Legal Analysis for Organizing a Online Game Company
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Legal Analysis for Organizing a Online Game Company(BY Smiling Tom)Part 1 Procedure and ProblemsI Set up a Online Game CompanyBasic Qualifications:1.Have defined name, residence, organization and articles of association;2.Have a defined business scope of online games;3.Have the employees, at least eight, which are qualified for the need of cultural activitiesfor Internet and have obtained the appropriate qualifications , as well as in compliance with other state regulations;4.With a registered capital of more than 10 million;5.In compliance with other provisions of laws and administrative regulations.II Software Copyright RegistrationInstruction: Companies are encouraged to develop intellectual property rights in China. Software copyright is necessary for gaming companies to apply for preferential policiesSuggestion: If our company successfully develops a online game, we'd better register the related software copyright, of which the procedure is easy and lasts for only few weeks.III Application for Online Culture Business Permit ("Permit")Instruction: The Permit is necessary for Internet cultural operating units. For the Permit, game companies should apply to the Cultural Administrative Departments of local provinces, autonomous regions or municipalities. The examination and approval authority for the Permit is Ministry of Culture of China.Suggestion: Due to the difficulty of application, our company had better apply for the Permit at first priority. The procedure may last for several monthsIV Application for Inter-provincial Value-added Telecommunications Business License ("ICP")Instruction: Ministry of Industry and Information Technology of PRC is the examination and approval authority for the ICP.A qualified company shall:1.Be legally established;2.Possess proper capital and employees for the operations of business;3.Have the credibility or ability to provide long-term services for customers;4.Be with a minimum registered capital of 10 million yuan, in the case of operating across inthe country or across provinces, autonomous regions or municipalities;plete the feasibility study report and related technology solutions6.Possess necessary site, facilities and technology programs;7.The main investors and managerial forces of the game company should have no records ofviolation of Telecom Regulatory System in last three years before application.Suggestion: Due to the difficulty of application, our company may apply for the Permit at first priority as well. The procedure may last for several monthsV Filing for Operation of Online GamesInstruction: Filing for games is necessary for companies to obtain the rights for registration, charge for users, and any other operating activities. Ministry of Culture is the application as well as examination and approval authority.Suggestion: Due to the complexity of application, our company may commission a consulting company for operation.VI Application for Internet Publishing License ("License")Instruction: The License is necessary for companies to obtain the rights for publishment of online games. For the License, game companies should apply to the Publication Administration Departments of local provinces, autonomous regions or municipalities. The examination and approval authority for the Permit is General Administration of Press and Publication of China ("GAPP"). Once the company gets the License, the Copyright Number for online games will be given.Suggestion: Due to the striction of application, our company may apply for the License by cooperating with a press.( The attach diagram may help you further understand.)Application :Publication Administration Departments of localprovinces, autonomous regions or municipalitiesExamination and Approval authority: GAPPCooperating with a press for application is recommanded Application & Examination and Approval authority: Ministryof CultureII. Software CopyrightRegistration I. Set up a online gamecompany III. Application for the PermitTo apply for preferential policies, the registration is recommended ;Where :Designated copyright agency of each province.Application :Cultural Administrative Departments of localprovinces, autonomous regions or municipalitiesExamination and Approval authority: the Permit is Ministry ofCulture of ChinaTo apply for the Permit at first priority is recommendedV . Filing for Operation of Online games VI. Application for the LicenseBasic Qualifications: 1. Have a defined name, residences, organization and articles of association; 2.Have a defined business scope of online games;3.Have the employees, at least eight, which are qualified for the need of cultural activities for Internet and have obtained the appropriate qualifications , as well as in compliance withother state regulations; 4.With a registered capital of more than10 million; 5.In compliance with other provisions of laws andadministrative regulations.IV . Application for the ICP Qualifications: 1.Be legally established; 2.Possess propercapital and employees for the operations of business; 3.Havethe credibility or ability to provide long-term services forcustomers; 4.Be with a minimum registered capital of 10million yuan, in the case of operating across in the country oracross provinces, autonomous regions or municipalities;plete the feasibility study report and related technologysolutions; 6.Possess necessary site, facilities and technologyprograms; 7.The main investors and managerial forces of thegame company should have no records of violation of TelecomRegulatory System in last three years before application.Examination and Approval authority: Ministry of Industry andInformation TechnologyTo apply for ICP at first priority is recommendedPart Two Prohibition on Foreign Investment in Domestic OnlineGame operationI. According to the Catalogue for the Guidance of Foreign Investment Industries, as listed in Chapter X of the third section, Prohibited Foreign Investment Industries, Foreign investment industries are prohibited from news websites, network audio-visual program services, online-service site operation and Internet culture operation.II. According to relevant regulations , foreign enterprises are prohibited from:a)Establishing any other joint venture, signing relevant agreements or providingtechnical support, thus to indirectly or directly involved in the actual control ofdomestic enterprises and online game operationsb)Controling and participating in online game operations in any disguised forms ofnetplay or battle platforms that actually controlled or owned by foreign enterprises,embodies of which are often user registrations, account management or point cardsconsumptions and etc.On violation of the regulations above, the NAPP, together with relevant departments, shall investigate and punish the violators. Revocation of relevant licenses and cancellation of the registration of serious cases will be made.Part Three Conclusion and RecommandationTherefore, to organize a Online game company is solely permitted in domestic form. Foreign investment can not set up or control a game company onshore in any form.However, in practice, foreign investors usually choose the Sina Model (VIE Model) to invest and control domestic game companies, which is ILLEGAL as fully prohibited by regulations hereabove.。