Judicial auction means that in the enforcement procedure of civil cases, the people's court conducts it on its own according to the procedures or entrusts an auction company to publicly dispose of the debtor's property to pay off the creditors' claims.

How to operate

Part of the information on the judicial auction has been made public on the Internet, such as the Beijing Court website, the judicial auction section of the Chongqing Property Rights Exchange website, Taozizi.com, etc. Judicial auctions are also an emerging investment channel, especially in the field of disposal of non-performing assets, which have good profit potential.

Types

Specifically, judicial auctions include court-mandated auctions and court-entrusted liquidation administrators to conduct procedural auctions of bankrupt enterprises. Court-mandated auction means that the court enforces the execution of the debtor's property based on a legal document that has taken effect, and then delivers the price to the creditor after the debtor's property is realized through auction. The auction of a bankrupt enterprise is the cancellation or bankruptcy of the enterprise due to insolvency or other improper business methods. The court shall appoint a liquidation administrator to establish a special bankrupt enterprise liquidation organization to entrust a qualified auction enterprise or other institution to auction the subject matter. of.

Auction Law of the People's Republic of China

(Adopted at the 20th meeting of the Standing Committee of the Eighth National People's Congress on July 5, 1996, in accordance with the August 2004 "Decision on Amending the Auction Law of the People's Republic of China" at the 11th meeting of the Standing Committee of the 10th National People's Congress on the 28th (amended)

Contents

Chapter 1 General Provisions

Chapter 2 Auction Objects

Chapter 3 Parties to the Auction

Section 1 Auctioneers

Section 2 Client

Section 3 Bidder

Section 4 Buyer

Chapter 4 Auction Procedure

Section 1 Auction Entrustment

Section 2 Auction Announcement and Display

Section 3 Implementation of Auction

Section 4 Commission

Chapter 5 Law Responsibilities

Chapter 6 Supplementary Provisions

Chapter 1 General Provisions

Article 1 is to regulate auction behavior, maintain auction order, and protect the legality of all parties involved in auction activities rights and enact this law.

Article 2 This Law applies to auction activities conducted by auction enterprises within the territory of the People’s Republic of China and the People’s Republic of China.

Article 3 Auction refers to a buying and selling method in which specific items or property rights are transferred to the highest bidder in the form of public bidding.

Article 4 Auction activities shall comply with relevant laws and administrative regulations, and follow the principles of openness, fairness, impartiality, and good faith.

Article 5 The department responsible for the management of the auction industry under the State Council shall supervise and manage the auction industry nationwide.

The departments responsible for the management of the auction industry of the people's governments of provinces, autonomous regions, municipalities directly under the Central Government and the people's governments of districted cities shall supervise and manage the auction industry within their respective administrative regions.

Chapter 2 Auction Objects

Article 6 The auction objects shall be items or property rights owned by the client or disposable in accordance with the law.

Article 7 Articles or property rights prohibited from sale and purchase by laws and administrative regulations shall not be used as auction subjects.

Article 8 Articles or property rights that require examination and approval before being transferred in accordance with the law or in accordance with the provisions of the State Council must go through the examination and approval procedures in accordance with the law before being auctioned.

Cultural relics commissioned for auction must be authenticated and approved by the cultural relics administrative department at the auctioneer’s residence before the auction.

Article 9 If items confiscated by state administrative agencies in accordance with the law, items used to offset taxes, fines, and other items that should be entrusted for auction in accordance with the provisions of the State Council, the people's government of the province, autonomous region, or municipality directly under the Central Government where the property is located shall Conduct the auction with the auctioneer designated by the people's government of the districted city.

The provisions of the preceding paragraph shall apply to the auction of items confiscated by the people's court in accordance with the law, items used to offset fines and fines, and recovered items that cannot be returned.

Chapter 3 Parties to the Auction

Section 1 Auctioneer

Article 10 The auctioneer refers to the person who shall be the auctioneer in accordance with this Law and the "People's Republic of China and the People's Republic of China". An enterprise legal person established under the Company Law to engage in auction activities.

Article 11 Auction enterprises may be established in cities divided into districts. The establishment of an auction enterprise must be reviewed and approved by the department responsible for managing the auction industry of the people's government of the province, autonomous region, or municipality directly under the Central Government where it is located, and it must apply for registration to the industrial and commercial administrative department and obtain a business license.

Article 12 To establish an auction enterprise, the following conditions must be met:

(1) A registered capital of more than one million yuan;

(2) ) have its own name, organizational structure, address and articles of association;

(3) have auctioneers and other staff suitable for engaging in the auction business;

(4) have qualified Auction business rules stipulated in this Law and other relevant laws;

(5) Comply with the provisions of the State Council on the development of the auction industry;

(6) Other conditions stipulated by laws and administrative regulations.

Article 13 If an auction enterprise engages in the auction of cultural relics, it shall have a registered capital of more than RMB 10 million and have personnel with professional knowledge in the auction of cultural relics.

Article 14 Auction activities shall be hosted by the auctioneer.

Article 15 An auctioneer shall meet the following conditions:

(1) Have a college degree or above and professional auction knowledge;

(2) Work in an auction company for more than two years;

(3) Good conduct.

Those who have been dismissed from public office or whose auctioneer qualification certificate has been revoked for less than five years, or who have been criminally punished for intentional crimes, shall not serve as auctioneers.

Article 16 The qualification assessment of auctioneers shall be uniformly organized by the Auction Industry Association. Those who pass the assessment will be issued an auctioneer qualification certificate by the Auction Industry Association.

Article 17 The Auction Industry Association is a social group legal person established in accordance with the law and a self-regulatory organization for the auction industry. The Auction Industry Association shall supervise auction enterprises and auctioneers in accordance with this Law and its charter.

Article 18 The auctioneer has the right to require the consignor to explain the origin and defects of the auction object.

The auctioneer shall explain the defects of the auction object to the bidders.

Article 19 The auctioneer has the obligation to keep the items delivered for auction by the client.

Article 20 After accepting the entrustment, the auctioneer shall not entrust other auctioneers to auction without the consent of the consignor.

Article 21 If the client or buyer requires that their identity be kept confidential, the auctioneer shall keep it confidential.

Article 22 Auctioneers and their staff may not participate in the auction activities organized by themselves as bidders, and may not entrust others to bid on their behalf.

Article 23 The auctioneer shall not auction his own items or property rights in the auction activities organized by himself.

Article 24 After the auction is completed, the auctioneer shall deliver the price of the auction object to the consignor in accordance with the agreement, and hand over the auction object to the buyer in accordance with the agreement.

Section 2 The Client

Article 25 The client refers to the citizen, legal person or other organization that entrusts the auctioneer to auction items or property rights.

Article 26 The client may handle the entrusted auction procedures by himself, or his agent may handle the entrusted auction procedures on his behalf.

Article 27 The consignor shall explain the origin and defects of the auction object to the auctioneer.

Article 28 The client has the right to determine the reserve price of the auction object and require the auctioneer to keep it confidential.

If the auction of state-owned assets requires evaluation in accordance with the law or in accordance with the provisions of the State Council, it shall be evaluated by an evaluation agency established in accordance with the law, and the reserve price of the auction object shall be determined based on the evaluation results.

Article 29 The client may withdraw the auction object before the auction begins. If the consignor withdraws the auction object, he shall pay the agreed fees to the auctioneer; if no agreement is made, he shall pay the auctioneer the reasonable fees incurred for the auction.

Article 30 The client shall not participate in the bidding, nor may he entrust others to bid on his behalf.

Article 31 If the auction object is handed over by the consignor as agreed, after the auction is completed, the consignor shall hand over the auction object to the buyer.

Section 3 Bidders

Article 32 Bidders refer to citizens, legal persons or other organizations that participate in bidding for auction objects.

Article 33 If laws and administrative regulations stipulate the conditions for the sale and purchase of auction objects, bidders shall meet the prescribed conditions.

Article 34 Bidders may participate in the bidding on their own or entrust their agents to participate in the bidding.

Article 35 Bidders have the right to know the defects of the auction objects, inspect the auction objects and consult relevant auction materials.

Article 36 Once a bidder submits a bid, it may not withdraw it. When other bidders submit higher bids, their bids will lose their binding force.

Article 37 Bidders, or bidders and auctioneers, shall not collude maliciously to harm the interests of others.

Section 4 Buyer

Article 38 The buyer refers to the bidder who purchased the auction object at the highest price.

Article 39 The buyer shall pay the price of the auction subject as agreed. If he fails to pay the price as agreed, he shall bear liability for breach of contract, or the auctioneer shall obtain the consent of the client to transfer the auction subject to the auction subject. Another auction.

If the auction object is auctioned again, the original buyer shall pay the commission paid by himself and the consignor in the first auction. If the price at the re-auction is lower than the original auction price, the original buyer shall make up the difference.

Article 40 If the buyer fails to obtain the auction object as agreed, he has the right to require the auctioneer or the client to bear liability for breach of contract.

If the buyer fails to accept the auction object as agreed, he shall pay the resulting storage fees.

Chapter 4 Auction Procedures

Section 1 Auction Entrustment

Article 41 When entrusting auction items or property rights, the consignor shall provide identification and The auctioneer requires proof of ownership of the auction object or proof that the auction object can be disposed of in accordance with the law and other materials.

Article 42 The auctioneer shall verify the relevant documents and information provided by the client. If the auctioneer accepts the entrustment, he shall sign a written entrustment auction contract with the consignor.

Article 43 If the auctioneer deems it necessary to conduct appraisal of the auction object, he may conduct appraisal.

If the appraisal conclusion is inconsistent with the condition of the auction object specified in the auction contract, the auctioneer has the right to request a change or terminate the contract.

Article 44 The entrusted auction contract shall specify the following matters:

(1) The name and address of the consignor and auctioneer;

(2) The name, specifications, quantity, and quality of the auction object;

(3) The reservation price proposed by the consignor;

(4) The time and place of the auction;

(5) Time and method of delivery or transfer of auction objects;

(6) Commission and method and period of payment;

(7) Method of payment of price , time limit;

(8) Liability for breach of contract;

(9) Other matters agreed upon by both parties.

Section 2 Auction Announcement and Display

Article 45 The auctioneer shall issue an auction announcement seven days before the auction date.

Article 46 The auction announcement shall specify the following matters:

(1) The time and place of the auction;

(2) The auction subject;

(3) Time and place for display of auction objects;

(4) Procedures to be completed to participate in bidding;

(5) Other matters that need to be announced.

Article 47 The auction announcement shall be published through newspapers or other news media.

Article 48 The auctioneer shall display the auction objects before the auction and provide conditions and relevant information for viewing the auction objects.

The auction object shall be displayed for no less than two days.

Section 3 Implementation of Auction

Article 49 The auctioneer shall announce the auction rules and precautions before the auction.

Article 50 If there is no reserve price for the auction object, the auctioneer shall explain it before the auction.

If the auction object has a reserve price, and the bidder's highest bid does not reach the reserve price, the bid will not take effect, and the auctioneer shall stop the auction of the auction object.

Article 51: The auction will be concluded after the bidder’s highest bid is confirmed by the auctioneer’s hammer or other public expression of purchase.

Article 52 After the auction is completed, the buyer and the auctioneer shall sign a transaction confirmation letter.

Article 53 When conducting an auction, the auctioneer shall prepare auction records. The auction transcript shall be signed by the auctioneer and recorder; if the auction is successful, it shall also be signed by the buyer.

Article 54 The auctioneer shall properly keep complete account books, auction records and other relevant materials related to business operations.

The retention period of the account books, auction transcripts and other relevant materials specified in the preceding paragraph shall not be less than five years from the date of termination of the entrusted auction contract.

Article 55 If the auction subject needs to go through the formalities for license change and property rights transfer in accordance with the law, the consignor and buyer shall go through the formalities with the relevant administrative authorities with the transaction certificate and relevant materials issued by the auctioneer. .

Section 4 Commission

Article 56 The client and buyer may agree with the auctioneer on the commission ratio.

If the consignor, buyer and auctioneer have not agreed on the commission ratio, if the auction is successful, the auctioneer may charge a commission of no more than 5% of the auction transaction price from each of the consignor and buyer. . The commission rate is determined based on the principle of being inversely proportional to the auction price.

If the auction is unsuccessful, the auctioneer may charge the agreed fees from the consignor; if no agreement is made, the auctioneer may charge the consignor reasonable fees for the auction.

Article 57: When the items specified in Article 9 of this Law are sold at auction, the auctioneer may charge a commission from the buyer not exceeding 5% of the auction transaction price. The commission rate is determined based on the principle of being inversely proportional to the auction price.

If no transaction is concluded at the auction, the provisions of paragraph 3 of Article 56 of this Law shall apply.

Chapter 5 Legal Responsibilities

Article 58: The client violates the provisions of Article 6 of this Law and entrusts the auction of items or property rights that he or she does not own or that cannot be disposed of according to law. , should bear responsibility according to law. If the auctioneer clearly knows that the client does not own the items or property rights to be auctioned or cannot dispose of them in accordance with the law, he shall bear joint and several liability.

Article 59: State organs violate the provisions of Article 9 of this Law and entrust an auctioneer designated by the people's government of the province, autonomous region, or municipality directly under the Central Government where the property is located or the people's government of a city divided into districts to auction it. If items are disposed of without authorization, the person in charge and other directly responsible persons who are directly responsible shall be given administrative sanctions in accordance with the law. If losses are caused to the state, they shall also be liable for compensation.

Article 60: Anyone who violates the provisions of Article 11 of this Law and establishes an auction enterprise without permission shall be banned by the industrial and commercial administrative department, the illegal income shall be confiscated, and a fine of more than twice the illegal income may be imposed A fine of up to five times.

Article 61 The auctioneer or consignor violates the provisions of Article 18, Paragraph 2 and Article 27 of this Law by failing to explain the defects of the auction object, thereby causing damage to the buyer. , the buyer has the right to demand compensation from the auctioneer; if it is the responsibility of the consignor, the auctioneer has the right to recover compensation from the consignor.

If the auctioneer or consignor declares before the auction that they cannot guarantee the authenticity or quality of the auction objects, they will not be liable for defect guarantees.

If the auction object is defective and has not been declared, the statute of limitations for claiming compensation is one year, calculated from the date the party knew or should have known that the rights were damaged.

The relevant provisions of the "People's Republic of China and Domestic Product Quality Law" and other laws shall apply during the statute of limitations for claims for compensation for personal or property damage caused by defects in the auction objects.

Article 62 If the auctioneer or his staff violates the provisions of Article 22 of this Law by participating in bidding or entrusting others to bid on his behalf, the industrial and commercial administration department shall give the auctioneer a warning and may A fine of not less than one time but not more than five times the auction commission shall be imposed; if the circumstances are serious, the business license shall be revoked.

Article 63 If ??an auctioneer violates the provisions of Article 23 of this Law by auctioning his own items or property rights in an auction organized by himself, the proceeds from the auction shall be confiscated by the administrative department for industry and commerce.

Article 64 If, in violation of the provisions of Article 30 of this Law, the client participates in bidding or entrusts another person to bid on his behalf, the industrial and commercial administration department may impose a 30% penalty on the auction transaction price of the client. the following fines.

Article 65 If, in violation of the provisions of Article 37 of this Law, malicious collusion between bidders or between bidders and the auctioneer causes damage to others, the auction shall be invalid and shall be borne in accordance with the law. Liability. The industrial and commercial administrative department shall impose a fine of not less than 10% and not more than 30% of the maximum bid price on bidders who participate in malicious collusion; and fines of not less than 10% and not more than 5% of the maximum bid price on auctioneers who participate in malicious collusion. A fine of up to ten.

Article 66 If a commission is collected in violation of the provisions of Section 4 of Chapter 4 of this Law on commission ratio, the auctioneer shall return the excess amount to the client or buyer. The price management department may impose a fine of not less than one time but not more than five times the auction commission on the auctioneer.

Chapter 6 Supplementary Provisions

Article 67 This Law shall apply to foreigners, foreign enterprises and organizations that entrust auctions or participate in bidding within the territory of the People's Republic of China.

Article 68 If an auction enterprise established before the implementation of this law does not meet the conditions stipulated in this law, it shall meet the conditions stipulated in this law within the prescribed period; if it fails to meet the conditions stipulated in this law within the prescribed time limit, it shall If the conditions are met, the industrial and commercial administration department shall cancel the registration and confiscate the business license. Specific implementation measures shall be stipulated separately by the State Council.

Article 69 This Law shall come into effect on January 1, 1997.