The Ministry of Finance ("MOF") and the Publicity Department of the CPC Central Committee have recently issued the Implementing Proposals for the Restructuring of the Corporate System of Central Cultural Enterprises (the "Proposals").
The Proposals state that by the end of 2018, central culture enterprises that are registered under the Law of the People's Republic of China on Industrial Enterprises Owned by the People and for which the MOF performs investors' duties on behalf of the State Council, will all be restructured into limited liability companies registered under the Company Law of the People's Republic of China. For this purpose, the Proposals map out a serious of tasks, including the standardized operation, policy support, and coordinated progress. According to the Proposals, it is necessary to ascertain the registered capital; if a central culture enterprise is reshaped into a wholly State-owned company or a subsidiary wholly owned by a State-owned enterprise or a State-owned holding enterprise, the central culture enterprise's audited net assets for the last year may serve as the basis to determine the paid-in registered capital of the restructured company when changes are made to the previous registration before the administration for industry and commerce. Furthermore, the corporate governance structure shall be designed in a scientific manner, and the number of leaders holding posts in a central culture enterprise shall be finalized in a reasonable way and be strictly controlled, being appropriate to the enterprise scale and not exceeding the current number of positions. The positions of the board chairman, the secretary of the party organization, and the legal representative, of a central culture enterprise, shall be held concurrently by one person.