19 Measures of Shenzhen Municipality on Transaction of Titles of State-owned and Collective Enterprises[深圳市国有集体企业产权交易办法（2003）]

                                                                                                                                                                                                                                                                                                  Archived（May 28, 2018）

Chapter I General Provisions

Article 1 In order to establish the withdraw mechanism for state-owned and collective economy, standardize title transaction acts of enterprises, avoid losing of state-owned and collective assets, these measures are hereby formulated.

Article 2 These measures shall be applicable to the following circumstances:

(1) Those activities that are undertaken by non-listed companies of state-owned and companies solely owned by collective of all levels of Shenzhen Municipality to transfer titles integrallty or partly;

(2) Those activities that are undertaken by the companies which majority of shares controlled by or invest in by non-listed companies of state-owned and collective companies of all levels of Shenzhen Municipality to transfer state-owned and collective titles; and

(3) Those activities that are undertaken by the companies whose majority of shares controlled by or invest in by listed companies of all levels of Shenzhen Municipality to transfer state-owned and collective titles.

Article 3 The transaction of titles of non-listed state-owned and collective companies shall be undertaken with legally established title transaction institution, any curb exchange shall be prohibited, unless as otherwise stipulated by laws and regulations.

Article 4 The transaction of titles shall abide by the principles of voluntariness and good faith, equal competition, equal value and mutual benefit, justice and fairness.

Article 5 The parties to the title transaction shall safeguard the legal rights and interests of the employees according to law. The settlement of the employees shall abide by relevant regulations of the state.

Article 6 Any title transaction shall not do harm to any third party’s interests and the public interests. There shall be agreement between the parties on the assumption of credit and debt of the transferor in the contract of title transaction.

Article 7 The municipal state-owned assets administrative authority, which is in charge of formulating policies for transaction of titles of state-owned and collective, shall implement direction, inspection and supervision over the activities involving in those transaction of titles and the transaction institutes.

Chapter II Title Transaction Institution

Article 8 A title transaction institution is an agency of services which established after being approved by the Municipal Government and registered according to the law.

In the case of providing services in the transaction of titles of state-owned and collective, any title transaction institution shall not be with the purpose of seeking profits.

Article 9 The business scope of a title transaction institution shall be as the follows:

(1) providing location for transaction of titles;

(2) providing title transaction information and consultation services;

(3) examining and supervising the authenticity of activities involving in the transaction of titles;

(4) providing certification for activities involving in the transaction of titles;

(5) reporting important matters of title transaction to relevant governmental authoritys according to the law;

(6) carrying on registration and annual inspection over state-owned assets of enterprises via entrusting; and

(7) other business as approved by the municipal government.

Article 10 A title transaction institution may put associate system and trader system into practice.

Article 11 A title transaction institution shall formulate constitution of its institution and rules for title transaction according to these measures and put them into force after being approved by the municipal government.

Chapter III Manners for Transaction of Titles

Article 12 The transaction of titles may be carried out by means of invitation for transaction, auction, invitation to bid and other means which approved by the municipal government. The specific manners of transaction are to be agreed upon by the transferor.

The relevant state rules shall be applicable in case the transactions carried out by means of auction and invitation to bid.

Article 13 In these measures, invitation for transaction referred to the transaction manner that upon the expiration of period for public listing of title to be transferred with the title transaction institution, the transferor or its agency invites those qualified potential purchasers, through prudent investigation and negotiation, determining candidates list which will be submitted to the assessment commission for preferential negotiation, and then determines the transferee in the end.

Article 14 The assessed net assets value shall be the reference price for title transaction price, while the audit result shall be the reference price in case such net assets value exempted from assessing by the state-owned assets administrative authority. In case the purchase price is lower than the reference price, such transaction shall be reported to the state-owned assets administrative authority for approval.

Chapter IV Procedure for Transaction of titles

Article 15 Any title transaction shall abide by the following procedure:

(1) submitting materials and going through authorization procedure for title transaction;

(2) listing publicly;

(3) asking for purchase;

(4) trading;

(5) concluding contract of title transaction; and

(6) handling authentication procedure for title transaction.

Article 16 In the case of applying for transaction with the institution, the transferor of the title transaction shall submit to the title transaction institution the following documents: its qualification certificate, certificate for property right, certificate for approval of title transaction, situation of the object to be transferred and other relevant materials.

Article 17 The application of transfer of state-owned title shall be adopted by the state-owned assets administrative authority in advance; while the application of transfer of collective title shall be adopted when affirmative votes achieves more than half of total votes cast by the employees’ meeting and reported to collective assets administrative authority for record in advance.

Article 18 In the case of transfer of state-owned and collective title, assessment of title and presentation of assessment report, which shall be approved or recorded by relevant authority as well, by legal assets assessment institution in advance are required. Any title having not been assessed and reported for approval or record shall not be transferred.

Articles 19 The title transaction institution shall go through those materials submitted by the transferor and transferee and make a decision on approval or disapproval of transaction within 3 days upon the date receiving full copy of those materials.

Article 20 A title transaction institution shall list in public those titles approved for transaction and issue title transaction information through the internet, the press and other medias termly. The period of listing shall be no less than 20 working days from the date listing in public.

Article 21 In the case of applying for transaction in the institution, the title purchaser shall submit to the title transaction institution the materials such as its qualification certificate, credit certificate and document of purchase intention, etc..

Article 22 The transaction of title to merchants of overseas, Hong Kong, Macao and Taiwan shall be in compliance with rules and industrial guideline catalog for foreign investment of the state and Shenzhen Municipality.

Article 23 To purchase those titles with monopolization, traded under exclusive right and other franchise rights, the purchaser shall have obtained corresponding qualifications and met corresponding requirements according to relevant rules.

Article 24 The title transaction institution may, within or after expiration of the period of list, provide services for the enterprises involving in the title transaction and help to bring about deals between the enterprises through organizing negotiation or providing consultation.

Article 25 After expiration of the period of list, the title transaction institution shall organize transaction according to the manner of transfer which determined by the transferor.

Article 26 After conclusion of the transaction, the parties to the transaction may conclude a contract of title transaction with a reference to the model contract which provided by the title transaction institution.

Article 27 The contents of a contract of title transaction shall include:

(1) Name, domicile and name of legal representative of the transferor and transferee;

(2) Transaction object, price, cost and means and time for the payment;

(3) Guarantee for authenticity and validity of the title to be transferred which provided by the transferor;

(4) Disposal of creditor’s rights, debts, profit and loss of the transferor;

(5) Matters concerning title transaction of the transferor;

(6) Assumption of relevant tax and cost incurred in the transaction;

(7) Conditions for alteration and cancellation of contract;

(8) Liabilities for breaching of contract and manners for solution of disputes; and

(9) Other contents as the parties considered necessary to be agreed upon.

Article 28 Any title transaction shall not damage the rights and interests of other creditors. In the case that the creditor’s rights and debts of the transferor are to be transferred with the title, such matters shall be agreed upon by the parties to the contract of title transaction.

Article 29 After conclusion of the transaction, the parties to the transaction shall present full copy of materials of information related to the title transaction and the contract of title transaction for authentication by the title transaction institution.

Article 30 After receiving full copy of required materials and contract of title transaction, the title transaction institution shall go through and authenticate the authenticity of the following matters:

(1) Qualification of the transferor and transferee of the title transaction;

(2) Information concerning the title transaction and its relevancy with the transferor;

(3) Price for transaction;

(4) Procedures for transaction; and

(5) Essential contract clauses and conditions for transaction.

Article 31 The parties to the title transaction shall handle relevant modification procedures before the authorities in charge of state-owned assets, taxation, foreign trade and economy cooperation, industry and commerce, bank, land, labor, social safeguard, public security and public utility with presentation of contract of title transaction which authenticated by the title transaction institution. The relevant authorities shall deal with and finish the procedures within stipulated time limit.

Article 32 The following titles shall not be transferred:

(1) Unidentified or disputed titles;

(2) Mortgaged titles which having not been approved to be transferred by the mortgagee;

(3) Titles having been preserved in litigation or compulsory enforced which having not been approved by the competent people’s court to be transferred;

(4) Titles that are prohibited to be transferred by laws, regulations and government; and

(5) Under other circumstances that titles having been restricted of right of disposing.

Article 33 In case the transaction of title involves national safety, national defense, sophisticated technique and national secret, the title shall be transferred in accordance with relevant state rules.

Article 34 The title transaction shall be suspended if it falls into the following circumstances:

(1) Any third party lodges an objection against the title to be transferred during the transaction, and the dispute has not yet been ruled;

(2) The transactions can not be carried on due to irresistible force;

(3) Other circumstances that the transaction shall be suspended according to law.

Article 35 The title transaction shall be terminated in case it falls into the following circumstances:

(1) Where new situation comes forth, the state-owned assets administrative authority affirms that the transferor has no right to transfer the title and issues written notice of termination of transaction;

(2) The title lost naturally due to irresistible force; and

(3) Other circumstances that the transaction shall be terminated according to law.

Article 36 The title transaction institution shall establish file database for registration of transaction of titles and formulate rules for preservation and inquiry of the database.

Chapter V Legal Responsibilities

Article 37 In case the parties to the title transaction fail to handle the transaction of title of state-owned and collective in public as stipulated, the title transaction institution shall report to relevant authority, which shall investigate and fix administrative liability upon relevant unit or person liable and shall turn over them to the judicial authorities if their acts constitute a crime.

Article 38 Where the parties to the transaction submit certification documents involving false, gross mistake or seriously mislead contents, which results in detriment to others, they shall be liable for compensation.

Article 39 In case the parties to the transaction commit the following acts, the title transaction institution shall report to relevant authority, which shall investigate and fix administrative liability upon relevant unit or person liable and shall turn over them to the judicial authorities if their acts constitute a crime:

(1) The transferor transferring title of state-owned and collective without authorization, which results in loss of state-owned assets;

(2) The parties to the transaction of title collaborating maliciously and stooping to deception, which results in detriment to interests of the state, collective and others;

(3) Depressing or excessively bidding up transaction price or improve conditions for transaction intentionally, which seriously hampers the transaction of title;

(4) Violating rules for title transaction;

(5) Other acts as prohibited by laws and regulations.

Article 40 In case any authentication personnel colludes with the parties involving in the title transaction, which results in detriment to benefits of the state, collective and any third party, they shall bear civil liability or be prosecuted for criminal liability in case they commit a crime.

Article 41 In case the title transaction institution stoops to deception and abuses power for personal gain, which results in detriment to legal rights and interests of the parties to the transaction, it shall be punished by warning, fine, shutout respectively according to the circumstances of violation by relevant governmental authority.

Article 42 In case the state-owned assets administrative authority carries out examine and approve procedure against rules, the persons directly liable shall be investigated for liabilities.

Article 43 In case relevant governmental authority illegally handles or refuses to handle title alteration procedure, the persons directly liable shall be investigated for liabilities.

Article 44 In case any agencies such as finance advisor institution, accountants firm, law office and assets assessment institution, when handling and providing statement, report and certificate which required by title transaction institution, collaborates with parties to the transaction and issues false documents, they shall be punished by relevant authority with assistance of the title transaction institution according to the law; while they shall be liable for compensation in case incurs detriment to others; in case their acts constitute a crime, they shall be prosecuted for criminal liability.

Chapter VI Supplementary Provisions

Article 45 Title transaction institution may collect a certain amount of fees when handling transaction of titles. The charging standard shall be checked and ratified by municipal administrative authority for prices in the presence of municipal state-owned assets administrative authority.

Article 46 These measures shall take effect as of April 1, 2003.