The draft, composed of 54 articles arranged in four chapters, has been recently finalized and submitted by the Ministry of Finance to the Government.
It would apply to State companies including independent State companies, State corporations and independent cost-accounting companies of corporations set up by the State.
The paper has been formulated on the basis of inheriting current regulations, aiming to further clarify the decentralization of responsibilities to the companies’ owners, managing boards and directors.
Regarding the responsibilities of companies’ owners, the paper stipulates that the owners must invest charter capital in their companies within two years after the companies’ establishment.
Under current regulations, companies may decide on capital borrowing by their own, regardless of loans’ value. However, when the new regulations are issued, loans higher than the companies’ charter capital must be reported to the managing boards, if any, or the companies’ owners for approval.
For State companies, according to the draft, the right to make decisions on investment outside the companies, including overseas investment, contribution of capital to joint ventures with foreign partners and purchase of companies of other economic sectors, and on capital construction investment projects would be decentralized to the companies’ owners, their managing boards or directors, depending on the value of the projects.
Regarding the management of turnovers, expenses and business results, the draft permits the companies’ general directors or directors to decide on the depreciation level, which, however, must not be lower than the level prescribed by the Finance Ministry.
The draft annuls limits on advertisement expenses and allows enterprises to make payment based on their actual costs.