CHINA Law and Practice Contributed by: Nancy Zhang, Xiaoying Tian, Qian Gu and Liangqian Ying, JunHe LLP
As in the limited liability company, board direc - tors are appointed by the shareholders’ assem - bly (or shareholder), and the general manager is appointed or dismissed by decision of the board of directors. 5.6 Annual Entity Maintenance and Accounting Compliance A company must submit the annual report for the preceding year to the administration for market regulation through the corporate credit informa - tion disclosure system between 1 January and 30 June each year. No fees are required for the submission of such report. Companies are also required to prepare financial accounting reports at the end of each fiscal year, which are audited by an accounting firm. In addi - tion to such accounting expenses, additional fees may be incurred for other financial matters as agreed in a company’s articles of association. Such fees vary depending on the location of the accounting firm and the company’s assets and financial condition. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Leasing is the most common method to obtain the right to occupy and use any or all of a build - ing for a limited period of time. In addition, the habitation right, if duly registered, is another method to occupy and use another person’s dwellings, generally free of charge unless oth - erwise agreed. The habitation right is a newly created right under the Civil Code. Methods to obtain the use right to a piece of land vary depending on the type of land. Land
is classified into farmland, construction land and unused land: • farmland means land that is directly used for agricultural production, including cultivated land, forest land, grassland, etc; • construction land mainly includes land zoned for the construction of buildings and other structures; and • unused land refers to land other than farm- land and construction land. The use right to farmland may be obtained through a contracting arrangement, whereby contractors may enter into an agreement with a landowner or other entities with delegated authority to engage in agricultural production such as planting, forestry, animal husbandry, and fishery on the land, and benefit from such production. The use right to construction land may be obtained by entering into a land grant contract (with land premiums to be paid) or a land allo - cation contract (no land premiums to be paid) with the competent local land authorities if it is stated-owned or the relevant collective if it is collectively owned. In addition, real estate owners are entitled to use the land or buildings adjacent to their own real estate for the purpose of obtaining and draining water, passage, ventilation and lighting, etc that are necessary for their life or production. Such neighbouring right is mandatory and no agree - ment between the parties is required. Parties may also create easement through execution of agreements to obtain the right to use another party’s real estate.
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