Company Compliance and Regulatory
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In this article we’ll give a brief introduction to Annual Report to AIC,which is one of regulations required by authorities.
Company, Unincorporated Business Entity , Partnership, Sole proprietorship, Branch office, Individual industrial and commercial household, Farmer Professional Cooperatives (here referred to as "commercial subjects"), registered in China and with the anniversary of its establishment ,shall shall submit the annual report to AIC.
Usually, the commercial subjects shall submit the annual report for the previous year within two months ( the rolling annual report period) since the anniversary date of its establishment. The commercial subject shall actively submit the annual report for the previous natural year.According to the“Interim Regulations for the Publicity of Corporate Information”, each year from January 1 to June 30, all FIEs should submit an annual report for the previous fiscal year to the relevant Administration of Industry and Commerce (AIC).
So, what document should file to the AIC?
The annual report should cover the following information
1) The mailing address, post code, telephone number, and email address of the enterprise.
2) Information regarding the existence status of the enterprise.
3) Information relating to any investment by the enterprise to establish companies or purchase equity rights.
4) Information regarding the subscribed and paid in amount, time, and ways of contribution of the shareholders or promoters thereof, in the case that the enterprise is a limited liability company, or a company limited by shares;
5) Equity change information of the equity transfer by the shareholders of a limited liability company;
6) The name and URL of the website of the enterprise and of its online shops;
7)Information of the number of business practitioners, total assets, total liabilities, warranties and guarantees provided for other entities, total owner’s equity, total revenue, income from the main business, gross profit, net profit, and total tax,etc.;
8)Information regarding customs annual reporting of enterprises subject to the administration of the customs.
Besides the annual report to AIC, FIEs in China are required to conduct an annual
comprehensive report to Ministry of Commerce (MOFCOM), Ministry of Finance (MOF), SAT, State Administration of Foreign Exchange (SAFE), and National Bureau of Statistics (NBS). Under the official system, all above information could be submitted online.
Unlike the previous annual inspection system, annual report compels relevant government bureaus to take on the role of supervisors, rather than judges. They no longer have the right to disapprove reports that are submitted, even if they think the reports are unqualified–they can only suggest that the FIEs make modifications.
As an alternative, commercial subjects can submit foreign exchange relevant information together with other information through the annual comprehensive report system. With this new rule implemented, the annual compliance requirements for FIEs have become much more manageable.
The customs administrators do not implement the approach of the rolling annual report. The period of annual report is still from January 1 to June 30 of each year. The form and content of the annual report remain same.In general,the commercial subjects with import&export license should belong to the object managed by the customs ,and need submit the report.
Lastly, the FIEs shall comply with Annual Foreign Exchange Reconciliation Combined into Annual Combinative Reporting, All foreign exchange transactions in and out of China are strictly controlled by SAFE, the bureau under the central bank of China (the People’s Bank of China).