Liu Yuting:

Problems and difficulties also emerged in the reform and need to be resolved. They could be summarized as the following:

First, the social understanding of registered capital of a company is not high. Prior to the reform, the concept of capital credit was deeply rooted in people’s minds. Registered capital is considered as indispensable in government management such as the issuing of permits and certifications, and also in bidding for business. The somewhat erroneous belief was that the amount of registered capital was an indicator of the capability of a company. But in fact, as long as shareholders pay the full contribution, the company is always liable to the full extent of its assets. There is not necessarily any correlation between the amount of a company’s registered capital and its assets. After the reform, the government will no longer provide endorsement of credit for the payment of a company’s registered capital. But on the whole, the public’s understanding of the concept of registered capital will take time to deepen, and much advocacy needs to be done.

Second, synergic implementation of reform of the registered capital registration system has yet to be further promoted. Reform of the business system is not a task just done by one office like the State Administration for Industry and Commerce, but rather systematic work requiring an overall layout deployed by the State Council. This resolutely follows the reform requirements and legal regulations by implementing the registered subscribed capital registration system at registration windows at all levels throughout the entire system, canceling the minimum amount limit of registered capital, and dispensing with the submission of capital verification reports. However, in the advancement of the reform process, problems gradually emerged, such as supporting systems lagging behind and lack of interfacing and synchronization in the management undertakings of relevant departments. For example, some departments still require paid-up capital and capital verification; some industries have threshold registered capital requirements, designating an amount of registered capital as the basis for an administrative permit; and some departments nominate annual inspections of industrial and commercial enterprises as a prerequisite for relevant administrative work. Therefore, in accordance with the deployment of the State Council, State Administration for Industry and Commerce combed out more than 100 ministry-level regulations and is now coordinating 33 ministries to revise the regulations.

Liu Yuting:

Third, the implementation of “license first, certificate second” reform has yet to be strengthened. The State Council has examined and approved three batches of 152 directory lists, and retained 34 items of prior examination and approval in industrial and commercial registration. Thus far, 113 items have been promulgated according to procedures. The method of pre-examination and approval has effectively morphed into post-examination and approval, as announced by the State Council, and this change has been executed at all industrial and commercial registration windows. The reform of the license first, certificate second process involves many government ministries. The key work in the next step should be that those ministries revise relevant regulations, adjust their examination and approval procedures, implement measures and opinions on strengthening supervision during the process and thereafter, and provide guidance for the implementation in their respective organizations so as to avoid supervision vacuums and to maintain market order.

Liu Yuting:

The key tasks to be taken are as followed.

First, we should improve the convenience of the registration system. The measures will include relaxing registration by establishing pilot regions for the reform of enterprise name registration management and allowing enterprises to decide what name they will use. Also, ensuring they understand that they must shoulder any corresponding liabilities. The registration method of the business scope of the enterprise to allow enterprises to decide what they want to run must be optimized. The process must be simplified for enterprise deregistration procedures by designating pilot regions for individually-owned businesses, businesses yet to commence operations, and businesses without creditor’s rights and liabilities so as to create a convenient and orderly market exit mechanism.

Second, we should promote innovation in the market access management model. The reform of the license first, certificate second process needs to be further promoted; registrations should be undertaken strictly in compliance with the provisions contained in the directory of pre-examination and approval in industrial and commercial registrations announced by the State Council. Those not covered by the directory should not be placed as a pre-examination and approval item. A market access management model must be actively explored in the form of a negative list, the notion of absence of legal prohibition means permission for market entities must be adhered to. Autonomy in the management of market entities must be safeguarded and research into and evaluation of regions piloting the pre-establishment national treatment and negative list management model, such as the Shanghai Free Trade Zone, should be strengthened in a bid to promote the shaping of egalitarian market access for all market entities.

Third, the efficiency of government public services is to be maximized. The whole process of e-business registrations should be accelerated. Based on the e-license, online applications, online acceptances, online examinations and verifications, online issuing of permits and online publicity shall be realized to truly reflect the achievements in terms of convenience of the reform in industrial and commercial registration. The registration reform involving the merging of three certificates into one should be further promoted, the one permit/three numbers registration model needs to be rolled out, and the pilot regions for the one permit/one number registration model should be implemented and broadened.

Fourth, we should strengthen middle-term and post regulation. Better conduct random inspection work, and do a better job in filing of registration information, the inspection of penalty information. Meanwhile strengthen guidance and regulation on enterprises’ annual reporting information and instant information. Promote information sharing among ministries and speed up the construction of joint penalty mechanism, as well as establish measures of inter-departmental penalties and concerted regulation. Strengthen credit restriction and promote credit information to be considered as an important matter by other ministries, so that ‘lose credit in one place and face restrictions in every place’ will be realized.

Fifth, The National Enterprise Credit Information Publicity System will be used as a reference to create the directory of small and micro businesses as soon as possible to enable the collective promulgation of support policies, the advancement of support applications from enterprises, the publication of information about support recipients, and so on; based on that, a mechanism for sharing the information of small and micro businesses should be devised to effectively enhance the awareness, accuracy and transparency of support policies and their implementation, and to facilitate the effective implementation of all these policies.

That is all. Thank you.