Interim Measures for the Definition of Property Rights of State-owned Assets of Collective Enterprises

Chapter I General Provisions Article 1 In order to further clarify the property rights relations, establish a modern enterprise system adapted to the socialist market economic system, promote the consolidation and development of the public ownership economy, and safeguard the legitimate rights and interests of the owners of state-owned assets and collective assets, these Measures are formulated in accordance with the relevant provisions of the state. Article 2 The definition of property rights of state-owned assets of collective enterprises as mentioned in these Measures (hereinafter referred to as the definition of property rights) refers to the state's division and determination of the ownership of state-owned assets existing in collective enterprises according to law, and defines the state's property scope and management authority as the legal act of owners exercising rights over these state-owned assets. Article 3 These Measures shall apply to the definition of assets and property rights of various urban collective enterprises (including cooperatives) registered as collective ownership. Article 4 The definition of property rights follows the principle of "whoever invests owns the property rights", that is, the property rights are defined from the original source of assets. As the main body of investment, the state still enjoys the ownership of state-owned assets in collective enterprises before transferring the ownership of assets. Article 5 In the process of defining property rights, we should follow the working principle of "strengthening management in the future and properly handling problems left over from history", seek truth from facts, and be fair and just. To safeguard the legitimate rights and interests of the owners of state-owned assets, and not to harm the legitimate interests of the owners of collective enterprises. Article 6 The definition of property rights shall maintain the continuity and coordination of national laws, regulations and policies on collective economy. Seventh state-owned assets of collective enterprises must be defined and accounted for. Chapter II Definition of State-owned Assets of Collective Enterprises Article 8 The definition of ownership of state-owned assets of collective enterprises invested by enterprises, institutions and state organs owned by the whole people, and collective enterprises that are not owned by units owned by the whole people but are actually supported and funded by units owned by the whole people in the form of money, physical objects and intangible assets shall be handled in the following ways:

(1) Where the currency, physical objects, land use rights and intellectual property rights owned by the whole people belong to the state, the definition of the ownership of assets of enterprises registered in the name of collective ownership shall be handled in accordance with the Provisions on the Definition of Property Rights of State-owned Enterprises. However, unless it is granted free of charge according to the provisions of the laws and regulations of the state on the management of state-owned assets or the state-owned assets management department agrees.

(2) For a newly-built enterprise, the start-up funds are all raised by the national unit in the form of bank loans and loans, and the production and operation registration is collective in nature, the provisions of the preceding paragraph shall apply to the definition of property rights of its assets.

(3) The state-owned assets invested by units of the whole people in collective enterprises and the asset income that should be obtained according to the investment share (or agreement) are defined as state-owned assets.

(four) units under ownership by the whole people invest funds or equipment in collective enterprises in various forms such as funding and support. If there is no agreement on investment or creditor's rights at the time of investment, it shall generally be regarded as the nature of investment. In case of dispute, both parties can re-establish the legal relationship through consultation and go through relevant formalities. If negotiation fails, it shall be defined by the state-owned assets management department in conjunction with relevant departments. However, the following situations are not regarded as investment relations:

Anything invested before 1. 1979 can be regarded as an advance;

2. If a collective enterprise pays depreciation and other expenses on schedule, it can be treated as a lease relationship. Ninth collective enterprises in the development process, the use of bank loans, state loans and other borrowing funds to form assets, state units only provide guarantees, not defined as state-owned assets. However, those who perform joint and several liabilities shall be recovered by units owned by the whole people. If collective enterprises are really unable to return on time, they can be converted into investment through mutual cooperation. The part converted into investment is defined as state-owned assets. Article 10 The assets formed by collective enterprises enjoying preferential tax reduction and exemption according to unified national laws, regulations and policies are not state-owned assets. Eleventh collective enterprises in the initial stage of establishment or in the process of development, enjoy the special preferential policies of tax reduction and exemption given by the state. Where the tax reduction and exemption agreed with the state belongs to the state support fund and special management is implemented in the implementation of the policy, it is defined as supportive state-owned assets and reflected separately. Twelfth collective enterprises enjoy the pre-tax repayment of loans, tax repayment of loans and other special preferential policies to form assets, of which the unpaid part of the national tax receivable is defined as supporting state-owned assets, which are reflected separately. Thirteenth collective enterprises occupy urban land free of charge, land ownership belongs to the state, enterprises can use it with compensation, and it will be recorded separately after definition. Article 14 Assets defined as state-owned assets shall be calculated according to their proportion in the total assets of an enterprise. Fifteenth in addition to the above provisions, the following assets in collective enterprises are not defined as state-owned assets:

(a) the physical assets formed by the state and the funds allocated to welfare enterprises for the disabled;

(2) Physical assets such as idle equipment allocated by state units when the labor employment service enterprise is established;

(3) Assets formed by employees of state units bringing their own patents and inventions into collective enterprises;

(four) clearly agreed to support the development of collective enterprises into loans or leased assets;

(five) other assets that are not recognized as state-owned. Chapter III Use and Management of State-owned Assets in Collective Enterprises Article 16 The ownership of state-owned assets defined in collective enterprises belongs to the state, and enterprises have the property rights of legal persons. Except for legal circumstances such as property rights transfer, collective enterprises can continue to use them, and the state may not withdraw state-owned assets.