Implementing Rules of the Law of People's Republic of China on Sino-Foreign Cooperative Joint Ventures (Revised in 2017)

Order of the State Council of the People's Republic of China No.676

March 1, 2017

(Adopted by the State Council on August 7, 1995; promulgated according to the Order of the Ministry of Foreign Trade and Economic Cooperation No. 6 on September 4, 1995; revised for the first time according to Decision of the State Council on Repealing and Revising Certain Administrative Regulations on February 19, 2014; revised for the second time according to the on March 1, 2017)

Chapter I General Provisions

Article 1 These Implementing Rules are formulated in accordance with the Law of the People's Republic of China on Sino-Foreign Cooperative Joint Ventures.

Article 2 The establishment of Sino-foreign co-operative joint ventures (hereafter referred to as "Co-operative Joint Ventures") in China must conform to the development and industrial policies of the State and comply with the provisions concerning the directing of foreign investment.

Article 3 Co-operative Joint Ventures shall, within the scope of the approved agreements, contracts or articles of association of such Co-operative Joint Ventures, develop their business and engage in operation and management activities autonomously and in accordance with law and shall not be subject to interference by any organizations or individuals.

Article 4 Co-operative Joint Ventures shall include Co-operative Joint Ventures that obtain the status of a Chinese legal person in accordance with law and Co-operative Joint Ventures without the status of a legal person.
Those Co-operative Joint Ventures without the status of a legal person for which Chapter Nine hereof contains special provisions shall be subject to such provisions.

Article 5 The department in charge of a Co-operative Joint Ventures shall be the department in charge of the Chinese party to the Co-operative Joint Ventures. If a Co-operative Joint Ventures has two or more Chinese parties, the department in charge of the Co-operative Joint Ventures shall be determined by the examination and approval authority in conjunction with the relevant departments through consultations, unless laws and administrative regulations provide otherwise.
The department in charge of a Co-operative Joint Ventures shall coordinate and assist in relevant matters concerning the Co-operative Joint Ventures in accordance with law.

Chapter II Establishment of A Cooperative Joint Ventures

Article 6 The establishment of a Co-operative Joint Ventures shall be examined and approved by the Ministry of Foreign Trade and Economic Cooperation or by departments and local People's Government authorized by the State Council.
The establishment of a Co-operative Joint Ventures of the following kinds shall be examined and approved by a department or local People's Government authorized by the State Council:
1. where the total amount of investment does not exceed the investment limit specified by the State Council for examination and approval by a department or local People's Government authorized by the State Council;
2. where the funds are raised by the parties themselves and the State is not required to maintain a balance of construction or production conditions;
3. where the export of products does not require export quotas or licenses from relevant State department in charge or, although such quotas or licenses are required, consent has been obtained from the relevant State department in charge prior to submission of the project proposal; and
4. where other circumstances under which laws or administrative regulations provide for examination and approval by a department or local People's Government authorized by the State Council.

Article 7 To establish a Co-operative Joint Ventures, the Chinese party shall submit the following documents to the examination and approval authority
1. a project proposal on the establishment of the Co-operative Joint Ventures, accompanied by documents containing the approval granted by the department in charge upon examination;
2. a feasibility study jointly prepared by the parties, accompanied by documents containing the approval granted by the department in charge upon examination;
3. the Agreement, Contract and or the Articles of Association of the Co-operative Joint Ventures signed by the joint ventures parties' legal representatives or representatives authorized thereby;
4. the business license or proof of registration and a certificate of creditworthiness of each party, and valid credentials of each party's legal representative; if the foreign party is a natural person, valid documentary proof of his identity, education, work experience and creditworthiness shall be provided;
5. a list of the names of the persons to hold the positions of chairman of the board, vice chairman of the board and director of the Co-operative Joint Ventures, or the positions of head, deputy head and member of the joint management committee of the Co-operative Joint Ventures, as determined by the parties through consultations; and
6. such other documents as the examination and approval authority may require to be submitted.
All documents specified in the preceding paragraph, except the documents to be provided by the foreign party as specified in item (4), must be submitted in Chinese. The documents specified in items (2), (3) and (5) may additionally be submitted in a foreign language agreed upon by the parties.
The examination and approval authority shall decide whether or not to approve an application within 45 days of receiving the prescribed documents. If the examination and approval authority considers that the documents submitted are incomplete or not in order, it shall have the right to require the parties to provide the missing documents or to correct the items that are not in order within a prescribed period.

Article 8 Where the establishment of a Co-operative Joint Ventures was approved by the Ministry of Foreign Trade and Economic Cooperation or a department authorized by the State Council, the Ministry of Foreign Trade and Economic Cooperation shall issue an approval certificate.
Where the establishment of a Co-operative Joint Ventures was approved by a local People's Government authorized by the State Council, the relevant local People's Government shall issue an approval certificate and, within 30 days of the date of approval, submit the relevant approval documents to the Ministry of Foreign Trade and Economic Cooperation for the record.
Co-operative Joint Ventures the establishment of which has been approved shall apply for registration to, and obtain a business license from, the authority for the administration for industry and commerce in accordance with law.

Article 9 Co-operative Joint Ventures of any of the following kinds shall not be approved
1. where the sovereignty of the State or the public interests are harmed;
2. where national security is jeopardized;
3. where environmental pollution is caused; or
4. other circumstances where laws, administrative regulations or the State's industrial policy is violated.

Article 10 For the purposes of these Implementing Rules, the term "Co-operative Joint Ventures Agreement" shall mean a written document concluded after the parties have reached a consensus on the principles for and main issues concerning the establishment of a Co-operative Joint Ventures.
For the purposes of these Implementing Rules, the term "Co-operative Joint Ventures Contract" shall refer to a written document concluded after the parties have reached a consensus on their mutual rights and obligations in establishing a Co-operative Joint Ventures.
For the purposes of these Implementing Rules, the term "Articles of Association of a Co-operative Joint Ventures" shall refer to a written document providing for the organizational principles, operation and management methods, etc. of a Co-operative Joint Ventures that is formulated in accordance with the provisions of the Co-operative Joint Ventures Contract and unanimously agreed to by each party.
In the case of discrepancy between the contents of the Co-operative Joint Ventures Agreement or the Articles of Association of a Co-operative Joint Ventures and the contents of the Co-operative Joint Ventures Contract, the Co-operative Joint Ventures Contract shall prevail.
The parties may not be required to enter into a Co-operative Joint Ventures Agreement.

Article 11 The Agreement, Contract and or the Articles of Association of a Co-operative Joint Ventures shall become effective as of the date of issuance of the approval certificate by the examination and approval authority. Major amendments to the Agreement, Contract or the Articles of Association of a Co-operative Joint Ventures that are made during the term of cooperation shall be subject to approval by the examination and approval authority.

Article 12 A Co-operative Joint Ventures Contract shall specify the following particulars
1. the name, place of registration and domicile of each joint ventures party and the name, position and nationality of the legal representative of each joint ventures party (or where the foreign joint ventures party is a natural person, the name, nationality and domicile of the foreign joint ventures party);
2. the name, domicile and scope of business of the Co-operative Joint Ventures;
3. the total amount of investment and the registered capital of the Co-operative Joint Ventures and the method by and time limit in which each joint ventures party should make its investment or provide its cooperation conditions;
4. assignment of the investment made or cooperation conditions provided by each joint ventures party;
5. the distribution of revenue or products and the sharing of risks or losses between the joint ventures parties;
6. the formation of the board of directors or joint management committee of the Co-operative Joint Ventures, the distribution of seats on the board of directors or joint management committee, and the duties and methods for appointment and dismissal of the general manager and other senior management personnel;
7. the main production equipment and production technology to be used, and the sources thereof;
8. arrangements for the sale of products inside and outside the People's Republic of China;
9. arrangements for the revenue and expenditure of foreign exchange by the Co-operative Joint Ventures;
10. the term, dissolution and liquidation of the Co-operative Joint Ventures;
11. other obligations of the joint ventures parties and liability for breach of contract;
12. the principles for the handling of financial, accounting and auditing matters;
13. the handling of disputes between the joint ventures parties; and
14. the procedure for amendment of the Co-operative Joint Ventures Contract.

Article 13 The Articles of Association of a Co-operative Joint Ventures shall specify the following particulars
1. the name and domicile of the Co-operative Joint Ventures;
2. the scope of business and term of the Co-operative Joint Ventures;
3. the name, place of registration and domicile of each joint ventures party and the name, position and nationality of the legal representative of each joint ventures party (or where the foreign joint ventures party is a natural person, the name, nationality and domicile of the foreign joint ventures party);
4. the total amount of investment and the registered capital of the co-operative joint ventures, and the method of and time limit for making contribution or investment or providing cooperation conditions by each joint ventures party;
5. the distribution of revenue or products and the sharing of risks or losses between the joint ventures parties;
6. the formation, powers, functions and rules of discussions of the board of directors or joint management committee of the Co-operative Joint Ventures, the terms of office of members of the board of directors or joint management committee, and the duties of the chairman and vice chairman of the board or the head and deputy head of the joint management committee;
7. the establishment, powers, functions and working procedures of the operation and management organization, and the duties and methods for appointment and dismissal of the general manager and other senior management personnel;
8. provisions concerning labour management issues such as the employment, training, labour contracts, wages, social insurance, welfare benefits, occupational safety and health, etc. of staff and workers;
9. the financial, accounting and auditing systems of the Co-operative Joint Ventures;
10. methods for the dissolution and liquidation of the Co-operative Joint Ventures; and
11. the procedure for amendment of the Articles of Association of the Co-operative Joint Ventures.

Chapter III Form of Organization and Registered Capital

Article 14 A Co-operative Joint Ventures that obtains the status of a Chinese legal person in accordance with law shall be a limited liability company. The parties shall be liable to the Co-operative Joint Ventures to the extent of their respective investments made or cooperation conditions provided, unless the Co-operative Joint Ventures Contract provides otherwise.
A Co-operative Joint Ventures shall be liable for its debts with all of its assets.

Article 15 The term "total amount of investment of a Co-operative Joint Ventures" shall refer to the total amount of capital needed for injection according to the scale of production and business provided for in the Contract and Articles of Association of the Co-operative Joint Ventures.

Article 16 The term "registered capital of a Co-operative Joint Ventures" shall refer to the sum of the capital contributions subscribed by each party as registered with the Administration for Industry and Commerce authorities for the purpose of establishment of the Co-operative Joint Ventures. The registered capital shall be denominated in Renminbi, and may also be denominated in a freely convertible foreign currency agreed upon by the parties.
The registered capital of a Co-operative Joint Ventures may not be reduced during the term of cooperation. However, if such reduction is truly necessary as a result of changes in the total amount of investment and the scale of production and business, approval must be obtained from the examination and approval authority.

Chapter IV Investments and Cooperation Conditions

Article 17 The parties shall invest in or provide cooperation conditions to the Co-operative Joint Ventures in accordance with relevant laws and administrative regulations and the Co-operative Joint Ventures Contract.

Article 18 The investments made in or cooperation conditions provided to the Co-operative Joint Ventures by the parties may be able form of in currency, in kind or in the form of property rights such as industrial property, proprietary technology, leaseholds, etc.
Where the investment made or cooperation conditions provided by the Chinese party are State-owned assets, asset appraisal shall be carried out according to relevant laws and administrative regulations.
The foreign party's investment in a Co-operative Joint Ventures that has obtained the status of a Chinese legal person in accordance with law shall generally not be less than 25 percent of the registered capital of the Co-operative Joint Ventures. Specific requirements for the investments made or cooperation conditions provided to a Co-operative Joint Ventures without the status of a legal person by the parties thereto shall be prescribed by the Ministry of Foreign Trade and Economic Cooperation.

Article 19 The parties shall use their self-owned property or property rights as investments or cooperation conditions. Mortgage or other forms of security may not be created over such investments or cooperation conditions.

Article 20 The time limit for the making of investments or provision of cooperation conditions to a Co-operative Joint Ventures shall be stipulated by the parties in the Co-operative Joint Ventures Contract on the basis of the production and operation requirements of the Co-operative Joint Ventures and in accordance with relevant laws and administrative regulations.
Where the parties fail to pay up their investments or provide their cooperation conditions in accordance with the Co-operative Joint Ventures Contract, the authority for the administration of industry and commerce shall set a time limit for performance of such obligation. Where the parties fail to perform such obligation within such time limit, the examination and approval authority shall revoke the approval certificate of the Co-operative Joint Ventures and the authority for the administration for industry and commerce authorities shall revoke its business license and make a public announcement.

Article 21 A party that fails to pay up its investment or provide its cooperation conditions in accordance with the Co-operative Joint Ventures Contract shall be liable for breach of contract towards the party (parties) that has (have) paid up his (their) investment(s) or provided his (their) cooperation conditions in accordance with the Co-operative Joint Ventures Contract.

Article 22 After the parties have paid up their investments or provided their cooperation conditions, an accountant registered in China shall verify the same and issue a capital verification report, whereupon the Co-operative Joint Ventures shall issue an investment certificate to each party. An investment certificate shall specify the following particulars:
1. the name of the Co-operative Joint Ventures;
2. the date of establishment of the Co-operative Joint Ventures;
3. the names of the parties;
4. the contents of the investments made or cooperation conditions provided by the parties;
5. the date on which each party made its investment or provided its cooperation conditions; and
6. the certificate number and the date of issuance of the investment certificate.
Copies of the investment certificates shall be sent to the examination and approval authority and the Administration for Industry and Commerce authorities.

Article 23 Assignment of all or part of rights in a Co-operative Joint Ventures Contract between joint ventures parties, or one joint ventures party to a third party other than the other joint ventures party (parties) shall be subject to the written consent of the other joint ventures party (parties) and the approval of the examination and approval authority. The examination and approval authority shall decide whether or not to grant approval within 30 days of receiving the documents concerning the assignment.

Chapter V Organizational Structure

Article 24 A Co-operative Joint Ventures shall have a board of directors or a joint management committee. The board of directors or joint management committee shall be the authority of the Co-operative Joint Ventures, and shall decide upon important issues of the Co-operative Joint Ventures in accordance with the provisions of the Articles of Association of the Co-operative Joint Ventures.

Article 25 A board of directors or joint management committee shall have at least three members. The distribution of seats on the board of directors or joint management committee shall be determined by the Chinese and foreign parties following consultations by reference to their investments made or cooperation conditions provided.

Article 26 The members of the board of directors or joint management committee shall be appointed or replaced by the parties themselves. Measures for the determination of the persons to serve as chairman and vice chairman of the board or head and deputy head of the joint management committee shall be provided for in the Articles of Association of the Co-operative Joint Ventures. If the position of chairman of the board of directors or head of the joint management committee is assumed by a person from the Chinese party or foreign party, the position of vice chairman or deputy head shall be assumed by a person from the other party.

Article 27 The term of office of directors or committee members shall be provided for in the Articles of Association of the Co-operative Joint Ventures; however, each term may not exceed three years. Upon the expiration of their terms, directors or committee members may serve consecutive terms if reappointed by the party that originally appointed them.

Article 28 Meetings of the board of directors or joint management committee shall be held at least once a year, and be convened and presided over by the chairman of the board or the head of the committee. Where the chairman of the board or the head of the committee is unable to perform his duties due to special reasons, he shall designate the vice chairman of the board or the deputy head of the committee or another director or committee member to convene and preside over the meeting. The convention of a meeting of the board of directors or the joint management committee may be proposed by one-third or more of the directors or committee members.
Meeting of the board of directors or the joint management committee may be held only if two-thirds or more of the directors or committee members are present. A director or committee member who is unable to attend a meeting of the board of directors or the joint management committee shall appoint another person in writing to attend and vote at the meeting as his proxy. Resolutions of a meeting of the board of directors or the joint management committee must be adopted by more than half of all the directors or committee members. If a director or committee member fails both to attend a meeting of the board of directors or the joint management committee without legitimate reason and to appoint another person to attend the meeting as his proxy, he shall be deemed to have attended such meeting and to have abstained from voting.
All directors or committee members shall be notified 10 days prior to the date on which a meeting of the board of directors or the joint management committee is to be held.
Meetings of the board of directors or the joint management committee may also adopt resolutions by means of various forms of communications.

Article 29 Resolutions involving any of the following issues may be adopted only with the unanimous affirmative vote of the directors or committee members attending the meeting of the board of directors or the joint management committee:
1. amendments to the Articles of Association of the Co-operative Joint Ventures;
2. increase or reduction in the registered capital of the Co-operative Joint Ventures;
3. dissolution of the Co-operative Joint Ventures;
4. mortgage of assets of the Co-operative Joint Ventures;
5. merger, division or change in the form of organization of the Co-operative Joint Ventures; and
6. other issues in respect of which resolutions may only be adopted unanimously at a meeting of the board of directors or the joint management committee, as agreed upon by the parties.

Article 30 The methods of discussions and voting procedures of the board of directors or joint management committee, except for those provided for in these Implementing Rules, shall be provided for in the Articles of Association of the Co-operative Joint Ventures.

Article 31 The chairman of the board or head of the committee shall be the legal representative of the Co-operative Joint Ventures. If the chairman of the board or the head of the committee is unable to perform his duties due to special reasons, he shall authorize the vice chairman of the board or the deputy head of the committee, another director or committee member to act on behalf of the Co-operative Joint Ventures outside the Co-operative Joint Ventures.

Article 32 A Co-operative Joint Ventures shall have one general manager who shall be responsible for the day-to-day operation and management of the Co-operative Joint Ventures and report to the board of directors or the joint management committee.
The general manager of a Co-operative Joint Ventures shall be appointed and dismissed by the board of directors or the joint management committee.

Article 33 The positions of general manager and other senior management personnel may be held by Chinese citizens, and may also be held by foreign citizens.
Upon appointment by the board of directors or the joint management committee, a director or committee member may concurrently hold the position of general manager or another senior management position in the Co-operative Joint Ventures.

Article 34 If the general manager or other senior management personnel is incompetent, practices graft or commits serious dereliction of duty, he may be dismissed upon the adoption of a pertinent resolution by the board of directors or the joint management committee. If such incompetence, graft or dereliction of duty causes the Co-operative Joint Ventures to suffer loss, he shall be liable in accordance with law.

Article 35 Where, following its establishment, a Co-operative Joint Ventures wishes to entrust a third party with operation and management, such entrustment shall be subject to the unanimous consent of the board of directors or the joint management committee and require the entry into a contract for entrustment of operation and management with the entrusted party.
The Co-operative Joint Ventures shall submit documents such as the resolution of the board of directors or the joint management committee, the contract for entrustment of operation and management and proof of the creditworthiness of the entrusted party together to the examination and approval authority for approval. The examination and approval authority shall decide whether or not to grant approval within 30 days of receiving such relevant documents.

Chapter VI Purchase of Supplies and Sale of Products

Article 36 A Co-operative Joint Ventures shall formulate its own production and business plans in accordance with the approved business scope and scale of production and business.
Governmental authorities may not arbitrarily order Co-operative Joint Ventures to implement production and business plans determined by governmental authorities.

Article 37 A Co-operative Joint Ventures may decide on its own to purchase machinery, equipment, raw materials, fuel, parts, components, accessories, elements, means of transportation, office articles, etc. for its own use ("Supplies") inside or outside the People's Republic of China.

Article 38 The State encourages Co-operative Joint Ventures to sell their products on the international market. Co-operative Joint Ventures may sell their products on the international market by themselves, and may also entrust sales organizations abroad or Chinese foreign trade companies as agents or distributors to sell this products.
The prices of products sold by Co-operative Joint Ventures shall be determined by the Co-operative Joint Ventures themselves in accordance with law.

Article 39 Machinery, equipment, components and other materials that are imported by the foreign party as investment, and machinery, equipment, components and other materials required for production and operation that are imported by the Co-operative Joint Ventures with funds within its total amount of investment, shall be exempt from import duty and turnover taxes at the import stage. If the above-mentioned duty- and tax-free imported Supplies are re-sold in the People's Republic of China or used for the purpose of domestic sale upon approval, duty and tax shall be paid or made up in accordance with law.

Article 40 Co-operative Joint Ventures may not export products at prices obviously lower than reasonable prices for similar products on the international market, and may not import Supplies at prices higher than prices for similar products on the international market.

Article 41 Co-operative Joint Ventures shall sell their products in accordance with the approved Co-operative Joint Ventures Contracts.

Article 42 Co-operative Joint Ventures shall, in accordance with relevant State regulations, carry out procedures for application for and obtaining of licenses or quotas for those of their imports or exports that are merchandise subject to import or export licensing or quotas.

Chapter VII Distribution of Revenue and Recovery of Investment

Article 43 The Chinese and foreign parties may distribute revenue by means of distribution of profits, distribution of products or such other means as they may agree upon.
Where the method of product distribution or another method is used for distribution of revenue, the amount of tax payable shall be calculated in accordance with the relevant provisions of the tax laws.

Article 44 Where the Chinese and foreign parties stipulate in the Co-operative Joint Ventures Contract that the Chinese Party shall take title to all fixed assets of the Co-operative Joint Ventures upon expiration of the term of cooperation without compensation, the foreign party may reach an agreement in the Co-operative Joint Ventures Contract on an increase in the proportion of the revenue to be distributed to the foreign party on the basis of distribution according to the investment made or cooperation conditions provided to recover its investment.
If the foreign party first recovers its investment during the joint ventures term pursuant to the preceding paragraph, the Chinese and foreign parties shall be liable for the debts of the Co-operative Joint Ventures in accordance with the relevant laws and the Co-operative Joint Ventures Contract.

Article 45 The foreign party may not first recover its investment before the losses of the Co-operative Joint Ventures have been made up.

Article 46 A Co-operative Joint Ventures shall, in accordance with the relevant regulations of the State, engage an accountant registered in China to audit and verify the accounts. The parties may jointly or individually engage an accountant registered in China to audit the accounts; the expenses necessary for such audit shall be borne by the engaging parties or party.

Chapter VIII Term and Dissolution

Article 47 The term of a Co-operative Joint Ventures shall be determined through consultations between the Chinese and foreign parties and be specified in the Co-operative Joint Ventures Contract.
Where, following consultations, the parties agree to request an extension of the term of cooperation upon expiration thereof, an application shall be submitted to the examination and approval authority 180 days prior to expiration of the term. Such application shall describe the implementation of the original Co-operative Joint Ventures Contract and the reason for extension of the term of cooperation, and shall be accompanied by the agreement reached between the parties on issues such as each party's rights and obligations etc. during the extension. The examination and approval authority shall decide whether or not to grant approval within 30 days of receiving such application.
Where an extension of the term of cooperation is approved, the Co-operative Joint Ventures shall carry out the procedures for change of registration with the Administration for Industry and Commerce authorities on the strength of the approval document. The extension of the term shall be counted from the first day after the expiration of the term.
If the Co-operative Joint Ventures Contract agrees that the foreign party shall recover its investment first, and such recovery of investment has been completed, then the term of the Co-operative Joint Ventures shall no longer be extended upon expiration thereof. However, where the foreign party increases its investment and all parties reach an agreement following consultations, an application may be submitted to the examination and approval authority for an extension of the term of cooperation in accordance with the second paragraph hereof.

Article 48 A Co-operative Joint Ventures shall be dissolved:
1. upon expiration of the term of cooperation;
2. where the Co-operative Joint Ventures incurs serious deficits, or suffers serious loss as a result of force majeure, making it impossible to continue to operate;
3. where one, several or all of the Chinese and foreign parties fail to perform their obligations under the Contract and Articles of Association of the Co-operative Joint Ventures, making the Co-operative Joint Ventures impossible to continue to operate;
4. if another cause for dissolution as provided for in the Contract and Articles of Association of the Co-operative Joint Ventures has arisen; or
5. if the Co-operative Joint Ventures is ordered closed in accordance with law as a result of violates of laws or administrative regulations.
If circumstances as mentioned in item (2) or (4) of the preceding paragraph arise, the board of directors or joint management committee shall make a decision and submit the same to the examination and approval authority for approval. If circumstances as mentioned in item (3) of the preceding paragraph arise, the Chinese and/or foreign party or parties that fail to perform their obligations under the Contract and Articles of Association of the Co-operative Joint Ventures shall be liable to compensate for the losses suffered as a result thereof by the party or parties that have been performing the Contract, and the party or parties that have been performing the Contract shall have the right to apply to the examination and approval authority for dissolution of the Co-operative Joint Ventures.

Article 49 Matters concerning the liquidation of Co-operative Joint Ventures shall be handled in accordance with the relevant laws and administrative regulations of the State as well as the Contracts and Articles of Association of the Co-operative Joint Ventures.

Chapter IX Special Provisions for Cooperative Joint Ventures without the Status of A Legal Person

Article 50 Co-operative Joint Ventures without the status of a legal person and the parties thereto shall bear civil liability in accordance with the relevant provisions of China's civil law.

Article 51 Co-operative Joint Ventures without the status of a legal person shall register the investments made or cooperation conditions provided by the parties with the Administration for Industry and Commerce authorities.

Article 52 The investments made or cooperation conditions provided by the parties to a Co-operative Joint Ventures without the status of a legal person shall be owned by the parties individually. The same may also be owned in common, or partly owned individually and partly owned in common, if the parties so agree. Property accumulated by the Co-operative Joint Ventures in the course of business shall be owned in common by the parties.
The investments made or cooperation conditions provided by the parties to a Co-operative Joint Ventures without the status of a legal person shall be administered and used by the Co-operative Joint Ventures in a unified manner and may not be disposed of by any party without the consent of the other party or parties.

Article 53 Co-operative Joint Ventures without the status of a legal person shall establish joint management committees. A joint management committee shall be formed by the representatives delegated by the parties and shall jointly manage the Co-operative Joint Ventures on behalf of the parties.
The joint management committee shall decide upon all important issues of the Co-operative Joint Ventures.

Article 54 Co-operative Joint Ventures without the status of a legal person shall keep unified account books at the places where they are located. The parties to such Co-operative Joint Ventures shall additionally keep their own account books.

Chapter X Supplementary Provisions

Article 55 The conclusion, validity, interpretation and performance of, and the settlement of disputes in connection with, Co-operative Joint Ventures Contracts shall be governed by the laws of China.

Article 56 Matters not covered herein, including the administration of financial, accounting, auditing, foreign exchange, taxation, labor affairs and the labor unions of Cooperative Joint Ventures, etc. shall be governed by relevant laws and administrative regulations.

Article 57 Cooperative Joint Ventures established by companies, enterprises and other economic organizations or individuals from Hong Kong, Macao and Taiwan and by Chinese citizens residing abroad shall be handled by reference to these Implementing Rules.

Article 58 These Implementing Rules shall be effective as of the date of promulgation.