The Law of the People's Republic of China on Township Enterprises

Law of the People's Republic of China on Township Enterprises

Order of the President of the People'Republic of China [1996] No. 76

October 29, 1996

The Law of the People's Republic of China on Township Enterprises, adopted at the 22nd Meeting of the Standing Committee of the Eighth National People's Congress of the People's Republic of China on October 29, 1996, is hereby promulgated and shall enter into force as of January 1, 1997.
　
Article 1 This Law is enacted for the purposes of facilitating and guiding the healthy and sustained development of township enterprises, protecting their legitimate rights and interests, standardizing their operations, cultivating a prosperous rural economy and promoting the socialist drive to modernize China.
　
Article 2 The term "township enterprises" as used in this Law refers to different types of enterprises that are established in townships (including the villages within their jurisdiction), with the majority of their capital being invested by rural economic collectives or farmers, and with the intention of supporting agricultural development.
The words "the bulk of their capital" as used in the preceding paragraph mean that the capital invested by the rural economic collectives or farmers exceeds 50 percent of the total invested capital, or is less than 50 percent of the total invested income but is enough to obtain a holding or dominating role in the enterprise.
A township enterprise that meets the qualifications to become a legal person shall obtain the legal status as a legal person while operating as an enterprise.
　
Article 3 Township enterprises provide the mainstay of the rural economy and constitute an important component of the national economy.
The main tasks of township enterprises are to develop the production of commodities in light of market demands, provide service to the public, increase the supply of marketable products, absorb surplus rural labor, help raise the income of farmers, support agriculture, advance agricultural and rural modernization and promote the development of the national economy and social undertakings.
　
Article 4 In developing township enterprises, the rural collective economy should be treated as the leading force in the promotion of the simultaneous development of diversified economic sectors.
　
Article 5 The State actively supports township enterprises, and is making appropriate planning for their development, and provides guidance suited to different types of township enterprises and administers township enterprise-related affairs pursuant to law.
　
Article 6 The State encourages and helps the economically underdeveloped areas and areas inhabited by ethnic minorities to develop township enterprises, and encourages township enterprises and other economic organizations in economically developed areas to support, by different means, the economically underdeveloped areas and areas inhabited by ethnic minorities in their efforts to run township enterprises.
　
Article 7 The administrative department for township enterprises under the State Council and other relevant departments shall, in accordance with their respective functions and responsibilities, make plans for and coordinate with, exercise supervision over and provide service to nationwide township enterprises; the administrative departments that manage township enterprises and other relevant departments of the local people's governments at or above the county level shall, in accordance with their respective functions and responsibilities, do the same with regard to township enterprises within their respective administrative regions.
　
Article 8 The township enterprises established through registration pursuant to the law shall undergo the registration procedure with the local administrative department that manages township enterprises.
Where a township enterprise wishes to change its name or domicile, or to divide itself or merge with another enterprise, to suspend its operations and close down, it shall, after registering its suspension or change, report to the administrative department that deals with township enterprises to have it recorded.
　
Article 9 The branches established in cities by township enterprises and the enterprises set up by rural economic collectives in cities to undertake the obligations in support of agriculture shall be treated as township enterprises.
　
Article 10 Where a township enterprise is established with the investment of rural economic collectives, its property rights shall be owned collectively by all the farmers who help to establish the enterprise.
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