the property of the partnership enterprise is insufficient
to pay off its due debts, each partner shall bear the unlimited and joint liability for paying off debts.Article 40 Where a partnership enterprise pays its debts out of its property and the debts cannot be paid off in full, each partner shall repay
the difference with his property other than his capital contributions to the partnership enterprise in proportion as stipulated in
the first paragraph of Article 32 of this Law.Any partner who overpays his share of the debts to bear the joint liability shall have the right to claim compensation from the other
partners.Article 41 A creditor of one partner of a partnership enterprise shall not set off the creditor’s rights against his debts owed to the partnership
enterprise.Article 42 Where a partner owes personal debts, his creditor shall not take his place in the partnership enterprise to exercise the partner’s
rights.Article 43 Where a partner’s own property is not sufficient to pay off his personal debts, the partner may pay the debts out of his proceeds
shared in the partnership enterprise. Alternately, the creditor may apply to a people’s court for compulsory execution of the property
shares of the partner in the partnership enterprise to pay off the debts.The other partners shall have priority in acquiring the property shares of the partner.Chapter VI Entering into and Withdrawing from PartnershipsArticle 44 A person intending to enter into partnership shall obtain the consent of all original partners and shall conclude a written entering
agreement according to law.In concluding the entering agreement, the original partners shall inform the new partner of the business operations and financial
condition of the partnership enterprise.Article 45 A partner newly entering into the partnership shall enjoy the equal rights and undertake equal liabilities with the original partners.
If, however, otherwise stipulated in the entering agreement, such stipulations shall prevail.The new partner shall undertake joint liability for the debts of the partnership enterprise incurred before he enters into the partnership.Article 46 Where the partnership agreement stipulates the period of operation of the partnership enterprise, partners may withdraw from the partnership
under any of the following circumstances:(1)Facts resulting in withdrawal from partnership as agreed upon in the partnership agreement occur;(2)The withdrawal from partnership has been approved by all the partners;(3)Facts resulting in difficulties for partners to continue participation in the partnership enterprise occur; or(4)The other partners have seriously broken the duties as agreed upon in the partnership agreement.Article 47 Where the partnership agreement does not stipulate the period of operation of the partnership enterprise, partners may withdraw from
partnership without adversely affecting the execution of affairs in the partnership enterprise and shall inform the other partners
30 days before.Article 48 A partner unilaterally withdrawing from partnership in violation of the provisions of the two preceding articles shall compensate
for losses caused to the other partners.Article 49 A partner shall naturally withdraw from a partnership under any of the following circumstances:(1)Where he dies or is declared dead according to law;(2)Where he is declared a person having no capacity for civil conduct;(3)Where he loses personal capacity for paying debts; or(4)Where all his property shares in the partnership enterprise have been executed by a people’s court.The withdrawal from partnership as stipulated in the preceding paragraph shall take effect on the date the fact occurs.Article 50 A partner may be removed by decision of the other partners through agreement under any of the following circumstances:(1)Where he fails to perform the obligation of capital contributions;(2)Where he intentionally or through gross negligence causes losses to the partnership enterprise;(3)Where he acts improperly in executing the affairs of the partnership enterprise; or(4)Where other facts occur as agreed upon in the partnership agreement.A decision on removal of a partner shall be notified in writing to the removed person. The removal shall take effect in the result
of the withdrawal of the removed person on the date when he receives the notice.The removed person may, within 30 days from the date receiving the notice of removal, bring a lawsuit to a people’s court if he refuses
to accept the decision on his removal.Article 51 Where a partner dies or is declared dead according to law, his successor who is legally enpost_titled to the property shares in the partnership
enterprise shall, as agreed upon in the partnership agreement or with the consent of all the partners, have the status of the partner
as of the date the succession begins.If the legal successor is unwilling to be a partner, the partnership enterprise shall return the property shares he inherits according
to law.If the legal successor is a minor, his guardian may, with the consent of the other partners, exercise rights on his behalf till the
minor comes of age.Article 52 Where a partner withdraws from partnership, the other partners shall clear accounts with him under the financial condition of the
partner enterprise at the time of his withdrawal and shall return his property shares.In the case of unsettled affairs in a partnership enterprise at the time of a withdrawal from the partnership, the clearance of accounts
shall be carried out upon settlement of such affairs.Article 53 The method for returning property shares in the partnership enterprise to a withdrawing partner shall be stipulated in the partnership
agreement or decided by all the partners. The shares may be returned to the withdrawing partner in currency or in kind.Article 54 A withdrawing partner shall bear liability jointly with the other partners for debts of the partnership enterprise incurred before
his withdrawal from partnership.Article 55 Where property of a partnership enterprise is less than its debts at the time of a partner’s withdrawal, the partner shall share the
losses according to the provisions of the first paragraph of Article 32 in this Law.Article 56 Where the registered items of a partnership enterprise change, or need to be renewed, due to entering into or withdrawal from partnership,
a revision of the partnership agreement or for other reasons, the partnership enterprise shall, within 15 days from the date of making
the decision on changes or the facts occur, apply to the enterprise registration authority for such registration.Chapter VII Disbandment and Liquidation of Partnership EnterprisesArticle 57 A partnership enterprise shall be disbanded under any of the following circumstances:(1)The period of operation as agreed upon in the partnership agreement expires and partners are unwilling to continue the operations;(2)The facts resulting in the disbandment as agreed upon in the partnership agreement occur;(3)The disbandment has been decided upon by all the partners;(4)Partners have not formed the statutory number;(5)The purpose of partnership has been achieved or cannot be achieved as agreed upon in the partnership agreement;(6)The business licence has been revoked according to law; or(7)Other reasons stipulated in laws and administrative regulations for the disbandment of the partnership enterprise arise.Article 58 A partnership enterprise shall be liquidated after being disbanded and shall notify its creditors by notice or announcement.Article 59 The liquidators of a partnership enterprise after its disbandment shall be composed of all the partners. If the partners are not all
eligible, one or more partners or a third party may, with the consent of over half of all the partners and within 15 days after the
disbandment of the enterprise, be appointed as the liquidator(s).In case of failure to appoint the liquidators within 15 days, partners or other interested persons may apply to a people’s court for
the appointment of liquidators.Article 60 Liquidators shall execute the following affairs during liquidation:(1)checking up on the property of the partnership enterprise, and separately formulating a balance sheet and a detailed inventory of
property;(2)disposing of the unsettled affairs relevant to the liquidation of the partnership enterprise;(3)paying off taxes owed by the enterprise;(4)clearing up claims and debts;(5)disposing of, after paying off the debts of the partnership enterprise, its remaining property; and(6)participating in civil lawsuits on behalf of the partnership enterprise.Article 61 The property of a partnership enterprise shall, after the payment of liquidation expenses, be applied to make repayment in the following
order:(1)wages of employees and labour
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