THE PRC LAW ARTICLE SERIES Setting up Business in China and the Chinese Corporation Amendment, Part 1 中國大陸法制系列 – 論公司設立與中國公司法之新修正(一) 法律部 王良輔紐約律師 撰 A lot of foreign investors were attracted into doing business in China after learning that China had amended its corporate law in 2013, and reduced the capital requirements for setting up corporations. In this article, we will discuss this issue as well as other major amendments in Chinese Corporation Law of 2013. The amendments to the Chinese Corporation Law focus mainly on the capital part of limited liability companies, one person limited liability com-panies, and companies limited by shares.The Amendments mainly cover the following items: i) Minimum amount The amended Chinese Corporation Law no longer requires minimum amount in terms of the registered capital and the initiate capital contribution, unlike the originally rules which the registered capital of a company shall not be less than RMB 30,000, and the initial capital contribution by all shareholders shall be neither less than 20% of the registered capital. ii) Contribution period Originally, the initial capital contribution shall be paid in by all shareholders upon establishment of the company, and the remainder shall be paid in within two years and five years after establishment for investment company. While the amended Chinese Corporation Law does not require this anymore. iii) Cash contribution Originally, the Chinese Corporation Law requires that the contribution in cash by all shareholders shall not be less than 30% of the registered capital of the company. Now, the amended Chinese Corporation Law removed the requirement for minimum ratio of cash contribution that was 30% of the registered capital of the company by each and every shareholder. To be continued…
Posted on: Fri, 22 Aug 2014 13:00:01 +0000
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