On December 29, 2023, the Standing Committee of the National People's Congress passed the amendment to the Company Law, which will come into force on July 1, 2024, Article 47 of which stipulates that "the registered capital of a limited liability company shall be the amount of capital contribution subscribed by all shareholders registered with the company registration authority. The amount of capital contribution subscribed by all shareholders shall be paid in full by the shareholders within five years from the date of establishment of the company in accordance with the provisions of the articles of association. Where laws, administrative regulations and decisions have other provisions on the paid-in registered capital of a limited liability company, the minimum amount of registered capital, and the period of capital contribution by shareholders, such provisions shall prevail. ”
This is one of the highlights of the revision of the Company Law, which was originally passed on December 28, 2013, and has no restrictions on the amount and duration of capital contribution by shareholders. It has played an important guiding role, through the implementation of ten years, there have been many drawbacks, many companies have a large registered capital, the amount of capital subscribed by shareholders does not consider the actual performance of capital contributions, the capital contribution period is decades, the company can not fulfill the due debts and become a zombie enterprise, and even lead to bankruptcy There are many cases, which also damage creditors.
Benefit. The new "Company Law" clarifies that except as otherwise provided by laws, administrative regulations and relevant decisions, the amount of capital subscribed by shareholders of a limited liability company shall be paid in full within 5 years from the date of establishment of the company, and shareholders who are encouraged to establish a company should have an objective assessment of the company's registered capital and capital contribution capacity, and after paying in full the subscribed capital contribution, shareholders can gradually increase the registered capital according to the company's business needs. For companies that have been registered and established before, if the capital contribution period stipulated in this Law is exceeded, unless otherwise provided by laws, administrative regulations and other regulations, it shall be gradually adjusted to the time limit stipulated in the new Company Law;If the amount of capital contribution and the term of capital contribution are abnormal, such as the amount of capital contribution subscribed is large and the capital contribution period is particularly long, which is obviously abnormal, the company registration authority authorized by law may require it to adjust it in a timely manner.