Regulations on the Management of Foundations (Draft Revisions for Solicitation of Public Comments)

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Chapter I: General Provisions

Chapter II: Establishment, Modification, and Deregistration

Chapter III: Organizational Structure

Chapter IV: Activity Norms

Chapter V: Information Disclosure

Chapter VI: Supervision and Management

Chapter VII: Legal Responsibility

Chapter VIII: Supplementary Provisions

Regulations on the Management of Foundations (Draft Revisions for Solicitation of Public Comments)

Chapter I: General Provisions

Article 1: These regulations were drafted to standardize the organization and activities of foundations; safeguard the legitimate rights and interests of foundations, contributors, and beneficiaries; and promote social participation and charitable enterprise.

Article 2: In these Regulations, foundations mean non-profit legal entities established under these Regulations using assets donated by natural persons, legal entities, or other organizations with the goal of carrying out charitable activities.

Article 3: Foundations must abide by the Constitution, laws, regulations, rules, and state policies. Foundations must not endanger national safety, unification, or ethic cooperation, harm national interests, public interests, or the legal interests of others. Foundations must not contravene public morals.

Article 4: Based on actual circumstances, foundations shall set up Chinese Communist Party Organizations and carry out Party activities. Foundations shall provide necessary conditions for Party organizations' activities.

Article 5: Foundations shall carry out charitable activities in accordance with its charter. They should follow the principles of legality, consent, honesty, openness, and transparency.

Article 6: The Ministry of Civil Affairs under the State Council and Civil Affairs departments of local people's governments at the county level or above shall be the registration and management authorities of foundations (hereafter, registration and management authority, or, the authority).

Relevant departments of the State Council and local people's governments at the county level or above, or their authorized units, are the professional supervisory units for foundations (hereafter, professional supervisory units).

Relevant departments of all levels of local people's governments at the county level or above follow these Regulations and other relevant laws and regulations to complete relevant work within the scope of their own responsibilities.

Article 7: The State formulates measures to encourage and support foundations through procurement of services, financial subsidies, leadership development, and other means.

Foundations making outstanding contributions in economic and social development will be given commendations and awards by the State.

Foundations and their donors and beneficiaries shall enjoy tax benefits in accordance with laws and regulations.

 

Chapter II: Establishment, Modification, and Deregistration

Article 8: A foundation shall fulfill the following conditions in order to be established:

(1) Its purpose is to carry out charitable activities;

(2) It does not have a profit-making motive;

(3) It has a certain amount of registration capital, such capital being currency that has arrived in the account;

(4) It has its own name, charter, premises, organization, person-in-charge, and dedicated staff appropriate for its activities;

(5) It is able to independently bear civil liability.

Foundations registered at the civil affairs department of a county level people's government shall have a registration capital of not less than RMB 2 million; those registered at the civil affairs department of a city government with administrative areas shall have a registration capital of not less than RMB 4 million; and those registered at the civil affairs department of provincial people's governments shall have a registration capital of not less than RMB 8 million.

Article 9: When registering with the civil affairs departments of the State Council, foundations should also fulfill the following conditions in addition to the stipulations of Article 8, Paragraph 1:

(1) The registered capital is not less than RMB 80 million;

(2) Its activities are national in scale and uses funding charitable organizations and other groups to carry out activities;

(3) The founder has widespread reputation and influence throughout the nation in the relevant field;

Upon the approval of the State Council, such foundations may use "China", "National", "Chinese", and other such language in their names, and they obtain public fundraising credentials from their day of registration.

Article 10: The name of a foundation shall comply with the provisions of laws, regulations, rules, and national policies, and be appropriate for its operational scope and accurately indicate its characteristics.

Foundations registered by civil affairs departments of people's governments below the provincial level shall include the name of the administrative district it is registered in as its name.

Specific measures on the management of foundations' names are to be formulated by the Ministry of Civil Affairs under the State Council.

Article 11: Those with any of the following circumstances must not be the founder of a foundation:

(1) Persons lacking or having limited civil capacity;

(2) Those who have been punished for an intentional crime, where 5 years has not yet elapsed since the conclusion of the criminal sentence;

(3) Those who have served as the responsible party at an organization whose certificate of registration has been cancelled or has been shut down, and 5 years have not yet elapsed since the date upon which the organization's certificate of registration was suspended or it was shut down.

State organs must not initiate the establishment of foundations.

Article 12: The founder shall submit the following documents to apply for registration:

(1) the written application;

(2) The draft charter;

(3) Attested proof of funding and proof of their domicile;

(4) Proof of identification of the founder and proposed responsible party;

Where foundations must have the review and consent of professional supervisory units in accordance with regulations, the founder shall also submit the documents of approval from professional supervisory unit to the registration management organs.

The written application and draft charter shall be agreed upon by all founders.

Among the proposed responsible parties, there should be at least one principle founder.

Foundations must not carry out activities aside from preparatory tasks during the preparation period, and must not send information on donations to organizations or individuals other than founders.

Article 13: A foundation’s charter must make clear its public interest charity nature and must not have content providing that specific natural persons, legal persons or other organisations are beneficiaries.

The foundation charter shall indicate the following matters:

(1) Name and domicile;

(2) Purpose and scope of operations;

(3) Amount of registered capital;

(4) Asset sources and composition;

(5) the organizations structure, authority, and rules for formal discussions;

(6) Duties, qualifications, selection procedures, and terms of office for directors and supervisors;

(7) Duties, qualifications, selection procedures, and terms of office for responsible parties;

(8) asset management and utilization systems;

(9) project management systems;

(10) termination procedures and methods for liquidiation after termination.

Article 14: Registration management organs shall issue a decision to approve or decline registration within 30 days of receiving a foundation's application for establishment and registration.

Where there are special circumstances requiring an extension of the registration period, an appropriate extension may be given upon permission of the civil affairs department at the level above, but the extended period must not exceed 60 days.

Article 15: The registration management organs will issue a "Certificate of registration as a legal person foundation" to foundations whose registration is approved and the Certificate shall indicate the main registration matters of the foundation, its nature as a charitable organization, and its method of fundraising. Where registration is not approved, the reasons shall be stated in writing.

Registration matters for foundations include:

(1) Name;

(2) Domicile;

(3) Purpose and scope of operations;

(4) legally-designated representative, responsible parties, directors, and supervisors;

(5) Registered capital.

Where there is a professional supervisory unit, registration matters shall also include the professional supervisory unit.

Article 16: Foundations shall complete tax registration in accordance with law.

Foundations may use their registration certificate to have an official seal made and to open bank accounts in accordance with law.

Foundations shall register their seals with the registration management organs.

Article 17: Where matters in foundations' registrations are modified, they shall apply to modify the registration with the registration management organs within 30 days of making the modification decision.

Where foundations revise their charters, they shall apply to the registration management organs to have their charter approved within 30 days of making the revision.

Foundations with a professional supervisory unit shall seek the consent of the professional supervisory unit before effecting the changes above.

Article 18: Where the registration management organs' review of the establishment or modification of a foundation involves major public interests, they may solicit opinions of relevant departments or hear opinions through other means such as discussion sessions or hearings, and the necessary time will not be calculated into the period for review. The registration management organs shall inform the applicants of the time required.

Article 19: In any of the following situations, foundations shall apply for deregistration to the registration management organs:

(1) Where conditions for termination provided for in the charter manifest;

(2) Where termination is required due to division or merger;

(3) Where he foundation has not carried out public interest charitable activities for 2 consecutive years;

(4) Where the registration certificate has been revoked in accordance with law;

(5) Where it needs to be terminated for other reasons.

Where the application to terminate is based on items (1) or (2) of the preceding paragraph, the board of directors shall make the decision to terminate.

Article 20: The executive board shall set up a liquidation team to conduct a liquidation within 30 days of the decision to terminate, and publicly announce this. Where a liquidation team has not been formed in time, the registration management organs may apply to the people's courts to appoint relevant personnel to form a liquidation team and conduct liquidation.

Where foundations with professional supervisory units who had not set up liquidation teams in time or whose liquidation teams do not fulfill their duties, the professional supervisory unit will designate relevant personnel to form a liquidation team and to conduct liquidiation.

During the liquidation period, the foundation must not carry out activities other than liquidation. The liquidation team shall complete liquidation work within 90 days of its formation, and represent the foundation in handling deregistration after liquidation work is completed.

Liquidation costs may be paid from foundation assets.

Article 21: Those applying to deregister shall hand over their seals to the registration management organs and submit the following documents:

(1) Liquidation report;

(2) Deregistration certificate;

(3) The orginal registration certificate and a copy;

(4) Proof of cancellation of bank accounts;

(5) Any other documentation as required by the registration management organs.

Foundations shall apply for deregistration within 15 days of the end of winding-up. The registration management organs shall review and approve deregistration within 30 days of receipt of all valid documents.

 

Chapter III: Organizational Structure

Article 22: Foundations establish a board of directors. The board of directors is the decision making body of the foundation, and carries out activities in accordance with laws, regulations, and the charter, to be responsible for the foundation.

The board of directors is to have 5 to 25 directors with the specific number provided by the charter.

The first executive board shall include the principle founders.

Article 23: The term of office for the directors is to be provided in the charter, but a term must not exceed 5 years. When the term of a director is completed, they may serve another term after a re-election.

At foundations with credentials to public fundraising credentials, the chairperson must not serve more than two terms.

If a director fails to attend two meetings of the board of directors in succession without legitimate cause, they are considered to have resigned.

If the number of directors comprising the board of directors is lower than that provided in the charter, the vacancies shall be promptly filled. Before the vacancies are filled, the existing directrors shall continue to perform their duties as directors in accordance with laws, regulations, and the foundation's charter. Directors who do not perform their duties bear legal responsibility in accordance with law.

Article 24: The board of directors is to have 1 chairman, and may have 1-3 vice-chairmen, elected from among the directors. The chairman is the foundation's legally-designated representative.

Article 25: The number of directors who are close relatives to each other must not exceed one-third the total number of all directors; and for foundations with public fundraising credentials, directors that are close relatives must not concurrently serve on the board of directors at the same time.

Article 26: Foundations' boards of directors exercise the following powers in accordance with laws:

(1) Revising the Charter;

(2) Set up and manage the internal organizational structure, and set up management systems;

(3) Election or dismissal of the chair, deputy chair or general secretary; and decisions to hire or terminate a secretary-general;

(4) Engage in important fundraising events, investments, and related transactions, provided for by the Charter;

(5) Decide on splitting, merging, or terminating the foundation;

(6) Deliberate annual work plans, annual work reports, expense budgets, and final financial reports;

(7) Determine capital raising, management and use plans;

(8) Determine compensation matters regarding directors and the secretary-general;

(9) Other matters provided in the charter.

Article 27: The foundation's board of directors is to hold at least 2 meetings every year. Where one-third or more of the directors raise a motion, a meeting of the board of directors shall be promptly convened.

Board meetings are to be called and presided over by the chairman. Where the chairperson cannot or does not perform their duties, the vice-chair shall perform them; if the vice-chair cannot or does not perform his duties, a convener shall be selected by at least one-third of the directors, and the convener shall call and preside over the meeting of the board of directors.

Article 28: Meetings of a foundation's board of directors must have two thirds of the directors in attendance as quorum; and decisions must achieve a simple majority of those attending a meeting to be effective.

The powers listed in items (1) - (5) of Article 26 are effective only when exercised by two-thirds of all directors.

Article 29: Meetings of the board of directors shall be attended by the directors themselves. Directors who for some reason are unable to attend a meeting may entrust another director or person in writing to attend the as proxy, and the written appointment should indicate the scope of authorization.

Each proxy may only accept the appointment of one director at a meeting of the board of directors, and proxies must not exceed one-third of the total directors.

Article 30: Meeting summaries shall be made for meetings of the board of directors, and shall be signed directors and proxies in attendance. The dissenting opinions of directors shall be recorded in the meeting summary.

Article 31: Foundations are to have a secretariat. The secretariat shall work under the leadership of a secretary-general to organize implementation of resolutions of the board of directors and exercise other powers granted by the charter.

The secretary-general shall be a solitary duty, and must not be held concurrently by the chairperson.

Secretaries-general that are not directors may attend meetings of the board of directors without the power to vote.

Article 32: Foundations are to have a supervisor or board of supervisors.

Foundations registered with a people's government at the provincial level or above that have public fundraising credentials shall establish a board of supervisors. The board of supervisors is to have 3 to 7 supervisors, with the specific number to be determined by the charter. The board of supervisors is to have 1 supervisor-in-chief.

Foundations other than those provided for in the preceding paragraph are to have at least one supervisor; those with a relatively large amount of capital may establish a board of supervisors. A foundation with 3 or more supervisors shall establish a board of supervisors.

Article 33: Supervisors are to be appointed by principle donors and professional supervisory units, and may also be appointed by registration management organs.

The supervisor-in-chief is to be elected by a simple majority of the supervisors. The term of office for supervisors is to be the same as that of directors. At the completion of supervisors' terms, they may serve a subsequent term.

Supervisors must not be close relatives of each other. Directors, the Secretary-general, the foundation's finance and accounting staff, and their close relatives, must not serve as supervisors.

Article 34: The board of supervisors, or supervisors of foundations without a board of supervisors, exercise the following powers in accordance with law:

(1) Supervise the business of the board of directors and the secretariat, and examine the foundation's financial and accounting materials;

(2) Propose suggestions to remove a person from office, or terminate his employment;

(3) Report situations of irregular activities of the foundation to the registration management organs, professional supervisory units, taxation, accounting, and other relevant departments;

(4) other powers granted by the charter.

Supervisors may attend meetings of the board of directors without the power to vote, and may raise questions or suggestions regarding matters under discussion.

Article 35: The board of supervisors is to hold at least 2 meetings every year. Meetings of the board of supervisors must have two-thirds of the supervisors attending to convene and resolutions can be passed only by over half of the total supervisors in order to be valid.

Article 36: Supervisors and directors who do not serve in other full time positions in the foundation must not collect compensation from the foundation.

Directors who receive compensation from a foundation must not exceed one-third the number of total directors.

Necessary expenses incurred by directors or supervisors in the performance of their duties are to be borne by the foundation.

Article 37: Persons with any of the circumstances mentioned in Paragraph 1 of article 11 of these regulations, cannot serve as directors, supervisors, or secretaries-general.

Where during their term of office, directors, supervisors, or the secretary-general manifest any of the conditions listed in paragraph 1 of Article 11 of these regulations, the foundation shall release them from their position.

Article 38: Employees of state institutions must not concurrently be the chairperson, vice-chair, or secretary-general of a foundation. The legally-designated representative of a foundation must not concurrently be the legally-designated representative of another organization.

Article 39: Foundations' directors, supervisors, and secretaries-general must not use their affiliations to harm the rights and interests of the foundation or beneficiaries, or the societal public interest.

Foundations' directors, supervisors, and secretaries-general who have transactions with the foundation must not participate in the decision-making process on that matter, and the circumstances of the relevant transactions shall be made public.

 

Chapter IV: Activity Norms

Article 40: Foundations' assets and other legal income are protected by law, and cannot be distributed among the founders, donors, directors, supervisors, and staff.

Foundations' assets must not be privately divided, embezzled, withheld or misappropriated by any organization or individual.

Article 41: Foundations carrying out public fundraising shall obtain public fundraising credentials in accordance with law. Foundations that have not obtained public fundraising credentials may conduct fundraising aimed at designated targets such as founders and member of the board of directors.

Article 42: Foundations conducting public fundraising shall formulate fundraising plans. The fundraising plan shall be filed for the record with the registration management organs before fundraising activities are carried out.

Where there is no way to file a fundraising plan for the record before carrying out public fundraising activities for responses to emergencies such as major natural disasters, accidental disasters, and public health incidents, the foundation shall complete the filing formalities within 5 business days after the public fundraising activities begin.

Article 43: Where foundations accept tangible property such as goods and houses, they shall confirm receipt and issue a donation receipt after actually receiving it

Article 44: Where foundations and donors have entered into a donation agreement, they shall use the donated property according to the agreement. If it is necessary to modify the use, they shall first obtain the consent of the donor and it must still be used for public interest charitable areas; where there is truly no way to obtain donor's opinions, they shall be used in accordance with the foundation's goals for purposes the same or similar to the original public interest charitable purposes.

When donations in kind cannot be used in accordance with the mission, foundations may lawfully auction or otherwise sell of the items and use the money raised to fulfil the purpose of the donation.

Article 45: A donor has the right to question the management and the use of his donated assets; and foundations shall promptly give feedback to the donor on relevant situations.

Foundations fundraising from a specific group shall promptly, or in accordance to the donors' requests, inform the donors of the fundraising situation and the management and use of the donated items and money.

Article 46: Foundations retaining other organizations or individuals to carry out charitable projects shall sign a retention agreement and supervise the implementation of the public interest charitable projects.

Where the project operator does not use the donated property in accordance with the agreement, or contravenes the agreement in other ways, the foundation may terminate the agreement and demand a return of the assets in accordance with law.

Article 47: Foundations must not accept members, and may not fund for-profit activities unrelated to the public interest charitable purposes.

Article 48: Foundations carrying out activities to maintain or increase capital shall follow the principles of legality, safety, and effectiveness, and set up risk-control mechanisms.

Article 49: The year-end net assets of a foundation must not be lower than the minimum registered capital standards provided by Articles 8 and 9 of these Regulations.

The standards for annual expenses and management fees in carrying out public interest charitable activities shall follow relevant national provisions.

Article 50: Branch organizations such as special project funds are a constituent part of the foundation with no separate standing as legal persons, and shall carry out activities within the scope of the foundation's authorization, using the standard full name of the foundation it belongs to and the foundation will bear legal responsibility. Income and expenses from branch organizations such as special project funds shall be included in the foundations' unified accounting.

Foundations must not set up regional branch organizations.

Article 51: Foundations shall implement a unified national accounting system, shall undertake accounting according to law, and shall establish a sound internal accounting supervision system.

Foundations shall prepare a financial accounting report at the end of each fiscal year, and the financial accounting reports of foundations with public fundraising credentials must be audited.

Foundations must not have accounting records other than the accounting records prescribed by law. Foundations' assets must not be saved in the accounts of any individuals or other organizations.

Article 52: After liquidation, the residual assets shall be used for charitable purposes in accordance with provisions of the foundation's charter; where there is no way to follow the charter's provisions for disposition, the registration management organs organize their donation to a foundation with a form and charitable purpose that is the same or similar to the foundation, and announce this to the public.

Article 53: Foundations accepting foreign donations, carrying out foreign cooperation, entering international organizations, and so forth, shall follow the relevant national regulations and establish a corresponding management scheme.

 

Chapter V: Information Disclosure

Article 54: Registration and management organs shall provide free foundation information disclosure services through a unified information platform, and promptly the following information that arises during the course of performing their duties:

(1)Matters about foundations, such as their establishment, modification, cancellation, charter approval.

(2) A list of foundations qualified for public fundraising;

(3) A list of foundations eligible to give public interest tax deduction receipts for donations.

(4) Outcomes of investigations or appraisals of foundations;

(5)Outcomes of commendations or punishments of foundations

(6) Other information that laws and regulations provide shall be disclosed.

Article 55: Government departments other than registration management organs (hereinafter 'other government departments') shall publicly disclose the following information that arises during the course of performing their duties:

(1)Administrative licensing decisions;

(2)Results of administrative punishments;

(3)Other information shall be disclosed in accordance with the law.

Registration management organs shall establish information sharing mechanisms with other government departments.

Article 56: Foundations shall submit annual work and financial accounting reports to the registration management organs from the 1st of January to the 31st of March each year, and release the information to the public on the registration management organs' unified information platform.

Foundations established and registered in a given year begin submitting annual work and financial accounting reports in the following year.

Foundations with professional supervisory unit shall submit reports to the professional supervisory unit for review before submitting them to the registration management organs.

Article 57: The content of annual work reports is to include:

(1) Registration matters, websites, telephone contact numbers and other basic information;

(2) Information on operational activities such as the receipt of donations and large donations, public fundraising, expenses and management costs for public interest charitable activities, implementation of charitable projects, asset management, maintenance or appreciation of asset values, affilliations and transactions, undertaking government procurement of services, and staff salaries and benefits;

(3) Information on organizational structure such as the employment and compensation of directors, supervisors, and employees; the convening and decision-making of meetings of the board of directors, the establishment of Party organizations, and special project funds;

(4) Audit reports by a certified public accountant;

(5) The outcomes of any inspections and assessments undergone, or of commendations or punishments received; circumstances such as obtaining credentials to receive tax-deductible donations, and other tax incentive qualifications, and so forth;

(6) supervisory comments;

(7) Performance on information disclosure obligations;

(8) Other information requested by the registration management organs.

Article 58: Where foundations' annual work or financial accounting reports must be modified, the foundation shall resubmit it to the registration management organs as well as a written explanation of the reasons for the modification, and then have the revised annual work or financial accounting report, and written explanation of the revisions, disclosed to the public.

Article 59: Within 30 days of the following information taking shape or being modified, foundations shall disclose it to the public through the unified information platform of the registration management organs and through other methods to facilitate inquiries form the public:

(1) Registration matters;

(2) the organizational charter;

(3) Information on the members of their decision-making, implementation, and supervision bodies;

(4) Information relating to special project funds and other branch organization information;

(5) Internal management systems involving the socieal public interest;

(6) Situations relating to the assumption of transferred government functions, authorizations, commissions and procurement of services.

(7) Other information required to be disclosed by the Ministry of Civil Affairs under the State Council.

Foundations with public fundraising credentials shall, in accordance with the manner specified in the preceding paragraph, publicly disclose information relating to major creditor's rights, debt, and major activities for the maintenance or appreciation of asset values.

Article 60: Where foundations with public fundraising credentials carry out public fundraising, they shall make public information such as their public fundraising qualification certificates, public fundraising plan, contact methods, and means of making inquiries into fundraising information, through the registration management organs' unified information platform and in a conspicuous location at the site of fundraising activities or on media for fundraising activities, and periodically disclose information on fundraising and the implementation of charitable programs to the public.

Where the period for public fundraising exceeds 6 months, the specific circumstances of public fundraising should be reported at least once every 3 months, and after the fundraising has concluded, the overall circumstances of fundraising shall be disclosed within 3 months.

Where charitable projects' implementation period exceeds 6 months, the situations of the implementation of the projects should be reported at least once every 3 months, and after the projects have concluded, the overall circumstances of implementation and use of collected funds and property shall be disclosed within 3 months.

Article 61: Foundations shall lawfully perform information disclosure obligations in accordance with law. Information disclosures shall be truthful, complete, and timely, and must not have any misrepresentations, misleading statements or major omissions.

Foundations shall make an information disclosure archive for information that has already been disclosed and preserve it well.

Article 62: Information related to state secrets, commercial secrets, or personal privacy, as well as information such as the names, titles, address, and contact method of donors who do not consent to it being disclosed, must not be made public.

 

Chapter VI: Supervision and Management

Article 63: Registration and Management Organs perform the following supervision and management duties:

(1) Responsible for establishment, amendment, or withdrawal of foundations' regisration and the approval of their charters;

(2) Conduct supervision and management of how foundations carry out activities in accordance with these regulations and their charters;

(3) Carry out spot investigations of foundations' activities; internal management; financial receipts, expenses and management; annual work reports; information disclosures, and so forth, and carry out financial audits;

(4) Investigate complaints about foundations made by relevant units and individuals;

(5) Impose administrative punishment on foundations that violate these regulations;

(6) Other duties provided by laws and regulations.

Article 64: The registration management organs have the right to employ the following measures against foundations suspected of having violated these Regulations:

(1) Meet with the foundation's responsible party;

(2) Conduct on-site inspections of foundations' domiciles or the sites where activities occurred;

(3) require foundations to make explanations, to consult and reproduce materials related to the matters, and to seal documents or materials that might be removed, destroyed, concealed or tampered with;

(4) to conduct investigations and question relevant units and individuals regarding situations related to supervision and management;

(5) to inquire into foundations' financial accounts, with the approval of the people's governments at the same level;

(6) Other measures provided by laws and regulations.

No fewer than two employees will conduct on-scene investigations or inspections, and they shall present lawful idetification documents and inspection or investigation notices.

Units and individuals who are being inspected or investigations shall cooperate and shall factually provide relevant documents and materials and must not conceal, refuse or obstruct.

Article 65: Civil affairs departments shall establish logs to record work reports, assessments, credit histories, and irregular activities, and announce relevant conditions to the public on the unified information platform.

Article 66: Professional supervisory units perform the following supervision and management duties over foundations:

(1) Responsible for establishment, amendment, or withdrawal of foundations' registration and the pre-approval review of their charters;

(2) Responsible for foundations' ideological and political work, Party establishment, financial and human resources management, research activities, foreign exchange, and acceptance of foreign donations and funding;

(3) Supervise and guide foundation's compliance with the constitution, laws, regulations, rules, and relevant national policies, and to their charters, in carrying out activities;

(4) Supervise and guide foundations in formulating annual work reports and performing information disclosure obligations;

(5) Assisting the registration management organs and other relevant departments in their investigation of foundations' violations;

(6) Working with other relevant departments to guide foundations in liquidation matters;

(7) Other duties provided by laws or regulations.

Article 67: The relevant departments of people's governments at the county level or above, such as for development and reform, finance, tax, public safety, foreign affairs, human resources and social welfare, and auditing, shall perform supervisory duties over foundations in matters relevant to that field, shall provide relevant services, and shall impose punishments for violations in accordance with law and promptly report them to the registration management organs.

Article 68: Any unit or individual discovering that a foundation has conduct violating laws or regulations may report it to the fondation's registration management organ or other relevant departments.

The public and the news media may conduct supervision of foundation's fundraising activities, the use of donations, and other such circumstances.

Foundations engage in industry self-discipline in accordance with law.

 

Chapter VII: Legal Responsibility

Article 69: The registration management organizations are to order cessation of activities carried out in the name of a foundation that has not registered or activities that continue to be carried out in the name of a foundation that has been deregistered or had its registration certificate cancelled; where there circumstances are serious or cessation is refused, they are to be shut down, have unlawful assets and gains confiscated, and the directly responsible person may be concurrently fined between 1 and 5 times the sum of the illegal gains; and where there are no illegal gains, a fine of between RMB 20,000 and RMB 200,000 may be imposed. Where violations of public security are constituted, a public security administrative sanction is lawfully given; where a crime is constituted, criminal responsibility is pursued in accordance with law.

Article 70: The registration management organs are to deregister foundations that obtained registration through fraud or misrepresentations and fine the responsible person up to RMB 200,000.

Article 71: Where foundations have any of the following situations, the registration management organs order a correction and may give a warning or temporarily suspend activities, and may also order them to dismiss and replace the persons who are directly in charge; where circumstances are serious, the registration certificate is revoked; where it constitutes a violation of public security, it is to be given a public security administrative sanction; and where a crime is constituted, criminal liability is pursued in accordance with law.

(1) Violating the provisions of Article 3 of these Regulations;

(2) Falsifying, altering, leasing, or lending out registration certificates; or leasing, or lending out seals;

(3) Failure to carry out any public interest charitable activities in a continuous 12-month period;

(4) Not following regulations to modify registration, or not following provisions to perform recording of formalities;

(5) Refusing or failure to allow supervision and inspections in accordance with regulations;

(6) Negligently managing branch entities, representative offices, or special project funds resulting in serious consequences;

(7) Violating national regulations on collecting funds, accepting donations, imposing fees, and carrying out activities;

(8) Reporting false or misleading information in accountancy certificates, accounting records, or drafting financial accounting reports;

(9) Having net assets below the the legally prescribed standard for registered assets;

(10) Violating Article 47 of these Regulations;

(11) Other violations of these Regulations.

Where foundations have conduct provided for in the preceding paragraph, the directly responsible party is to be fined between RMB 20,000 and RMB 200,000 by the registration management organs; and where the foundation has illegal profits or unlawful gains they are confiscated.

Article 72: Where foundations carry out activities not in accordance with their purpose and scope of operations listed in their charters, the registration management organs are to order rectification; where corrections are not made within the given time, their registration certificate is revoked and public notice is given; where there are unlawful gains, those unlawful gains are to be confiscated and the directly responsible person may be fined between RMB 20,000 and RMB 200,000.

Article 73: Where foundations receive administrative punishments, the tax organs shall order the re-payment of tax benefits enjoyed during the time of the offence.

Article 74: Where foundations' boards of directors violate the law, regulations or rules, causing harm to the foundation's interests, directors that participated in the decision-making should bear corresponding responsibility to compensate. However, where there is evidence showing their dissenting opinion as recorded on meeting records, that director may have liability waived.

Where foundations' directors, supervisors, and other staff carry out activities in the name of the foundation without the consent of the board of directors, or violate laws, regulations, or rules in the course of carrying out their foundation duties causing harm to the foundations' interests, they shall bear responsibility to compensate.

Where foundations' directors, supervisors or other staff embezzle, misappropriate, retain or take possession of foundation assets, they shall return or refund the illegally taken assets; and where a crime is constituted, criminal liability is pursued in accordance with law.

Article 75: Where foundations are ordered to temporarily stop activities, the registration management organs seal their "registration certificate as a legal person foundation", seals, and financial proofs.

Where foundations' "registration certificate as a legal person foundation" are revoked or cancelled, the registration management organs collect their "registration certificate as a legal person foundation", seals, and financial proofs.

Article 76: Where personnel of registration management organs and other relevant departments abuse their office, or neglect their duties, or use their influence for personal gain, and it constitutes a crime, their criminal liability shall be pursued according to law; where it does not constitute a crime, they shall be given administrative sanctions in accordance with law.

Article 77: Where organizations engaged in asset assessment, capital verification, or certificate verification for foundations provide false or misleading reports regarding, or negligently provide reports with serious omissions, the competent authorities are to handle it in accordance with law.

 

Chapter VIII: Supplementary Provisions

Article 78: Foundations shall apply the relevant provisions of the "Charity Law of the People's Republic of China".

Article 79: Affilliation as used in these Regulations refers to the relationships between foundation founders, the unit that is the source of most directors, a party being invested in, as well other foundations where there is a relationship of control, common control or major influence between individuals or organizations and the foundation.

Article 80: The format of the original and copies of "Certificates of Registration for the Foundation Legal persons", model charters, and the style of important documents and forms relating to the registration and management of foundations are to be formulated byt he Ministry of Civil Affairs under the State Council.

Article 81: The Ministry of Civil Affairs under the State Council will follow relevant laws and regulations to separately provide specific registration and management measures for foundations with elements concerning foreign interests.

Article 82: These Regulations will take effect on September 1, 2016. The "Regulations on Foundation Management" published by the State Council on March 8, 2004, are simultaneously abolished.

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