The new Company Law in 2023 is here, which will come into force in July 2024.
What amendment clauses should be focused on in the establishment and operation of limited liability enterprises?Mr. Chen sorted out 16 key issues.
1. Confirm that the company's "name right" is protected by law. The establishment and operation of enterprises "rubbing the name" is suspected of infringement.
2. Clarify the consequences of the legal representative's actions. The legal representative represents the company, and the company shall be responsible for any damage caused to others.
3. Improve the company's "personality negation" system. Shareholders abuse their status as legal persons to evade debts, damage the interests of the company's creditors, and bear joint and several liability for the company's debts.
4. Resolutions of the shareholders' meeting, the board of directors and the board of supervisors are allowed to be convened in the form of electronic communication. The use of electronic communication to convene and vote on company meetings is valid.
5. Improve the corporate governance mechanism. Clarify the invalidity, revocation, invalidity and legal consequences of the resolution of the shareholders' meeting and the resolution of the board of directors.
6. New types of electronic business licenses. An electronic business license has the same legal effect as a paper business license.
7. It is clarified that the company shall publicize specific matters through the enterprise information publicity system. The establishment, alteration and cancellation of a company shall perform the obligation of publicity.
8. The subscribed capital contribution of the shareholders of a limited liability company shall be paid in full within five years from the date of establishment. The amended Company Law emphasizes the statutory obligation of shareholders to pay up the full amount of capital contributions within five years.
9. In addition to monetary contributions, equity and debt rights can also be used for capital contributions. The types of non-monetary assets such as equity and debt rights owned by the new shareholders can be transferred for capital contribution.
10. Strengthen the obligation of shareholders to make capital contributions, and shareholders who fail to pay their capital contributions in full shall compensate the company. Other shareholders at the time of establishment are also jointly and severally liable for insufficient capital contribution by the shareholder.
Ten.
1. Clarify the obligations of directors to enrich their capital. If the directors fail to fulfill their obligation to urge shareholders to make capital adequacy, they shall be liable to the company for the failure of shareholders to make full capital contributions.
Ten.
2. It is clarified that in the case of a shareholder's withdrawal of capital contribution, the subject of responsibility is expanded from a single shareholder to include directors, supervisors, and senior managers. If shareholders withdraw their capital contributions, the directors, supervisors and senior managers who are responsible shall be jointly and severally liable for compensation.
Ten.
3. Clarify the responsibility of shareholders to accelerate the maturity of their capital contributions. In the event that the company is unable to pay off its debts as they fall due, shareholders are required to pay their capital contributions in advance.
Ten.
4. It is clarified that directors can resign. The shareholders' meeting may also pass a resolution to dismiss the directors.
Ten.
5. A limited liability company may not have a supervisor. With the unanimous consent of all shareholders, a limited liability company may not have a supervisor.
Ten.
6. Shareholders can establish more than one person company as a sole proprietorship, and one person company can also continue to reinvest. The 2023 Company Law removes the restrictions on the establishment and reinvestment of one-person companies in Article 58 of the original Company Law.
What are your thoughts on the 2023 amendments to the Companies Law?Please leave a message in the comment area.
If you need legal advice, please contact Mr. Chen.