Pudong registers success with updated business system

Shanghai's Pudong New Area's modernized business registration system, which made it more convenient to register a new business as well as change registration information, is proving a success.

On March 15, 2022, the district officially put into effect regulations for the registration confirmation system of market entities, which marks a shift from administrative "licensing" to administrative "confirmation" for the registration of market entities in Pudong.

Under this confirmation system, the registration authority will only conduct a formal review of the application materials, while the enterprises themselves will be responsible for ensuring the legality, accuracy, and completeness of their public information and documents.

The system also simplifies procedures for changing personnel, setting up branches, and de-registering market entities.

Registration process under the confirmation system has been optimized through the regulations, which has standardized the material list, digitized the process, and made registration services more intelligent.

The regulations have been well received by a variety of companies, including Toshiba Devices & Storage, OriCell Therapeutics, and MicroPort Group.

Market-oriented

As of the end of April, 2023, the Pudong New Area Market Supervision Administration Bureau has confirmed the establishment of 18,704 enterprises and registered 40,854 changes through the new confirmation system.

The implementation of the confirmation system has made it more convenient for enterprises to handle registration procedures, which returns business autonomy to market entities, according to the bureau. Companies no longer need to submit a large number of documents and go through recording procedures with the registration authority.

Instead, market entities can easily complete the entire registration process or announce changes online through the National Enterprise Credit Information Publicity System or Shanghai's one-stop government service platform.

For instance, Toshiba Devices & Storage (Shanghai) Co completed the registration of its supervisor appointment through self-disclosure in June 2022. The company urgently needed to change its supervisor due to a management adjustment, and it found that it could easily complete the registration process through self-disclosure without submitting any application materials that were required before.

"It's really convenient," a company spokesperson said. "We found the information of the new supervisor in the National Enterprise Credit Information Publicity System on the second day after completing the self-disclosure.

"The confirmation system has returned the autonomy of market entities' operations through institutional innovation, making it easier for us to operate."

The bureau noted the confirmation system has also played a significant role in stabilizing market expectations during and after the epidemic, stimulating market vitality, and helping to accelerate economic recovery and revitalization.

OriCell Therapeutics, a bio-pharmaceutical company located in Pudong's Zhangjiang area, urgently needed to adjust its equity structure and business scope in April last year. However, at the time, its 16 shareholders were spread out across the country due to the epidemic, and the signed documents could not be delivered to the company in time.

The company immediately followed the requirements of the confirmation system and completed three shareholder changes and one business scope change registration between May and June, without the need to submit shareholder meeting resolutions or share transfer agreements.

"We never expected that we could complete all the adjustments so quickly through the confirmation system," it said. "This has given us enough time to prepare for the next round of financing."

Additionally, the system strengthens the enterprises' publicity obligations and integrity responsibility, as the enterprises are responsible for the legality, accuracy, and completeness of their public content and documents. These will be randomly checked by the registration authority.

And authorities are now actively working on leveraging the joint governance function of hosting service agencies – which can be business secretarial companies, accounting firms, law firms, or others – and strengthening their responsibilities for managing and supervising the hosted entities to maintain good market order.

This move is aimed at further promoting a market-oriented, rule-of-law, and internationalized business environment as well as enhancing the vitality of market entities, the bureau said.