The Nature And Legal Application Of Private Non Enterprise Units

In 1998,the State Council promulgated the Provisional Regulations on the Registration of Private Non-corporate Units.While providing institutional guarantees for the registration management of private non-enterprise units,it has also played a catalytic role in the social and people’s livelihood areas where private capital has not invested enough in government resources such as education,medical care,and scientific research.However,due to the inadequacy of legislation technology at that time and the "better not more detailed" legislative principle,many of the provisions of the "Regulations" are principled and lack detailed provisions for operability.In addition,no amendments have been made to the 20-year period since the promulgation of the "Regulations",and it has been difficult to deal with the problems that arise in reality.Therefore,it is imperative to reinterpret the nature and application of laws.With the promulgation of the "General Principles of Civil Law," the civil subject status of non-profit corporations and public interest corporations of private non-enterprise units has been determined.However,it is controversial whether civilian-run non-enterprise units are financial corporations.The main reason is that the organizers of some private non-corporate units did not isolate themselves from legal entities after completing their capital contribution activities.Instead,they continued to participate in the management of legal persons through various means.They actually enjoyed the rights of shareholders or members,which was related to the financial corporations.The nature does not match.Therefore,it is still necessary to start from the improvement of the legislation and the governance structure of private non-enterprise units,so that it truly fits in with the corporate legal person system.In the process of setting up a private non-enterprise unit,it should pay attention to its constitution and registered capital.The registered capital should be paid and the minimum amount should be set.At the same time,the state-owned assets should be strictly limited to private non-enterprise units.The Council cannot be given the rightto amend the bylaws on its own initiative.The amendments to the bylaws must be made by the competent authority.There must be objective conditions for the change of circumstances and full consideration of the donor’s intentions.The people-run non-enterprise units should set up a board of directors as an executing agency,and regulate the election and replacement of directors and the rules of procedure of the council.The responsibility of the organizer is different from that of the company and the foundation.On the one hand,the organizers of private non-enterprise units are more involved in the operation and management of legal persons,and should refer to the responsibilities that the organizer should assume in accordance with the provisions of the "Company Law." On the other hand,since private non-enterprise units often engage in public welfare undertakings such as education and medical care,when they use legal person property to repay their own debts,they need to balance the interests of creditors and the non-profit organization’s public welfare characteristics.According to the provisions of the "Company Law" and the "Promotion of Private Education Promotion Law," the cancellation of private non-enterprise units can be broadly classified into three categories.They are self-requested cancellations,forced cancellations,and cancellations after bankruptcy liquidation.The provisions of the "Regulations" are mainly directed at the situation where private non-enterprise units cancel their own records.The cancellation of a private non-enterprise unit or the cancellation of a permit is a condition for compulsory cancellation.After the people-run non-enterprise unit is forcibly cancelled,the organ that made the compulsory cancellation decision shall organize the liquidation within 15 days.Under the current legal provisions,private non-enterprise units have not been given bankruptcy,but for the protection of creditors’ interests and the need to promote the development of private non-enterprise units,private non-enterprise units should be allowed to conduct bankruptcy liquidation in accordance with the “Enterprise Bankruptcy Law”.