Administration and Supervision
Article 39 Administrative Departments for education and the relevant departments shall provide guidance to privately-run schools in respect of education and teaching and training among teachers.
Article 40 Administrative departments for education and the relevant departments shall， in accordance with law， exercise supervision over and provide guidance to privately-run schools， in order to promote the enhancement of the quality of such schools； and they shall make arrangements or entrust public intermediary bodies with the arrangements for assessing the level and the quality of education of such schools， and make the results of the assessment known to the general public.
Article 41 The general regulations and advertisements for student enrollment of privately-run schools shall be submitted to the examination and approval authority for the record.
Article 42 Where a privately-run school infringes upon the lawful rights and interests of educates， the educates and their relatives shall have the right to make petition to the administrative department for education and any relevant department， and the said department shall handle it without delay。
Article 43 The State supports and encourages public intermediary bodies to provide services to privately-run schools.
Support and Reward
Article 44 People's governments at or above the county level may set up special funds for financing the development of privately-run schools and for rewarding and commending the collectives and individuals that have made outstanding contributions.
Article 45 People's governments at or above the county level may take such measures as financial aid and the lease or transfer of idle State-owned assets in support of privately-run schools.
Article 46 Privately-run schools shall enjoy preferential taxation policy formulated by the State.
Article 47 Civilian-run schools may， in accordance with the relevant laws and regulations of the State， accept donations afforded by citizens， legal persons or other organization.
The State， in accordance with relevant regulations， applies preferential taxation policy to citizens， legal persons or other organizations that donate property to privately-run schools by means of credit.
Article 48 The State encourages financial institutions to support the development of privately-run schools by means of credit.
Article 49 Where a people's government entrusts a privately-run school with the task of compulsory education， it shall， in accordance with the agreement of entrustment ，appropriate the necessary amount of funds for education.
Article 50 Where a privately-run school is constructed or expanded， the people's government concerned shall give it preferential treatment in accordance with the regulations on the use of land for， and the construction of ，public welfare undertakings. No land to be used for education may be used for other purposes.
Article 51 After the cost of a privately-run school is deducted， the funds for its development are withheld and the sum of money for other necessary expenses is drawn in accordance with the relevant regulations of the State， the fund providers may obtain a reasonable amount of requital from the cash surplus of the school. Specific measures for obtaining reasonable amounts of requital shall be formulated by the State Council.
Article 52 The State takes measures to support and encourage public organizations and individuals to establish and run privately-run schools for the development of education in minority nationality areas and in out-lying and poverty-stricken areas.
Alteration and Termination
Article 53 The executive council or the board of directors of a privately-run school to be divided or merged into other schools shall， after financial settlement， apply to the examination and approval authority for approval.
Where a Privately-run school applies for division or merging， the examination and approval authority shall， within three months form the date it receives the application， give a reply in writing； and where the application is made for the division or merging of a privately-run institution of higher education， the examination and approval authority may， within six months from the date it receives the application， likewise give a reply in writing.
Article 54 For alteration of the sponsor of a privately-run school， the matter shall be put forth by the sponsor and， after financial settlement and upon agreement by the executive council or the board of directors of the school， submitted to the examination and approval authority for verification and approval.
Article 55 For alteration of the name ，level， or category of a privately-run school ，the matter shall be submitted by the executive council or the board of directors of the school to the examination and approval authority for approval.
Where an application is made for the alteration of a privately-run school from one type to another， the examination and approval authority shall， within three months from the date it receives the application， give a reply in writing； and where the application is made for alteration to a privately-run institution of higher education， the examination and approval authority may， within six months from the date it receives the application， likewise give a reply in writing.
Article 56 Where a privately-run school is found in one of the following circumstances， it shall be terminated：
（1） it is required to be terminated according to the provision of the articles of association of the school， and the termination is approved by the examination and approval authority；
（2）the license for running the school is revoked；
（3）it cannot continue due to insolvency；
Article 57 When a privately-run school is to be terminated， it shall make proper arrangements for the students in school. When a privately-run school providing compulsory education is to be terminated， the examination and approval authority shall assist the school to make arrangements for the students to continue their studies.
Article 58 When a privately-run school is to be terminated， it shall make financial settlement according to law.
Where a privately-run school requests termination itself， it shall make arrangements for the settlement； where it is abolished by the examination and approval authority according to law， the settlement shall be arranged by the authority； and where it is terminated because it cannot continue due to insolvency， the settlement shall be arranged by the People's Court.
Article 59 Property of a privately-run school shall be liquidated in the following order：
（1）tuition fees and extras and other expenses paid by educates that should be returned；
（2）wages payable to the teachers and staff members and the social insurance premiums that
should be paid；
（3）other debts that should be cleared off.
The remaining property of a privately-run school after the debts mentioned above are cleared off shall be disposed of in accordance with the provisions of relevant laws and administrative regulations.
Article 60 When a privately-run school is terminated， the license for running the school shall be taken back， its seals destroyed and its registration cancelled by the examination and approval authority.
Article 61 Where， in conducting education activities， a privately-run school violates the provisions of the Education Law or the Teachers Law， it shall be punished in accordance with the relevant provisions of the Education Law or the Teachers Law.
Article 62 Where a privately-run school commits one of the following acts， the examination and approval authority or the relevant department shall order it to rectify within a time limit and give it a disciplinary warning； if there are unlawful gains derived therefrom， they shall be confiscated after returning the fees collected； if the circumstances are serious， it shall be ordered to stop enrolling students and its license for running the school shall be revoked； and if a crime is constituted， it shall be investigated for criminal responsibility according to law：
（1） dividing or merging the privately-run school without authorization；
（2） altering the name， level， category and sponsor of the privately-run school without
（3）publishing false general regulations of enrollment or advertisements for the purpose of defrauding money；
（4）unlawfully issuing or forging academic credential， certificates of courses completed， certificates of training or vocational qualification certificates；
（5）seriously affecting education and teaching due to haphazard administration， which exerts a bad influence on society；
（6）obtaining the license for running the school by submitting false supporting documents or concealing important facts by other deceptive means；
（7）forging， counterfeiting， dealing in ，renting or lending its license for running the school；
（8）terminating the school in bad faith， illegally withdrawing its funds or misappropriating
the funds for running the school.
Article 63 Where the examination and approval authority or the relevant department commits one of the following acts， it shall be ordered by the authority at the higher level to rectify； if the circumstances are serious ，the persons directly in charge and the other persons directly responsible shall be given administrative sanctions according to law； if economic losses are caused， it shall bear the responsibility to pay compensation according to law； and if a crime is constituted， it shall be investigated for criminal responsibility according to law：
（1） failing to give a reply within the prescribed time limit to an accepted application for the establishment of a privately-run school；
（2） giving approval to an application which does not conform to the conditions provided for in this Law；
（3） causing serious consequences due to careless administration；
（4） colleting fees in violation of the relevant regulations of the State；
（5） infringing upon the lawful rights and interests of a privately-run school；
（6） abusing its powers or engaging in malpractices in other ways.
Article 64 Where a public organization or individual establishes or runs a private school without authorization， it /he shall be ordered by the relevant administrative department of the people's government at or above the county level to rectify within a time limit； if the school conforms to the conditions provided for in this Law or relevant laws regarding privately-run schools， it may go through the formalities of examination and approval； if fails to meet the conditions at the expiration of a prescribed time limit， it shall be ordered to stop running the school， and if economic losses are caused， it shall bear the responsibility to pay compensation.
Article 65 The privately-run schools mentioned in this Law include other privately-run institutions of education established according to law.
The principals mentioned in this Law include the principal administrative persons in charge of other privately-run institutions of education.
Article 66 Measures for administration of profit-making privately-run training institutions registered with the administrative department for industry and commerce shall be separately formulated by the State Council.
Article 67 Measures for schools established and run cooperatively by overseas organizations or individuals within the territory of the People's Republic of China shall be formulated by the State Council.
Article 68 This Law shall go into effect as of September 1，2003.The Regulations on Schools Run by Different Sectors of Society issued by the State Council on July 31，1997 shall be abolished at the same time.