Provisional Rules On Enterprise Information Disclosure And Their Implications

China's State Council approved the Provisional Rules on Enterprise Information Disclosure (企业信息公示暂行条例) (the Disclosure Rules) on July 23, 2014, which take effect on October 1, 2014.¹ The Disclosure Rules apply to all companies registered in the People's Republic of China, including foreign invested enterprises (FIEs), and are part of a larger process under China's new leadership to accomplish three broad goals: (i) foster economic growth by reducing unnecessary burdens on companies and giving them greater flexibility; (ii) reduce reliance on the static concept of registered capital (capital paid in or committed to be paid in) as a measure of company creditworthiness; and (iii) collect and release to the public more information about companies so the market, rather than officials, can determine who succeeds and who fails.