Notice of Shanghai Municipal People’s Government on Printing and Distributing the Procedures of Shanghai Municipality on Classified Licensing and Registration Administration of Non-governmental Schools

(December 26, 2017)

SMPG G [2017] No. 95

Chapter I  General Provisions

Article 1(Basis of Formulation)

These Procedures are formulated in accordance with the Decision of the Standing Committee of the National People’s Congress to Revise the Law of the People’s Republic of China on Promoting Non-governmental Education, the Law of the People’s Republic of China on Promoting Non-governmental Education, the Opinions of the State Council on Encouraging Social Forces to Initiate Education and Promote Non-governmental Education to Develop Healthily, the Opinions on Strengthening Party Building in Non-governmental Schools (for Trial Implementation), the Detailed Implementation Rules for Classification and Registration of Non-governmental Schools, the Detailed Implementation Rules for Supervision and Administration of For-profit Non-governmental Schools, and other laws, rules, regulations and policies, and in the light of the actual circumstances of this Municipality.

Article 2 (Basic Principles)

It is imperative to implement the spirit of the State on encouraging social forces in initiating education and pushing forward the reform of classified administration of non-governmental education, to improve relevant laws, rules and regulations of this Municipality on non-governmental education, to standardize non-governmental schools’ ways of school running, and to promote healthy development of non-governmental education, so as to serve local economic and social development.

Relevant functional departments of the municipal and district people’s governments shall conduct classified administration of non-governmental schools according to law, and provide guidance and service for non-governmental schools according to the requirements for openness, impartiality, fairness and convenience.

Article 3 (Application Scope)

These Procedures apply to the activities of organizations or individuals other than state institutions that use non-state-fiscal funds to run schools and other educational institutions for the public (hereinafter referred to as the non-governmental schools) within the administrative area of this Municipality. Where these Procedures have no provisions, relevant laws, rules, regulations and policies shall apply.

Article 4 (Authority)

The municipal education department shall ensure that such work as overall planning, comprehensive coordination, macro administration and policy formulation for non-governmental education is well done, and such departments as human resources and social security, civil affairs, industry and commerce administration, and other relevant departments shall be responsible for the work relevant to non-governmental education within their respective authority.

The municipal and all district departments of education, and human resources and social security are the licensing and competent departments in charge of the corresponding non-governmental schools (hereinafter collectively referred to as the licensing departments), which shall be responsible for planning and licensing the said schools.

The municipal and all district departments of civil affairs, and industry and commerce administration (market supervision and administration) are the departments for registering the corresponding non-governmental schools (hereinafter collectively referred to as the registering departments), which shall be responsible for registering non-governmental schools as legal persons.

The municipal and all district functional departments shall, according to their respective functions and duties, conduct supervision and administration of all non-governmental schools according to law.

Article 5(Basic Process)

A non-governmental school shall not, according to the provisions of relevant laws, rules and regulations, be established, unless its planned or official establishment has been approved by the licensing department, and, after the school has obtained the license for school establishment, shall undergo the registration procedure with the corresponding registering department.

Chapter II  Establishment

Article 6(Principles of Establishment)

Establishment of non-governmental schools shall comply with the requirements of the social, economic and educational development of the State and this Municipality, meet the corresponding conditions, and comply with the provisions of this Municipality on legal-person-registration administration. The organizer may independently choose to establish non-profit or for-profit non-governmental schools, but shall not establish for-profit non-governmental schools to provide compulsory education.

The organizer of a non-profit non-governmental school shall not reap a profit from running the school, and the balance from school running shall all be used for further school running.

The organizer of a for-profit school may reap a profit from running the school, and the balance from the school running shall be handled according to the Company Law and other relevant laws, rules and regulations.

Article 7(The Power of Examination and Approval)

Establishment of non-governmental schools that provide pre-school education, compulsory education, senior middle school education, and secondary and below-secondary occupational technical academic education and that engage mainly in cultural training shall all be examined and approved by the education department of the district where the school is located and be filed with the municipal education department.

Establishment of non-governmental schools that provide higher academic education shall be handled by the municipal education department in a unified manner and be reported to the Municipal People’s Government for examination and approval before being filed with the state education department.

Establishment of non-governmental schools that mainly provide occupational qualification training and occupational skill training which focus on occupational skills shall be examined and approved by the district human resources and social security department according to relevant laws, rules and regulations, be filed with the municipal human resources and social security department, and be forwarded to the education department at the same level for record.

Where laws, rules or regulations otherwise provide for the power of examination and approval, such provisions shall prevail.

Article 8(Conditions for Establishment)

Organizations or individuals other than state institutions which have the economic strength matching the level, type and scale of planned non-governmental schools may run such non-governmental schools independently or jointly. In the case of a jointly-run school, an agreement of joint school running shall be signed according to law.

An organization that applies to run a non-governmental school shall have the qualifications of a legal person and good credit status.

An individual that applies to run a non-governmental school shall have the nationality of the People’s Republic of China, good credit status, political rights and full capacity for his/her civil conduct.

To make capital contribution for school running, the organizer of a non-governmental school may contribute money as capital and may also use material objects, intellectual property rights, land-use right and other non-monetary property that can be evaluated in terms of money and can be transferred according to law, and shall abide by relevant provisions on legal person registration, except the property that shall not be used for capital contribution according to laws, rules or regulations. Where the organizer participates in running a non-governmental school with State-owned assets, relevant procedures shall be undertaken according to the provisions on supervision and administration of State-owned assets; where the school running belongs to the category of foreign investment, relevant procedures shall be undertaken according to the Regulations of the People’s Republic of China on Chinese-Foreign Cooperation in Running Schools, theCatalogue for Guiding Foreign-Invested Industries and other provisions of the State and this Municipality.

A non-governmental school shall meet the requirements for a legal person, comply with the establishment standards in terms of the content and scale of school running, and comply with the relevant requirements for legal person registration.

Article 9(Name of School)

The name of a non-governmental school shall comply with relevant provisions on legal person registration. A non-governmental school may only use one name, which shall be made up of the following parts in this order: the name of the administrative district, the number, the level, and the type of the school. The name of a non-governmental school shall not damage the social public interests or run counter to social morality, and its foreign name shall have the same meaning as its Chinese name.

The name of a for-profit non-governmental school shall also include a corporate organization form such as “Limited Liability Company” or “Incorporated Company”. When applying for planned or official establishment of a non-governmental school that provides academic education or a non-governmental kindergarten, the applicant may apply to the licensing department for using an abbreviated name, and the latter shall note the abbreviated name in the written approval of the planned establishment or in the school-running license. The abbreviated name may omit the corporate organization form of the school, and may only be used in the school plaque, report cards, diplomas, formal schooling documents, and enrollment advertisements and prospectuses. If it is used in the enrollment advertisements and prospectuses, the for-profit nature of the school shall be noted in a conspicuous place and the full name of the school shall be noted in the introduction to the school.

If a non-governmental school that was registered as a non-governmental non-enterprise legal person before the effectiveness of these Procedures remains a non-profit non-governmental school and has not changed its name, then its original name may still be used.

Article 10(Planned School Establishment)

1. Application for planned establishment

To apply for planned establishment of a non-governmental school, the organizer shall file a written application and submit the application materials according to relevant provisions to the licensing department after the registering department confirms the school name, and shall be responsible for the truthfulness and completeness of the application materials. The materials shall mainly include:

The school name, the qualifications of the organizer, the training objectives, the scale, level, form, conditions and content of the schooling, the internal management system, fund raising, management and use, asset information and valid certification, the materials about the Party organization, and other materials provided by laws, rules and regulations. In the case of assets from donations, the donation agreement and relevant valid certificates shall be submitted; in the case of a jointly-run non-governmental school, the agreement on joint school running shall be submitted. In the case of the organizer of a non-government school who re-applies for running a for-profit non-governmental school, he/she shall submit relevant materials according to the provisions of the Detailed Implementation Rules for Supervision and Administration of For-profit Non-governmental Schools.

2. Application Handling

Upon receiving an application for planned establishment of a non-governmental school filed by the organizer, the licensing department shall examine the application materials according to law, and handle it according to the following different cases:

(1)Where the application matter does not fall within the authority of the said department, it shall notify the applicant to apply to the relevant administrative department;

(2)Where the application materials are not complete or do not comply with the statutory form, it shall notify at one time, and on the spot or within five working days, the applicant of all the contents that need to be supplemented or corrected;

(3)Where the application materials are complete and comply with the statutory form, or the applicant submits all the supplemented or corrected application materials as required by the competent department, the competent department shall accept and handle the application.

3. Examination and approval

Where the application is accepted, the licensing department shall, within 30 days from accepting the application for planned establishment, make a decision of whether to approve it or not in writing. If approving the establishment, the licensing department shall issue the written approval of the planned establishment; if not approving the establishment, it shall explain the reasons in writing and notify the applicant of the channels for relief.

4. Time limit for planned establishment

The organizer of a non-governmental school may file an application for official establishment if it finishes the planned establishment within three years from the date of receiving the written approval of the planned establishment. It shall make a new application if it fails to finish the planned establishment within three years from the said date.

Article 11(Official Establishment)

1. Applying for establishment

To apply for official establishment of a non-governmental school, the organizer shall file a written application to the licensing department after the registering department confirms the name, submit the updated materials provided in Item 1, Article 10 of these Procedures according to relevant provisions and the actual situation of the planned establishment, and also submit the following materials: the application for the official establishment, the materials about the approval of the planned establishment and the report of the planned establishment, the school constitution, the school premises and the effective certificates of funds and assets, the name lists of shareholders or board of shareholders, the first board of directors or council, supervisors or board of supervisors and their identity certificates, and the qualification certificates of the president and other staff members.

If the schooling conditions have been met and relevant establishment standards have been reached, the organizer may directly apply for official establishment of a non-governmental school, and submit all the application materials except the written approval of the planned establishment.

2. Handling of the applications

Upon receiving an application for official establishment of a non-governmental school filed by the organizer, the licensing department shall examine the application materials according to law, and handle the application according to the following different cases:

(1) Where the application matter does not fall within its authority, it shall notify the applicant to apply to the relevant administrative department;

(2)Where the application materials are not complete or do not comply with the statutory form, it shall notify at one time, on the spot or within five working days, the applicant of all the contents that need to be completed or corrected; and

(3)Where the application materials are complete and comply with the statutory form, or the applicant submits all the supplemented or corrected application materials as required by the competent department, the competent department shall accept and handle the application.

3. Examining and approving

Upon accepting an application for official establishment of a non-governmental school, the licensing department shall organize experts or entrust an education assessment agency with the corresponding qualifications to conduct examination and evaluation or conduct assessment and feasibility study of the application materials, the actual schooling conditions and capability, and the said experts or agency shall issue a written report thereon. The expenses for the examination and evaluation or the assessment and feasibility study shall be borne by the licensing department.

The licensing department shall, according to the provisions of relevant laws, rules and regulations and these Procedures, within three months from the day of application acceptance, make a decision on whether to approve official establishment of the non-governmental school in writing. In the case of an application for official establishment of a non-governmental institution of higher education, the said department shall, within six months from the day of application acceptance, make a decision of whether to approve it in writing. In the case of non-approval, it shall explain the reasons in writing and notify the applicant of the channels for relief.

4. Certificate Issuing and Filing

For non-governmental schools approved to be established, the licensing department shall issue the school-running license according to the nature of the schools. The human resources and social security department shall forward its approval to the same-level education department for filing, the district education department shall submit the approval materials to the municipal education department for filing, and the municipal education department shall submit the approval of a non-governmental institution of higher learning to the state education department for filing. All licensing departments shall publicize such information as the names, addresses, presidents, levels, types, natures, and schooling contents of the non-governmental schools approved to be established via such media as the government website.

Article 12(Legal-Person Registration)

After a non-governmental school obtains a school-running license, the applicant shall, according to the provisions of laws, rules and regulations and according to the schooling level, type and nature, apply to the corresponding registering department for legal person registration. In the case of a qualified non-governmental school, the registering department shall make legal person registration according to law and issue such certificates as the registration certificate or the license; in the case of an unqualified school, the said department shall not make the registration and shall explain the reasons to the applicant in writing. If a non-governmental school fails to finish the legal person registration within the period of the planned establishment or after obtaining the school-running license, it shall not conduct education and teaching activities in any name.

A non-profit non-governmental school approved to be established that complies with relevant provisions of the State and this Municipality may undergo the legal person registration procedures with the civil affairs department; a for-profit non-governmental school approved to be established shall undergo the legal person registration procedures with the industry and commerce (market supervision and administration) department.

Article 13(Certificate Administration)

Non-governmental schools shall obtain relevant certificates for school running and legal person registration and conduct education and teaching activities according to the content and business scope noted in such certificates. The certificates must be publicized in a conspicuous place of a public area of the non-governmental schools. Those that lose the certificate shall make an announcement immediately and go through the formalities with the certificate-issuing department promptly for a new certificate. They shall not rent or lend relevant certificates in any name.

A non-governmental school that needs to extend the valid period of its school-running license shall file an application to the corresponding licensing department 30 working days before the expiry of the valid period of the said license. The licensing department shall, according to the application, and before the expiry of valid period of the said license, make the decision of whether to approve the extension; if it does not make such a decision within the said period, it shall be deemed as approving the extension. If the valid period of the school-running license expires without being extended, the licensing department shall handle the cancellation formalities according to law.

Chapter III  Organization Structure

Article 14 (The Party Organization)

The Party organizations at all levels shall improve the Party organization setup of non-governmental schools, perfect the guarantee mechanism of the Party organization work, and give play to the political core role of the Party organization.

The Party organizations at all levels shall ensure the Party organization secretaries of non-governmental schools are elected and managed well. The Party organization secretaries of non-governmental institutions of higher learning shall also work as government supervisors. It is imperative to strengthen leadership over the Party building at non-governmental schools and take Party building as the necessary requirement and must-check content in license registration, annual check and auditing, assessment and evaluation, and administration and supervision of non-governmental schools.

A non-governmental school shall establish and improve the mechanism for the Party organization to participate in decision-making and supervision and include relevant content of Party organization building into the school constitution. The school shall facilitate leading members of the Party organization to enter the school decision-making and administration group. The Party organization secretary shall enter the school council or board of directors by statutory procedures. The leading members of the Party organization shall enter the administration group according to the school constitution, and such administration leaders as Party-member president and vice presidents may enter the Party organization leadership according to relevant provisions of the Party.

Article 15 (Councils and Boards of Directors)

Non-governmental schools shall, according to the provisions of relevant laws, rules, regulations and their constitutions, set up councils, boards of directors, or decision-making institutions in other forms.

The members, the number of the members and their qualifications, and the selection procedures and the functions and powers of the council or board of directors of a non-governmental school shall comply with the provisions of relevant laws, rules, regulations and the school constitutions. The members shall be made up of such people as the organizer or his/her representative, the president, the person in charge of the Party organization, and staff representatives, and may also include education experts and social celebrities. The members of the first council or board of directors and their titles shall be chosen by the organizer, and if members need to be changed, it can be handled according to the provisions of Clause 2, Article 25 of these Procedures.

The rules of procedure of the council or board of directors of a non-governmental school shall be provided in the school constitution according to law, defining such contents as the ways of calling and convening convocations, the form of vote, the requirements for adopting discussed matters, and the ways of deciding major matters.

Article 16(Legal Person)

The legal person of a non-governmental school shall be the chairman of the council or board of directors, or the president, and shall comply with the provisions of relevant laws, rules, regulations and the school constitution.

Article 17 (President)

The council or board of directors of a non-governmental school shall employ a full-time president according to law, and the president shall be responsible to the council or board of directors.

The president shall have the nationality of the People’s Republic of China, the political rights and full capacity for his/her civil conduct, live permanently in the Chinese mainland, have good personal credit status, be familiar with education and relevant laws, rules and regulations, be no more than 70 years old in general, have over five years’ experience in education management and have other qualifications provided by relevant laws, rules, regulations and the setup standards.

The president shall, according to the provisions of laws, rules, regulations and the school constitution, independently exercise his/her power in education, teaching and administrative management.

Article 18(Supervisor System)

A non-governmental school shall set up supervisors or a supervisors’ committee; and the members, their structure, selecting method, term of office, basic functions and duties, and rules of procedure shall comply with the provisions of relevant laws, rules, regulations and the school constitution.

Article 19(Mass Organizations)

A non-governmental school shall actively support such mass organizations as the trade union, the communist youth league, the women’s federation, the staff (representatives) congress and the student representatives’ congress to be established and to carry out their activities according to law, and shallensure their legal, orderly and wide participation in the school’s democratic management and supervision.

Article 20(Other Internal Management Matters)

A non-governmental school shall formulate its school constitution and various internal management rules according to law. A for-profit non-governmental school shall also set up the board of shareholders or the general meeting of shareholders so that they can fulfill their statutory functions and duties. Those who have criminal records or have no or limited capacity for their civil conduct shall not hold a post on the school council, board of directors, supervisors’ committee or administrative institution. A natural person shall not work as both a member (or director) of the council and a supervisor of one and the same school.

Chapter IV  Change and Termination

Article 21 (Change of the Organizer)

Where the organizer of a non-governmental school changes, upon the current organizer’s proposal, the financial settlement, and the approval of the council or board of directors, the said school shall file a written application and submit the application materials to the licensing department. If the inheritor, the property-division inheritor or the donee of the organizer of a for-profit non-governmental school obtains the rights and interests of the said organizer due to inheritance, property division, or donation, the formalities of organizer change shall be undertaken according to law.

The licensing department shall examine the organizer change at the non-governmental school, and shall issue a new school-running license if it approves the change, and withdraw the original school-running license.

Where the name of the organizer of a non-governmental school changes, the school shall, within 30 days, report that to the licensing department for record and apply for a new school-running license.

After obtaining the new school-running license, the non-governmental school shall go through such relevant formalities as legal person registration in a timely manner according to law.

Article 22(Division and Merger)

Division and merger of non-governmental schools require financial settlement, and after the council or board of directors makes a decision, a written application shall be filed to the licensing department; and in the case of for-profit non-governmental schools, the provisions of relevant laws, rules and regulations such as the Company Law shall also be complied with; if a change of the organizer is involved, relevant formalities shall be undertaken according to the provisions of Article 21 of these Procedures.

In the case of an application for division or merger of non-governmental schools, the licensing department shall reply in writing within three months from the day of acceptance; in the case of application for division or merger of non-governmental institutions of higher learning, the licensing department shall reply in writing within six months from the day of acceptance.

If the licensing department approves the division or merger of non-governmental schools, it shall issue a new school-running license to the said schools and withdraw the original school-running license. The said schools shall go through such relevant formalities as legal person registration in a timely manner.

Divided or merged non-governmental schools shall comply with the corresponding setup standards. Non-governmental schools shall not be divided into schools with different natures of school running, and schools with different natures of school running shall not be merged.

Article 23(Change of the Level and Type)

Where a non-governmental school changes its level or type of school running, it shall file a written application to the licensing department after the council or board of directors makes such a resolution.

The licensing department shall examine the application for a change of a non-governmental school, and reply in writing within three months from the day of acceptance; in the case of application for change into an institution of higher learning, the licensing department shall reply in writing within six months from the day of acceptance.

If approving the change upon examination, the licensing department shall issue a new school-running license to the non-governmental school and withdraw the original school-running license. The said school shall go through such relevant formalities as legal person registration in a timely manner according to law.

A non-governmental school with a change in its level and type of school running shall comply with the corresponding setup standards.

Article 24(Change of the Premises)

Non-governmental schools shall conduct education and teaching activities in the premises examined and approved by the licensing department.

Where a non-governmental school changes its address of school running, it shall file a written application to the licensing department. If approving the change upon examination, the licensing department shall issue a new school-running license or other certificates to the said school.

Where the change of the address of a non-governmental school involves change of legal person registration, it shall, upon obtaining the new school-running license or other certificates, go through such relevant formalities as legal person registration in a timely manner according to law.

The school-running premises of a non-governmental school shall comply with the corresponding setup standards.

Article 25(Other changes)

Change of the school name: where a non-governmental school needs to change its name, the council or the board of directors shall make a resolution, and the said school shall file an application to the licensing department after the registering department has confirmed the name. If approving the change upon examination, the licensing department shall issue a new school-running license to the said school and withdraw the original school-running license. The said school shall, upon obtaining the new license, go through such relevant formalities as legal person registration in a timely manner according to law. The school after the name change shall comply with the corresponding setup standards.

Change of the councilors or directors: if the council or the board of directors of a non-governmental school finishes its term of office, the recommenders change the recommended persons, or the qualifications of the members change, then a new council or board shall be established in a timely manner, or work shall be carried out to change the members and their posts; and within 30 days after the in-office council or board of directors makes the resolution, the name list of the changed members and their posts shall be submitted to the licensing department and the registering department for record.

Change of the president: where the term of office of the president of a non-governmental school expires, or it does not expire but the qualifications for the post change, the school council or the board of directors of the said school shall dismiss the president and appoint a new president in a timely manner according to law. The president that complies with the school requirements and has the corresponding qualifications may continue to be engaged. The said school shall, within 30 days from the council or the board of directors’ dismissal or appointment, apply to the licensing department for a new school-running license.

Change of the legal representative: where a non-governmental school needs to change its legal representative, it shall receive an audit of its economic responsibility according to law, and go through such relevant formalities as legal person registration according to law within 30 days after the council or the board of directors makes the resolution of the change.

Change of the supervisor: where a non-governmental school needs to change its supervisor, it shall, according to the provisions of relevant laws, rules, regulations and the school constitution, invite all parties to recommend a supervisor, and relevant materials shall be filed for reference.

Revision of the constitution: revision of the constitution of a non-governmental school shall, after the council or the board of directors makes a resolution of revision, go through the approving and filing formalities according to the provisions of relevant laws, rules and regulations.

Article 26(Change of Information)

Where a non-governmental school’s proposed change of information has been examined and approved, the said school and the licensing department shall update the relevant information in the non-governmental education management system, and ensure a good job in information disclosure according to law.

Article 27(Termination)

A non-governmental school shall not be terminated without complying with laws, rules, regulations and the school constitution. When it is terminated, such work as arrangement of the staff members and the students, financial settlement, property settlement, security and stability shall be properly handled. If a non-governmental school providing compulsory education is terminated, the education department shall assist the school in arranging the students in continuing their school education.

Article 28(Asset Disposition)

When a non-governmental school is terminated, financial settlement shall be conducted according to law. If the termination is required by the said school itself, the school shall organize the settlement; if cancellation of the school is initiated by the licensing department according to law, the said department shall organize the settlement; if the termination is caused by inability to continue school running for insolvency, the people’s court shall organize the settlement.

The remaining property after the relevant debt is paid off according to law shall be handled according to relevant provisions and the school constitution. A non-profit non-governmental school’s remaining property after the relevant debt is paid off shall be used to run other non-profit non-governmental schools according to the provisions of the school constitution or the resolution of the council or the board of directors, and shall not be distributed to the organizer; if it can’t be handled according to the provisions of the school constitution or the resolution of the council or the board of directors, the licensing department shall transfer it to other non-profit non-governmental schools, and a public announcement thereon shall be made. A for-profit non-governmental school’s remaining property after the debt is paid off shall be handled according to relevant provisions of the Company Law.

Article 29 (Procedure of Cancellation)

When it is terminated, a non-governmental school shall go through the formalities of canceling its school-running license and legal person registration, and return the school-running license, the legal person registration certificate, and the stamps respectively to the licensing department and the registering department.

The licensing department shall notify the registering department of its decision to approve termination of a non-governmental school or cancellation of the school-running license, and publicize that via such media as the government website. Meanwhile, the district education department shall submit the relevant decisions to the municipal education department for record, and the district human resources and social security department shall notify the same-level education department of the relevant decisions.

Chapter V  Established Schools

Article 30 (Transitional Arrangements for the Existing Schools Registered as Non-governmental Non-Enterprise Unit Legal Persons)

The organizer of an existing non-governmental school registered as a non-governmental non-enterprise unit legal person that was established before November 7, 2016 may choose independently to run a non-profit or for-profit non-governmental school. The organizer shall submit written materials on his/her choice of the nature of school running to the licensing department before December 31, 2018. A school whose materials are not submitted on time shall not be changed to a for-profit non-governmental school. A school providing compulsory education shall not be registered as a for-profit non-governmental school.

A school choosing to be registered as a non-profit non-governmental school shall, before December 31, 2019, revise the school constitution according to law, improve the corporate governance structure and internal management rules, and continue to provide education service.

A school choosing to be registered as a for-profit non-governmental school shall, under the guidance of the licensing department and relevant functional departments, organize financial settlement, define ownership of the assets according to law, pay the taxes and fees according to relevant provisions of the State, undergo the legal person registration formalities again, and continue to provide education service. The capital confirmed by the settlement to have been contributed by the organizer shall be the legal person’s registered capital and his/her paid-in capital in the re-registration, and all the assets and the related rights and obligations confirmed by the settlement shall be inherited by the legal person in the re-registration, except the public financial investment and social donation, which shall be handled according to relevant provisions; if complying with the requirements, the school may enjoy relevant preferential policies regarding taxes and fees. Those schools that mainly provide higher-education-certificate education shall complete the above-mentioned work before December 31, 2021; other schools shall complete such work before December 31, 2020.

The relevant municipal and district government departments shall, according to the written materials submitted by the organizers of various non-governmental schools and the subsequent work after the choices, offer support and conduct management in a differentiated way.

Article 31(Transitional Arrangements for For-profit Non-governmental Training Institutions)

The for-profit non-governmental training institutions established before the effectiveness of these Procedures shall revise their constitution, improve their corporate governance structure and perfect the conditions for school running according to the provisions of relevant laws, rules and regulations, apply for the school-running license to the corresponding licensing department of the locality of their domicile, and go through other relevant formalities according to law in a timely manner after obtaining the school-running license. The above work shall be completed before December 31, 2019.

Article 32 (Compensation and Rewards for the Existing Schools Registered as Non-governmental Non-Enterprise Unit Legal Persons)

Where an existing non-governmental school registered as a non-governmental non-enterprise unit legal person and established before November 7, 2016 is terminated after choosing to be registered as a non-profit non-governmental school or is terminated before it makes such a choice, it shall make proper arrangements for its students and staff, and conduct relevant work in a standardized manner; the licensing department shall, according to the fund contributors’ application and jointly with relevant functional departments, consider in an overall manner such factors as their fund contributions, reasonable returns and the gains from school running, provide the fund contributors with corresponding compensation or rewards out of the remaining assets after the school legally pays off the debts, and the amount of the compensation and rewards shall be calculated according to the methods attached to these Procedures.

The compensation and rewards shall be drawn from the monetary fund of the remaining assets of the school, and, if the monetary fund is insufficient, from the monetary fund left after other assets are legally transferred. The assets remaining after the compensation and rewards are deducted shall continue to be used to run other non-profit schools.

Where a non-governmental school has failed to pass the annual inspection for two consecutive years before its school-running license or legal person registration is canceled, or where a non-governmental school’s school-running license or legal person registration has been revoked, no rewards shall be granted to its fund contributor.

Chapter VI  Supervision and Administration

Article 33(Information Disclosure)

Disclosure by the government: all functional departments shall establish a number of systems for non-governmental education information disclosure, credit archives, punishment for illegal discredit, and pre-warning; they shall perfect the system of non-governmental education management, and disclose to the public such contents as the laws, rules, regulations and documents on non-governmental education, information on non-governmental schools approved for establishment and terminated, annual inspections of non-governmental schools, and the rewards and punishments non-governmental schools have received.

Disclosure by the school: non-governmental schools shall establish a mechanism of information disclosure, disclose and update in a timely manner the basic school information, the organizer’s basic information, the constitution, rules, regulations, change of main staff members, methods of the enrollment examination, fee collection, school assets and financial status, and handling of emergencies.

Article 34(Supervision and Administration)

Relevant municipal departments shall guide and supervise relevant departments of all districts, and the municipal and all district functional departments shall do well in supervision and administration of non-governmental schools according to their statutory authority, organize, according to law, such work as special inspection, daily inspection, school-running assessment, annual inspection, and annual reports. They shall improve the mechanism of hiring and administering supervisors at non-governmental institutions of higher learning, and give full play to the supervisors’ guiding and supervising role in regulating school running.

The education supervision department shall establish and improve the non-governmental school supervision system according to law, and, by way of special supervision and comprehensive supervision, supervise and guide non-governmental schools’ acts in school running, and organize assessment and monitoring of the education development and quality.

The education department and other relevant departments shall establish the channels for complaining and reporting school-running acts in violation of laws, rules or regulations, publicize the department and phone number for complaints, and investigate and deal with such complaints and offense reporting. All relevant departments shall establish and improve a joint law enforcement mechanism for non-governmental education, and punish according to law non-governmental schools with acts in violation of laws, rules and regulations.

Article 35(Industry Self-discipline)

Non-governmental-related industry organizations shall be encouraged to build an industry self-discipline regulation system, an internal industry regulation system, an industry self-discipline restraint mechanism and an industry credit system. They shall be supported to play a connecting role in such aspects as serving the industry, communicating and cooperating, collaborating in innovation, and fulfilling social responsibilities, and to explore the building of an inter-school mutual-aid system.

Article 36(Professional Organizations)

Professional social organizations shall be encouraged and guided to participate in governance of non-governmental schools and provide them with evaluation and certification services, consultation service, legal service, and financial and insurance services. Education intermediary organizations and other industry organizations shall be supported to play a role in such aspects as guiding non-governmental schools to persist in school running for public welfare, innovating modes of talents cultivation, and improving the quality of talents cultivation.

Chapter VII  Legal Liability

Article 37(Schools’ Liability)

Where a non-governmental school is run without authorization or commits acts in violation of laws, rules or regulations, all relevant departments shall investigate and punish it according to law; if such acts violate the regulations on public security administration, the public security department shall punish it for such acts according to law; if a crime is constituted, it shall be prosecuted for criminal liability according to law.

Article 38(The Government’s Liability)

Where relevant functional departments at all levels commit acts in violation of laws, rules or regulations in administering non-governmental school licensing and registering, their superior departments shall order them to make corrections; if the case is serious, the person-in-charge and other persons directly liable shall be punished according to law; if economic loss is caused, they shall bear liability for compensation according to law; if a crime is constituted, they shall be prosecuted for criminal liability according to law.

Chapter VIII  Supplementary Provisions

Article 39 (Calculation of Time Limits)

The time limits for various matters provided in these Procedures shall be calculated by natural day or extended month and year, including statutory holidays, except those defined to be calculated by working day.

Article 40(Effective Date)

These Procedures shall be effective as of January 1, 2018 until December 31, 2027.

Annex: Methods for Calculation of Compensation and Rewards

The amount of compensation and rewards provided in Article 32 of the Procedures of Shanghai Municipality on Classified Licensing and Registration Administration of Non-governmental Schools shall be calculated according to the following methods:

1. Compensation

The amount of compensation shall be the sum of the contributing fund and the commutation interest on the contributing fund over the years, deducted by the sum of the reasonable return for the contributor and the commutation interest on the return over the years, though this amount shall not exceed the amount of the remaining asset deducted by the assets formed from the fiscal support and social donations.

The commutation interest shall be the average of the benchmark interest rate of financial institutions’ RMB loans for one to three years or one to five years and the benchmark interest rate of financial institutions’ RMB time deposit for one year, during the period from the time of contributing the fund or obtaining the reasonable return until when the school terminates running or when the school-running license expires, whichever is earlier.

2. Rewards

The calculation of the amount of the rewards shall take as its base the total income from the maximum annual tuitions within the five years before whichever time is earlier, either when the school terminates running or the school-running license expires, and take the results of the annual inspections each year after September 1, 2017 as the coefficient; and the maximum reward shall not exceed the amount of the remaining asset plus the compensation after paying off the school debt and being deducted by the assets formed from the fiscal support and social donations.

The initial value and the minimum value of the coefficient are 0, and the coefficient shall increase by 0.1 every time the school obtains the conclusion of “pass” in the annual inspection; the coefficient shall decrease by 0.5 every time it obtains the conclusion of “fail” in the said inspection.

Where a non-governmental school fails in two consecutive annual inspections two years before its school-running license or its legal person registration is canceled or revoked, its fund contributor shall not be rewarded.