China

Financial Reporting Obligations for Companies in China

1. Registry for Financial Statements Submission

In China, companies are required to submit their financial statements to the 国家企业信用信息公示系统 (National Enterprise Credit Information Publicity System) (http://www.gsxt.gov.cn). The system is maintained by the State Administration for Market Regulation (SAMR) (http://www.samr.gov.cn).

Public Access to Financial Statements:

In China, financial statements of listed companies are publicly available and can be accessed through the official disclosure platform of the China Securities Regulatory Commission (CSRC) and the Shanghai/Shenzhen Stock Exchanges.

However, financial reports of private companies (LLCs and other non-listed entities) are not publicly accessible. Such reports are only submitted to the authorities (e.g., tax and regulatory bodies) and are not available to the general public unless disclosed voluntarily.

2. Legal Forms Obliged to Publish Financial Statements

The following legal forms must publish financial statements:

  • 有限责任公司 (Limited Liability Company)
  • 股份有限公司 (Joint Stock Company)
  • 外商投资企业 (Foreign-Invested Enterprise, including Wholly Foreign-Owned Enterprises and Joint Ventures)

Legal forms not obliged to publish financial statements include:

  • 个人独资企业 (Sole Proprietorship): Typically small and not required to disclose their financials.
  • 合伙企业 (Partnership): Depending on their size and scope, partnerships might not be required to publicly disclose financials unless stipulated by specific regulations.

3. Companies Required to Audit Financial Statements

Auditing requirements are generally based on the legal form and the size of the company. Here is a summary:

Legal Form (Chinese) Legal Form (English) Rule Criteria
有限责任公司 Limited Liability Company Mandatory audit Audit required if turnover exceeds RMB 20 million; total assets exceed RMB 10 million; or employees exceed 50.
股份有限公司 Joint Stock Company Mandatory audit Always required regardless of size.
外商投资企业 Foreign-Invested Enterprise Mandatory audit Always required regardless of size.

4. Stock Exchange for Listed Companies

For companies listed on Chinese stock exchanges, financial statements must be published on the respective stock exchange where they are listed. Oversight is provided by the China Securities Regulatory Commission (CSRC) (http://www.csrc.gov.cn):

  • 上海证券交易所 (Shanghai Stock Exchange)
  • 深圳证券交易所 (Shenzhen Stock Exchange)
  • 北京证券交易所 (Beijing Stock Exchange)

5. Deadline for Submitting Financial Statements

The deadline for submitting financial statements is typically within six months after the end of the fiscal year (which ends on December 31). Therefore, the deadline is usually June 30 of the following year. In some provinces, local authorities may require earlier submission (e.g., by April 30).

6. Partial Financial Statements Submission

Certain smaller companies or companies in specific sectors may only be required to submit simplified or partial financial statements. For example, sole proprietorships and small partnerships might submit only a balance sheet and profit and loss statement without detailed notes.

7. Consequences of Not Submitting Financial Statements on Time

Failure to submit financial statements on time can result in fines and penalties. In severe cases, the company may be listed as “abnormal” on the public registry, which can lead to difficulties in obtaining credit or conducting business. Continuous non-compliance may eventually result in the company being struck off the register. Non-compliant companies may also be blacklisted in the national Joint Sanction System, which restricts access to government procurement, financing, and public tenders.

8. Requirements for Foreign-Owned Branches or Newly Established Companies

Foreign-owned branches and newly established companies must comply with the same reporting requirements as domestic companies. Additionally, foreign-owned entities must file annual foreign exchange reports with the State Administration of Foreign Exchange (SAFE) (http://www.safe.gov.cn). Newly established companies must ensure their initial financial statements cover the period from incorporation until the end of the fiscal year.

Sources

Source Link
Ministry of Finance of the People's Republic of China http://www.mof.gov.cn
National Enterprise Credit Information Publicity System (国家企业信用信息公示系统) http://www.gsxt.gov.cn
State Administration for Market Regulation (SAMR) http://www.samr.gov.cn
China Securities Regulatory Commission (CSRC) http://www.csrc.gov.cn
Shanghai and Shenzhen Stock Exchanges http://www.sse.com.cn, http://www.szse.cn
State Administration of Foreign Exchange (SAFE) http://www.safe.gov.cn
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