The new "Company Law" will come into effect on July 1, and many people have paid attention to the revision of the paid-in system. The new Company Law clearly stipulates that the 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.
Within half a month, tens of thousands of companies reduced their capital
If the registered capital is paid-in, many companies say that they are under great pressure, so they will reduce the registered capital. There was even a reduction in the registered capital from 10 million to 50,000. According to reports, data shows that from December 29, 2023 to January 16, 2024, in more than half a month, there will be more than 120,000 enterprises completed the reduction of registered capital.
It should be noted that Article 50 of the Company Law, as amended in 2023, stipulates that if a shareholder fails to actually pay the capital contribution in accordance with the provisions of the articles of association at the time of the establishment of a limited liability company, or the actual value of the non-monetary property actually contributed is significantly lower than the subscribed capital contribution, the other shareholders at the time of establishment shall be jointly and severally liable with the shareholder to the extent of insufficient capital contribution.
In the context of the new Company Law, the legal risks of "directors, supervisors and senior executives" are ubiquitous. If they are not careful, the "directors, supervisors, and senior executives" may bear a huge amount of liability, or even joint and several liability.
One of the highlights of the new Company Law is that it strengthens the responsibilities and obligations of "directors, supervisors and senior executives" of companies, and the weight of their liability for compensation has completely surpassed the provisions of the previous Company Law, and is also very different from the company laws of other countries. There are as many as 11 articles in the new Company Law on the liability of "directors, supervisors and senior executives", ranging from the shareholders' capital contribution at the time of the company's establishment, to the distribution of profits, capital reduction, performance of duties in the course of the company's operation, to the company's liquidation procedures.
1.If the director fails to verify and call for the shareholder's capital contribution, he shall be liable for compensation to the company
Article 51 stipulates that after the establishment of a limited liability company, the board of directors shall verify the capital contribution of the shareholder, and if it is found that the shareholder has failed to pay the capital contribution stipulated in the articles of association of the company in full and on time, the company shall issue a written reminder to the shareholder to call for the capital contribution. If the company fails to perform the obligations specified in the preceding paragraph in a timely manner and causes losses to the company, the responsible director shall be liable for compensation.
It shall be jointly and severally liable for the withdrawal of capital contributions by shareholders.
Article 53 of the new Company Law stipulates that after the establishment of a company, shareholders shall not withdraw their capital contributions. In case of violation of the provisions of the preceding paragraph, the shareholders shall return the capital contributions withdrawn; If losses are caused to the company, the responsible directors, supervisors and senior managers shall be jointly and severally liable for compensation with the shareholders.
3.PersistenceIf the company suffers losses due to the mistake of performing duties, the company shall be liable for compensation.
Article 188 of the new Company Law stipulates that directors, supervisors and senior managers shall be liable for compensation if they violate the provisions of laws, administrative regulations or the articles of association of the company in the performance of their duties and cause losses to the company.
If an infringement occurs in the performance of duties, the applicant shall be liable for compensation.
Article 191 of the new Company Law stipulates that if a director or senior manager performs his or her duties and causes damage to others, the company shall be liable for compensation; Directors and senior managers shall also be liable for compensation if they are intentional or grossly negligent.
5.Directors are responsible for compliance with the resolutions of the Board of Directors.
Paragraph 2 of Article 125 of the new Company Law stipulates that directors shall be liable for the resolutions of the board of directors. If the resolution of the board of directors violates laws, administrative regulations, the articles of association of the company or the resolution of the shareholders' meeting, and causes serious losses to the company, the directors participating in the resolution shall be liable for compensation to the company; If it is proved that he or she has expressed dissent during the vote and recorded it in the minutes of the meeting, the director may be exempted from liability.
6.If the "directors, supervisors and senior executives" distribute profits in violation of regulations, they shall be liable for compensation to the company.
Article 211 of the new Company Law stipulates that if a company distributes profits to shareholders in violation of this regulation, the shareholders shall return the profits distributed in violation of the provisions to the company; If losses are caused to the company, the shareholders and the directors, supervisors and senior managers who are responsible shall be liable for compensation.
7.If the "directors, supervisors and senior executives" reduce their capital in violation of regulations, they shall be liable for compensation to the company.
Article 226 of the new Company Law stipulates that if the registered capital is reduced in violation of the provisions of this Law, the shareholders shall return the funds they have received, and if the capital contribution of the shareholders is reduced, it shall be restored to its original state; If losses are caused to the company, the shareholders and the directors, supervisors and senior managers who are responsible shall be liable for compensation.
8.If the "directors, supervisors and senior executives" violate the related party transactions and damage the interests of the company, they shall be liable for compensation to the company.
Article 22 of the new Company Law stipulates that the controlling shareholders, actual controllers, directors, supervisors and senior managers of a company shall not use their affiliated relationships to harm the interests of the company. Anyone who violates the provisions of the preceding paragraph and causes losses to the company shall be liable for compensation.
9.If "directors, supervisors and senior executives" provide financial assistance in violation of regulations, they shall be liable for compensation to the company
Article 163 of the new Company Law stipulates that a company shall not provide gifts, loans, guarantees or other financial assistance for others to obtain the shares of the company or its parent company, except for the implementation of the company's employee stock ownership plan.
10.If the director fails to perform the liquidation obligation in a timely manner, he shall be liable for compensation to the company or creditors.
Article 232 of the new Company Law stipulates that if a company is dissolved due to the provisions of Items 1, 2, 4 and 5 of Paragraph 1 of Article 229 of this Law, it shall be liquidated. The directors are the liquidation obligors of the company and shall form a liquidation group to carry out liquidation within 15 days from the date of the occurrence of the cause of dissolution. The liquidation group shall be composed of directors, unless otherwise provided in the articles of association of the company or the resolution of the shareholders' meeting to elect another person. If the liquidation obligor fails to perform the liquidation obligation in a timely manner and causes losses to the company or creditors, it shall be liable for compensation.
11.If the director neglects to perform the liquidation duties, he shall be liable for compensation to the company or creditors.
Article 238 of the new Company Law stipulates that the members of the liquidation group shall have a duty of loyalty and diligence in performing their liquidation duties. If a member of the liquidation group neglects to perform his or her liquidation duties and causes losses to the company, he or she shall be liable for compensation; If the creditor causes losses due to intentional or gross negligence, it shall be liable for compensation.
Special reminder, pay attention to the risk of capital reduction!
Before reducing the capital, remember to find out whether it involves paying taxes, so as not to leave tax risks!
Remember to perform the relevant procedures to inform creditors during the capital reduction to avoid leaving legal risks!
If it involves the reduction of non-monetary assets, you must do a good job of relevant tax planning!