On June 7, 2024, the 34th Executive meeting of The State Council amended the provisions of the registration of registered capital in the Company Law of the People’s Republic of China (hereinafter referred to as the “new Company Law”), and it has been implemented on July 1, 2024. Violations of the registration system will be heavily fined!
Compared with the regulations in 2018, the new Company Law mainly provides more details on the timelines of subscription and paid-in, capital increase, capital reduction etc. of the registered capital of enterprises:
Among the new regulations revised, “full capital contribution within five years” attracts most of the concerns. The Guangzhou Municipal Administration for Market Regulation has made explanations on this point:
In addition to the new regulations on registered capital, the new Company Law has also abolishes the position of supervisor in small-scale limited liability companies:
Article 83: A limited liability company with a smaller scale or fewer shareholders may not have a supervisory board, but may have one supervisor to exercise the powers of the supervisory board as stipulated in this Law. With the unanimous consent of all shareholders, there may be no supervisors.
In the past, establishing a limited liability company required at least two pieces of identity information, one serving as the legal representative and the other as the supervisor, and the supervisor did not have a practical role in many small-scale companies. After the implementation of this new regulation, supervisors who have no practical roles can apply for changes to other positions, or even cancel the positions, thereby terminating their relationship with the company, making it more convenient to register a company, especially a limited liability company one person.
The revised content of the new Company Law has not been fully recorded in this article. IFor more details, please feel free to contact us!