On December 25, 2023, the draft amendment to the Company Law was submitted for the fourth review. Previously, the revised draft of the Company Law was submitted to the 32nd Session of the Standing Committee of the 13th National People's Congress for initial deliberation in December 2021, to the 38th Session of the Standing Committee of the 13th National People's Congress for second deliberation in December 2022, and to the Fifth Session of the Standing Committee of the 14th National People's Congress for third deliberation in August 2023.
In response to the provisions on the subscription of registered capital, compared with the third draft of the draft, the fourth draft further improves the company's capital contribution system and strengthens the responsibility of shareholders for capital contribution. First, on the basis of stipulating that the subscription period for the capital contribution of the shareholders of a limited liability company shall not exceed five years, it is clarified that laws, administrative regulations and decisions can make special provisions on the capital contribution period of the shareholders of a limited liability company, so as to set a subscription period shorter than five years for key industries and fields to leave institutional spaceThe second is to stipulate that the promoter of the shares shall pay the full amount of the shares subscribed for by the company before the establishment of the companyThe third is to increase the penalties for not publicizing or not truthfully disclosing relevant information such as capital contributions in accordance with regulations.
Although the current subscription system has reduced the economic pressure on entrepreneurs and enhanced their enthusiasm for starting a business, it also has its disadvantages, which have caused an adverse impact on the fair market environment and are not conducive to maintaining the security of market transactions. After the subscription system, the investor will transfer most of its own operational and speculative risks to creditors, and it can rely on limited liability to get out. The revised opinions further strengthen the responsibility of shareholders to make capital contributions, put integrity in production and operation first, do what we can, do what we can, and continuously promote a fair and benign market operation environment.
On December 29, 2023, the fourth draft of the revised Company Law will be officially deliberated and passed, and we will continue to pay attention to it!