On December 29, 2023, the Seventh Session of the Standing Committee of the 14th National People's Congress passed the newly revised Bankruptcy Law, which will come into effect on July 1, 2024.
The enterprise referred to in the law refers to the *** and shares established in the territory of the People's Republic of China in accordance with the law
The revised Bankruptcy Law clearly stipulates that this Law shall be enacted in accordance with the Constitution to regulate the organization and behavior of enterprises, protect the legitimate rights and interests of enterprises, shareholders, employees and debtors, improve the modern enterprise system with Chinese characteristics, promote the entrepreneurial spirit, maintain social and economic order, and promote the development of the socialist market economy.
The revised Bankruptcy Law consists of 15 chapters, including General Provisions, Company Registration, Establishment and Organizational Structure of Limited Liability Companies, Equity Transfer of Limited Liability Companies, Establishment and Organizational Structure of Limited Liability Companies, Issuance and Transfer of Shares of Limited Liability Companies, Special Provisions on the Organizational Structure of State Investment Companies, Qualifications and Obligations of Company Directors, Supervisors and Senior Managers, Corporate Bonds, Corporate Finance and Accounting, Business Combinations, Divisions, Capital Increases and Reductions, and Dissolution and Liquidation of Companies.
It is worth noting that the newly revised bankruptcy law has improved the subscription registration system.
China's previous implementation of the registered capital subscription registration system has effectively solved the problems of excessive market access capital threshold, restricting entrepreneurship and innovation, and idle registered capital, and greatly stimulated the vitality of business entities. However, some speculators will greatly increase the amount of registered capital when registering a company to exaggerate the strength of the enterprise.
In October last year, a number of ** revealed that Hainan has 4 trillion registered capital companies, including the new concept (Sanya) Investment Group, Lianou Honghan (Hainan) Industrial Investment Group, Minhong (Sanya) Technology Investment, Lianou Honghan (Hainan) Industrial Investment Group, which caused heated discussions in the market.
Gao Simin, deputy dean of Tsinghua University Law School, pointed out that because the subscription registration system has no restrictions on the subscription amount and payment period, the supporting systems such as equity transfer are not perfect, and the relevant legal responsibilities are not in place, resulting in problems such as blind subscription, ** subscription, and excessive time limit in the subscription registration system.
The newly amended bankruptcy law clearly stipulates that shareholders shall, in accordance with the provisions of the company's articles of association, pay the amount of capital contributions subscribed by all shareholders within five years from the date of establishment of the company. At the same time, if the term of capital contribution of an enterprise registered before the implementation of the New Company Law exceeds the period specified in this Law, it shall be gradually adjusted to the period specified in this Law, unless otherwise provided by laws, administrative regulations or others.
Zhu Keli, director of the China Information Association and founding president of the National Research Institute of New Economy, believes that this adjustment is aimed at better meeting the needs of current social and economic development and promoting the modernization and standardization of the company system. On the one hand, with the in-depth development of the market economy, the improvement of the legal system of the company, as an important subject of the market economy, is particularly important for the stability and healthy development of the market. It is necessary to make appropriate adjustments and optimizations according to the needs of the actual activities. On the other hand, the imperfection of the subscription registration system has led some lawbreakers to take advantage of loopholes in the system to damage the interests of the company and other shareholders through false investments, which has seriously disrupted the negative order of the market.
Therefore, it is imperative to improve the subscription registration system and clarify the term of capital contribution, which is conducive to improving the transparency and credibility of the company and reducing the occurrence of violations of laws and regulations. ”
For existing enterprises, Zhu Keli believes that their adjustment also needs to consider the stability and sustainability of the law. Existing enterprises should not be affected too much by the adjustment of the law, causing market instability and unnecessary trouble. Therefore, the relevant departments should formulate a reasonable transition time arrangement, give enterprises enough time and space to make adjustments, simplify the company's capital reduction or cancellation process, and ensure the orderly progress of the market.
For the company itself, we should strive to learn and understand the new company law provisions and make a reasonable adjustment plan according to our own situation. At the same time, it is necessary to strengthen internal management and standardize operations to ensure that the company's business activities meet the requirements of laws and regulations. We should also strengthen communication and cooperation with relevant departments, actively respond to policy guidance and regulatory policies, and make due contributions to market stability and healthy development. ”