The new Company Law, which will come into effect on July 1, 2024, stipulates that if the company does not wish to reduce its capital or affect its cash flow, if the company's shareholders hold intellectual property rights that meet the requirements for capital contribution, they may consider making supplementary payments in the form of intellectual property contributions to complete the capital contribution obligations. There may be detailed requirements for IP investment in various places. ”
Article 48 of the new Company Law stipulates that "shareholders may make capital contributions in monetary terms, or in the form of non-monetary assets such as physical objects, intellectual property rights, land use rights, equity rights, creditor's rights, etc., which can be valued in monetary terms and can be transferred in accordance with the law; However, there is an exception for property that is not allowed to be used as capital contribution as stipulated by laws and administrative regulations. Accordingly, if the two conditions of "can be valued in currency" and "can be transferred in accordance with the law" can be used for capital contribution if the two conditions of "can be valued in currency" and "can be transferred according to law" are met at the same time. At the same time, the 2014 version of the Company Law deleted the provision that "the monetary contribution of all shareholders shall not be less than 30% of the registered capital of a limited liability company", and abolished the restriction on the proportion of intellectual property contributions.
As an intangible asset, the value of intellectual property fluctuates greatly depending on market changes. Therefore, as mentioned above, the prerequisites that must be met for the intellectual property to be used as capital contribution include that it can be appraised for value, is a property that can be used as a capital contribution by law, and can be transferred to the company in accordance with the law, and at the same time, the ownership of intellectual property rights is owned by shareholders (natural persons or subsidiaries), and the articles of association of the company must clearly stipulate that intellectual property contributions can be made and registered with the market supervision and administration department.