289 Measures of the Shenzhen Special Economic Zone on the Administration of Share-Holding through Technical Achievements[深圳经济特区技术成果入股管理办法(1998)]

Archived（May 28, 2018）

(Deliberated and adopted at the 97^th Executive Meeting of the Second Session of the Shenzhen Municipal People’s Government, promulgated by Order No. 78 of the Shenzhen Municipal People’s Government of September 14, 1998, and put into force from the date of promulgation) 

Chapter I General Provisions 

       Article 1 In order to promote the optimal combination of technical achievements and other factors of production, adjust the relationship of rights and obligations between technology capital subscribers and other share-holders, and protect the interests of companies’ creditors and the public, these measures are hereby formulated according to the laws, regulations of the state. 

       Article 2 These measures shall apply to share-holding through technical achievements in companies of limited liability and companies limited by shares (hereinafter referred to as “company”). 

       Article 3 The share-holding through technical achievements referred to in these measures shall mean that owners of technical achievements (hereinafter referred to as “technology capital subscribers”) invest their property rights of technical achievements in a company so that the technology capital subscribers gain their status as share-holders and the property rights of the related technical achievements are transferred to the company. 

       Article 4 Technology capital subscribers may use the following property rights of technical achievements at fixed values to buy shares:  

(1)   the patent rights of invention, utility models, exterior design; 

(2)   the copyrights of computer software; 

(3)   the right to use non-patented technical achievements; 

(4)   the other property rights of technical achievements approved by laws, regulations. 

The patent rights, copy rights of computer software shall mean the related rights 

based on the Chinese law and shall not include both the rights based on the foreign law and the permissions to use the related rights. 

       Article 5 The related rules on share-holding through non-patented technical achievements at fixed values shall be applicable to the technical achievement on which an application for patent has been filed but not been approved yet. 

       If an application for a patent on a technical achievement is approved after the technical achievement was used to buy shares, the technology capital subscriber shall transfer the patent right to the company within 6 months from the date of approval. 

       Article 6 The remaining term of protection for both the patent right and the copyright of computer software used for capital subscription shall be no less than 3 years. 

       Article 7 The non-patented technical achievements used for shareholding shall be the technical achievements in hand which are specific, complete, and can be imparted to the ordinary technical personnel of the related field of technology. 

       The technical achievements which have not been completed, scattered knowledge and information of technology, and technical capacity and experience which cannot separated from technical personnel themselves shall not be used as objects to be invested as technical achievements. 

Chapter II Evaluation of Technical Achievements 

       Article 8 The technical achievements used as investments shall have their prices fixed before registering a company’s establishment or changing a company’s registration. 

       Article 9 If the investments of both technology capital subscribers and other capital subscribers do not involve the state assets, all the subscribers may discuss and then decide to choose the following methods to fix the prices of technical achievements used for shareholding: 

(1)   to fix prices through consultation; 

(2)   to make an assessment and fix prices by an assets-evaluation agency which has legal qualifications. 

Article 10 If the investments of either technology capital subscribers or other 

capital subscribers involve the state assets, the assessment of technical achievements used for investment and fixation of their prices shall be done by an assets-evaluation agency which has legal qualifications or the prices shall be fixed according to the related laws, regulations. 

       Article 11 The evaluation result of an assets-evaluation agency shall be regarded as the prices of technical achievements only after all capital subscribers agree unanimously. 

       Article 12 The proportion of the amount of technical achievements at their fixed prices to the registered capital of a company shall not exceed 20% in general. 

       As for the new- and high-tech achievements identified by the municipal department in charge of science and technology, the amount of these achievements at their fixed prices may exceed 20% of the registered capital of a company of limited liability, but no more than 35%. 

       If there are other stipulations in laws, regulations on the proportion of shareholding through technical achievements for enterprises with foreign investment, they shall be honored. 

       Article 13 If the proportion of the amount of technical achievements at their fixed prices to the registered capital of a company exceeds the limitations prescribed in Article 12 of these measures, all the capital subscribers may increase the registered capital so that the proportion will be reduced to the limitations or below them. 

       If all capital subscribers do not want to increase the registered capital, the proportion of the shareholding of technology capital subscribers shall be kept within the prescribed limitations. As for the extra amount of technical achievements at their fixed prices over their amount actually used for shareholding, other shareholders may make a proper economic compensation by other means. 

Chapter III Articles of Company 

       Article 14 In case of shareholding through technical achievements, the articles of company shall be explicit about the following contents in addition to recording the related items according to Company Law of the People’s Republic of China: 

(1)   the objects to be invested as technical achievements; 

(2)   the evaluation of technical achievements and calculation methods; 

(3)   the proportion of the capital subscription by technical achievements to the total amount of registered capital; 

(4)   the technology capital subscribers’ obligations of both investment and prohibition of business strife; 

(5)   the time limit and standards of the examination and acceptance; 

(6)   the limit to the re-transfer by a technology capital subscriber to the third party of a non-patented technical achievement used by the subscriber as an investment during the period of continual existence of a company; 

(7)   the methods to share the follow-up improvements of technical achievements. 

Article 15 The “objects to be invested as technical achievements” prescribed in 

the articles of company shall include the name of the patent right to be used as investment, type of patent, date to apply for patent, patent number, time of efficacy, or the name of computer software, software registration number, date of the first publication, or the name, contents, requirements, and degree of industrial development of non-patented technical achievements. 

       Article 16 The “obligation of investment” prescribed in the articles of company shall mean that in order to make a smooth transfer of a technical achievement and to have this achievement digested, mastered, exploited by a company, a technology capital subscriber shall complete all the necessary work such as to provide technical information and data, to provide samples, and to conduct technical guidance and training, etc. 

       Article 17 The standards of the examination and acceptance shall involve only the contents of technological achievements and the process of their impartation and exploitation, including, in general, that the technology capital subscriber provide blueprints, technical data, samples, prototypes of machines, etc.; if there is a clear agreement between parties concerned, a technology capital subscriber may also provide special equipments, special raw materials, and other special conditions of production for exploiting the technical achievements. 

       The forecast and analysis made by a technology capital subscriber about economic benefits or cost indexes after exploitation of technical achievements shall not be taken as part of the standards of the examination and acceptance unless the parties concerned have a special agreement. 

Chapter IV Capital Subscription and Registration 

       Article 18 Companies shall register according to Regulations of the People’s Republic of China on the Administration of Company Registration (hereinafter referred to as Regulations on the Administration of Company Registration). When a company is registering, the following documents shall be attached to the certification on assessment of capital provided to the office of company registration: 

(1)   the certificates of patent, certificates of computer software registration, appraisal certificates of non-patent technical achievements, or certificates issued by the municipal department in charge of science and technology; 

(2)   a copy of the patent register issued by the Patent Office of China within the last three months, or a copy of the software register issued by the offices in charge of the administration of software within the last three months; 

(3)   the document of fixing of prices through consultation signed by all capital subscribers and the approval of the assets valuation statement signed by all capital subscribers. 

If the proportion of shareholding through technical achievements exceeds 20%, 

the related document of the municipal department in charge of science and technology to identify the technical achievements as the new- and high-tech ones shall be attached as well. 

       Article 19 Technology capital subscribers shall perform their obligations of investment according to the articles of company. 

       Article 20 In case of investing technical achievements in a new company to be incorporated, the legal transfer of the property rights of technical achievements may be processed after the establishment of the company. 

       Article 21 In case of investing a patent right in a new company to be incorporated, an application for the transfer of the patent right shall be filed to the state office in charge of patents within 6 months from the date of the establishment of the company, and it shall be reported to the company to be put on record. During the period, after the company is established and before the transfer takes effect, the company shall be deemed as it has already obtained the license for exploitation of patent, and may exploit the patent within the limits of its business. 

       Article 22 In case of investing a copyright of computer software in a new company to be incorporated, an application for being put on record shall be filed to the agency of software administration of the state office in charge of copyrights within 3 months from the date of the establishment of the company, and the certification of being put on record shall be submitted to the office of company registration. 

       Article 23 In case of investing a non-patented technical achievement in a new company to be incorporated, the technology capital subscriber and the company shall sign a contract of technology transfer within 1 month from the date of the establishment of the company, and it shall be reported to the office of company registration to be put on record. 

       Article 24 If a company of limited liability wants to increase shareholding through technical achievements, the procedure of transfer of patent rights shall be completed at the state office in charge of patents or the procedure of putting on record shall be completed at the agency of software administration of the state office in charge of copyrights in the first place. The office of company registration shall examine if the procedures of transferring, putting on record have been completed. If the procedures have not been completed, the application shall be rejected. 

       Article 25 The procedures of property transfer prescribed in the second section of Article 5, Articles 21, 22, 23 of these measures shall be handled specifically by the companies to which the rights are transferred. However, if the related departments required that technology capital subscribers should handle these procedures or their assistance should be needed for completing the procedures, the technology capital subscribers shall be responsible for handling the procedures or providing the necessary assistance. 

       Article 26 When the time limit of capital subscription expires, all subscribers shall jointly conduct the examination and acceptance. In case of successfully passing the examination and acceptance, all subscribers shall jointly sign the document of the examination and acceptance and report to the office of company registration to be put on record. In case of failing to pass the examination and acceptance, technology capital subscribers shall be held liable for breaking their contract. 

       After the examination and acceptance, technology capital subscribers shall still have the obligation to provide the necessary, reasonable guidance on technical problems emerging from the exploitation of the technology. 

       Article 27 If there is a dispute on the ownership of a technical achievement, after the parties concerned and other interested persons providing the related evidence for the office of company registration, this office shall stop processing the registration of shareholding through the technical achievement, wait until the dispute is settled, and then restore processing. 

Chapter V Rights, Obligations, and Liquidation 

       Article 28 Technology capital subscribers shall have the same legal status as other shareholders have, the board of directors of a company and other shareholders shall not place restrictions on technology capital subscribers in exercising their rights as shareholders. 

       Article 29 After a technology capital subscriber has performed the obligation of investment, this subscriber may hold a post in the company, and may not do so. 

       All capital subscribers shall agree that during the period of the continual existence of their company, without the consent of the company, a technology capital subscriber should not hold a post for technological development, technological administration, or technological service, etc. in other enterprises that make the products of the same kind and have the relationship of competition with the company. 

       Article 30 If there is one of the following situations, the meeting of the shareholders of a company shall have the right to make a decision to cancel a technology capital subscriber’s ownership of shares or to order a technology capital subscriber to use other properties to replace technical achievements for shareholding: 

(1)   the patent right which has been used for capital subscription is cancelled, declared to be invalid, or judged not to belong to the technology capital subscriber according to law; 

(2)   the copyright of software, the right to use non-patented technical achievements, which have been used for capital subscription, are judged not to belong to the technology capital subscriber according to law. 

If a technology capital subscriber does not have enough other properties to replace 

a technical achievement for shareholding after a deadline, the meeting of shareholders of a company shall make a decision to cancel the technology capital subscriber’s ownership of shares, and the company shall change the registration for reducing the registered capital according to law. 

       Article 31 If the situations referred to in Article 30 of these measures take place, technology capital subscribers shall be held liable for compensation for the loss caused for a company or creditors no matter whether they provide replacements for their capital subscription. 

       Article 32 If the patent rights, copyrights of computer software which have been used for capital subscription are terminated because of the expiration of the term of protection, it shall not affect the related shareholding. 

       Article 33 If the use value of a non-patented technical achievement which has been used for capital subscription for more than 1 year is reduced or lost, it will not affect the related shareholding. However, if the use value of a non-patented technical achievement is reduced or lost because of the mistake of the technology capital subscriber, this subscriber shall be held liable for compensation for the loss caused to the company or creditors. 

       Article 34 If a technology capital subscriber has allowed other people to use a technical achievement before processing the capital subscription by this technical achievement and the term of such allowed use will extend to the time after the technical achievement is used for capital subscription, the related situations shall be explained in advance to the company, other shareholders, and the assets-evaluation agency which takes up the evaluation work. 

       If there is no explanation in advance, the company shall have the right to make a decision to re-evaluate the technical achievement, the resultant expenses of evaluation and other resultant spending shall be born by the technology capital subscriber. As for the difference between two evaluations, the company shareholders shall have the right to reduce the shareholding of the technology capital subscriber correspondingly or to order the technology capital subscriber to use other properties to make up the difference within 3 months. If the technological capital subscriber has failed to make up the difference by the deadline, the company shall change the registration for reducing the registered capital according to law. The technology capital subscribers shall be held liable for compensation for the loss caused to the company, or shareholders, or the third party. 

       Article 35 If a technology capital subscriber who has used a non-patented technical achievement for capital subscription re-transfers the non-patented technical achievement to the third party in breaking a contract, the company shall have the right to take necessary measures to stop it. In case of causing the loss to the company or creditors, the technology capital subscriber shall be held liable for compensation. 

       Article 36 When a company is liquidating, the liquidation team shall auction or sell the property rights of technical achievements enjoyed by the company and enter the proceeds into the assets of the company undergoing liquidation. 

       At the request of the original technology capital subscriber, the property right of a technical achievement may be returned to the original technology capital subscriber if the company’s creditors and other shareholders have no objection. 

Chapter VI Legal Liabilities 

       Article 37 In case of failure to complete the transfer of property rights within the time limit prescribed in the second section of Article 5, Articles 21, 22, 23 of these measures, the office of company registration shall impose punishments according to Article 60 of Regulations on the Administration of Company Registration. 

       Article 38 If a technology capital subscriber, without reasonable ground, refuses handling or providing necessary assistance for the procedure of the transfer of property rights which should be done by the technology capital subscriber according to the second section of Article 5, Articles 21, 22 of these measures so that the transfer of property rights cannot be completed, the office of company registration shall impose punishments on the technology capital subscriber according to Article 60 of Regulations on the Administration of Company Registration. 

       Article 39 If a technology capital subscriber, without reasonable ground, fails to perform the obligation of investment within the prescribed time limit of the examination and acceptance according to the articles of company, the office of company registration shall impose punishments according to Article 60 of Regulations on the Administration of Company Registration. 

       Article 40 In case of violation of Articles 30, 34 of these measures by failing both to provide replacements for shareholding or make up the difference and to change the registration for reducing the registered capital, the office of company registration shall impose a fine according to Article 58 of Regulations on the Administration of Company Registration. 

       Article 41 If a technology capital subscriber, in violation of Article 35 of these measures, re-transfers the same technical achievement to the third party in breaking a contract, the office of company registration shall impose punishments according to Article 61 of Regulations on the Administration of Company Registration. 

       The punishments referred to in the previous section shall not affect the right of the company to claim the compensation for the loss from the technology capital subscriber. 

Chapter VII Supplementary Provisions 

       Article 42 If enterprises with foreign investments carry out shareholding through technical achievements, the related stipulations of these measures shall apply to these enterprises unless there are other stipulations in laws, regulations.