Regulation on Individual Industrial and Commercial Households

· Document Number：Order No. 666 of the State Council

· Area of Law： Sole Proprietorships

· Level of Authority： Administrative Regulations

· Date issued：02-06-2016

· Effective Date：11-01-2011

· Status： Effective

· Issuing Authority： State Council

Regulation on Individual Industrial and Commercial Households
(Promulgated by Order No. 596 of the State Council of the People's Republic of China on April 16, 2011; revised for the first time in accordance with the Decision of the State Council on Abolishing and Amending Some Administrative Regulations on February 19, 2014; and revised for the second time in accordance with the Decision of the State Council on Amending Some Administrative on February 6, 2016)
Article 1 This Regulation is formulated to protect the legitimate rights and interests of individual industrial and commercial households, encourage, support and guide their healthy development, strengthen the supervision and administration of them, and give play to their important role in promoting economic and social development and creating jobs.
Article 2 Individual industrial and commercial households shall be citizens with business operation capacity engaging in industrial and commercial business operations after registration with the industrial and commercial administrative departments in accordance with the provisions of this Regulation.
Both individual operation and household operation shall be allowed for individual industrial and commercial households.
The legitimate rights and interests of individual industrial and commercial households shall be protected by law, and no entity or individual shall infringe upon them.
Article 3 The industrial and commercial administrative departments of counties, autonomous counties, cities not divided into districts and municipal districts shall be the registration organs of individual industrial and commercial households (hereinafter referred to as the “registration organs”). Registration organs may authorize the industrial and commercial administrative offices under them to handle the registration of individual industrial and commercial households pursuant to the provisions of the industrial and commercial administrative department of the State Council.
Article 4 The state shall apply the principles of equal market access and fair treatment to individual industrial and commercial households.
If the scope of business stated in an application for registration of an individual industrial and commercial household does not include any sector prohibited by a law or administrative regulation, the registration organ shall grant the registration according to law.
Article 5 The industrial and commercial administrative departments and other relevant departments of the people's governments at or above the county level shall supervise and administer individual industrial and commercial households according to law.
In business operation, individual industrial and commercial households shall abide by laws and regulations, observe social morality and commercial ethics, act in good faith, and accept the supervision by the government and the relevant departments thereof.
Article 6 The local people's governments at all levels and the relevant departments of the people's governments at and above the county level shall take measures to provide support, convenience, advice and other services for individual industrial and commercial households in respect of business premises, business startup, professional skill training, professional skill certification, technical innovation, social insurance, etc.
Article 7 Legally formed associations of self-employment shall, under the direction of the industrial and commercial administrative departments, provide services for individual industrial and commercial households, protect the legitimate rights and interests of individual industrial and commercial households, and guide them on good faith and self-discipline.
Individual industrial and commercial households may join associations of self-employment on their free will.
Article 8 An applicant for registration as an individual industrial and commercial household shall apply for registration to the registration organ at the locality of its business premises. The applicant shall submit a registration application form, an identity certificate and a certificate on business premises.
The registration items of an individual industrial and commercial household shall include the name and domicile of the operator, form of organization, scope of business and business premises. If the individual industrial and commercial household has a trade name, the trade name shall be registered.
Article 9 The registration organ shall proceed according to the following provisions after examining the application materials:
1. If the application materials are complete and in the statutory formats, the registration organ shall grant the registration on the spot; or if the application materials are incomplete or not in the statutory formats, the registration organ shall notify on the spot the applicant of all necessary supplements and corrections;
2. The registration organ shall make a substantive verification of the application materials according to law if necessary, and within 15 days after accepting the application, make a decision on granting the registration or not; or
3. If the registration conditions for an individual industrial and commercial household are not met, the registration organ shall not grant the registration, and shall notify the applicant in writing of the decision and reasons as well as the applicant's right to apply for administrative reconsideration or lodge an administrative lawsuit.
If registration is granted, the registration organ shall issue a business license to the applicant within 10 days after the date of registration.
The state promotes e-business license. E-business license shall have the same legal effect as a paper one
Article 10 Where any information under the registration items changes, an individual industrial and commercial household shall apply to the registration organ for modification registration.
If the operator of an individual industrial and commercial household changes, the registration of the individual industrial and commercial household shall be cancelled, and the new operator shall handle the registration formalities anew. If the operator of an individual industrial and commercial household in the manner of household operation changes from one family member to another family member, the modification registration formalities shall be handled pursuant to the preceding paragraph.
Article 11 Where the information to be registered or the registered information to be modified is subject to administrative licensing according to law, a licensing certificate shall be provided to the registration organ.
Article 12 Where an individual industrial and commercial household no longer engages in any business operation, it shall cancel its registration with the registration organ.
Article 13 An individual industrial and commercial household shall, between January 1 and June 30 of each year, submit its annual report to the registration authority.
Individual industrial and commercial households shall be responsible for the truth and legality of their annual reports.
The measures for the annual reports of individual industrial and commercial households shall be developed by the administrative department for industry and commerce under the State Council.
Article 14 Registration authorities shall enter individual industrial and commercial households failing to fulfill as legally required the annual reporting obligation into the list of individual industrial and commercial households with abnormal operations, and make it available to the public through the enterprise credit information publication system.
Article 15 Registration authorities may not charge any fees for receiving the annual reports of individual industrial and commercial households and conducting spot checks.
Article 16 The registration organs and the relevant administrative organs shall, at the government websites and their offices, publish the conditions, procedures, time limits, a checklist of all materials to be submitted, fee rates and other relevant matters for an individual industrial and commercial household to apply for registration and administrative licensing, in a way easy for public access.
The registration organs and the relevant administrative organs shall provide guidance and inquiry services for applicants for administrative licensing and registration.
Article 17 An individual industrial and commercial household shall handle tax registration according to law after obtaining a business license.
Where any tax registration matter changes, an individual industrial and commercial household shall modify or cancel its tax registration according to law.
Article 18 No department or entity shall raise funds from or apportion expenses to individual industrial and commercial households, or force individual industrial and commercial households to provide support or accept and pay for any service.
Article 19 The local people's governments at all levels shall bring the production and trading places needed by individual industrial and commercial households into the urban and rural construction planning for overall arrangements.
No entity or individual shall encroach upon the business premises used by individual industrial and commercial households with approval.
Article 20 An individual industrial and commercial household may open an account at a bank or any other financial institution and apply for loans on the basis of its business license and tax registration certificate.
Financial institutions shall improve their financial services, and provide conveniences for individual industrial and commercial households to apply for loans.
Article 21 An individual industrial and commercial household may hire employees as needed by its business operations.
An individual industrial and commercial household shall sign employment contracts with their employees, and perform its obligations prescribed by laws, administrative regulations and contracts, and shall not infringe upon the legitimate rights and interests of its employees.
Article 22 Where an individual industrial and commercial household submits false materials for registration, or forges, alters, leases, lends or transfers its business license, the registration organ shall order it to make a correction, impose a fine of not more than 4,000 yuan on it; and, if the circumstances are serious, cancel its registration or revoke its business license.
Article 23 Where an individual industrial and commercial household fails to apply for modification registration after any registered information changes, the registration organ shall order it to make a correction, impose a fine of not more than 1,500 yuan on it; and, if the circumstances are serious, revoke its business license.
Where any individual industrial and commercial household fails to handle the tax registration, the tax authority shall order it to make a correction within a certain time limit; and if it fails to do so, the tax authority may request the registration organ to revoke its business license.
Article 24 Where the relevant administrative organ legally revokes or cancels an administrative license of an individual industrial and commercial household or an administrative license of an individual industrial and commercial household expires during the term of validity of the business license of the individual industrial and commercial household, the individual industrial and commercial household shall notify the registration organ within 5 workdays after the revocation, cancellation or expiration, and the registration organ shall cancel its registration, revoke its business license or order it to modify its registration.
Article 25 The industrial and commercial administrative departments and other relevant departments shall strengthen the exchange of information on the administration of individual industrial and commercial households, and gradually set up an individual industrial and commercial household management information system.
Article 26 Where any functionary of an industrial and commercial administrative department or any other relevant department abuses powers, engages in malpractice for personal gains, takes bribes or infringes upon the legitimate rights and interests of any individual industrial and commercial household, he/she shall be subject to a disciplinary action according to law; and if a crime is constituted, be subject to criminal liability.
Article 27 Chinese Citizens who are permanent residents of the Hong Kong Special Administrative Region or the Macao Special Administrative Region and residents in Taiwan region may apply for registration as an individual industrial and commercial household pursuant to the relevant provisions of the state.
Article 28 Where an individual industrial and commercial household applies for transformation into a form of enterprise, if it meets the statutory conditions, the registration organ and the relevant administrative organs shall provide conveniences for it.
Article 29 The measures for the administration of venders without fixed business premises shall be made by the people's government of a province, autonomous region or municipality directly under the Central Government in light of the local actualities.
Article 30 This Regulation shall come into force on November 1, 2011. The Interim Regulation on the Administration of Urban and Rural Individual Industrial and Commercial Households issued by the State Council on August 5, 1987 shall be abolished simultaneously.