China's new Civil Code – Part 1: General Provisions

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published on 30 June 2020 | reading time approx. 3 minutes

 

The new Civil Code (CC) of China, which will enter into force on January 1, 2021, consists of 7 books or parts. With this series of articles we inform about the essential legal provisions and new regulations in the new Civil Code. This article is focused on some aspects of the General Provisions of the Civil Code – Part 1.

  

  


Background

The General Provisions of the Civil Code are divided into ten chapters: basic provisions, natural persons, legal persons, unincorporated entities, civil rights, civil acts, representation, civil liability, limitation and calculation of limitation periods.

Capacity for civil rights and exercise of rights

In principle, every natural person has the capacity for civil rights from birth to death. In certain legal transactions, even the foetus may already be the holder of rights (e.g. inheritance, gifts). A natural person becomes an adult at the age of 18 and thus becomes the full bearer of all civil rights. Natural persons between the ages of 8 and 18 have limited legal capacity and generally require the consent of a representative (e.g. parent) for legal transactions.

Legal subjects

Legal subjects according to the Civil Code are natural persons, legal persons and unincorporated entities. Legal persons are further subdivided into profit-oriented legal persons (limited liability companies, joint stock companies, etc.), non-profit legal persons (e.g. social service organizations, foundations, public institutions, etc.) and special legal persons (e.g. government agencies, village/rural collectives).

Unincorporated entities include in particular sole proprietorships and partnerships.

Civil rights

Civil rights are divided into two main groups of rights: on the one hand personality rights and on the other hand property and possession rights.

Personality rights include among others:
  • the right to life,
  • the right to physical integrity and health,
  • the right to a name,
  • the right to one's own image,
  • the right to dignity and honor,
  • the right to marriage and family,
  • the right to the protection of personal information.

The property rights include, among others:
  • rights in rem,
  • Creditors' rights,
  • Intellectual property rights,
  • Right of succession,
  • Right to investments (stocks, company shares),
  • Ownership rights to data and IT-related „virtual property“.

Civil acts

Civil acts are defined as a statement of intent of a legal subject which serves to establish, change or terminate a civil law relationship. In order for a statement of intent to be effective, the legal subject must have the appropriate civil capacity to do so, the expressed intention must be authentic and the statement must not be contrary to the law, to morality or to the public order.

Limitation

The period of limitation is generally three years. The limitation period begins at the time when the eligible party knows or should have known that his rights have been violated and who the obligor is. If other laws stipulate other limitation periods, such special limitation periods take precedence over the general limitation period.

Legal implications

With regard to the business activities of companies, the General Provisions of the Civil Code do not contain any significant changes compared to the legal situation still in force. However, the extension of the catalogue of civil rights and the resulting greater legal certainty should be emphasized.

The next article in this series will deal with some aspects of the 2nd book of the Civil Code – property rights.
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