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New Registered Capital Rules under the Revised Company Law of the PRC

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New Registered Capital Rules under the Revised Company Law of the PRC

The revised Company Law of the PRC, passed by the Seventh Session of the Standing Committee of the Fourteenth National People’s Congress of the PRC, has come into force on 1 July 2024.  

According to Article 47 and Article of 52 of the revised Company Law, the registered capital subscribed by all the shareholders of a limited liability company shall be fully contributed within 5 years upon incorporation of the company. If the shareholders fail to pay their subscribed registered capital within the prescribed time and grace period, they may lose the equity of the unpaid registered capital.

The promoters of a joint stock limited company shall pay the share subscription in full before the incorporation of the company in accordance with Article 98 of the revised Company Law.

Meanwhile, the revised Company Law also stipulates that companies incorporated before the implementation of the revised Company Law shall adjust their contribution periods accordingly if their capital contribution periods are not in line with the revised Company Law. For guiding purpose, the State Council of the PRC issued the Regulations on the Implementation of the Registered Capital Registration Management System of the Company Law of the PRC on 1 July 2024, which clarifies the rules for adjusting capital contribution period of existing companies. The specific rules are as follows:

  1. Normal Existing Companies

    A normal limited liability company incorporated before 30 June 2024 must adjust its remaining capital contribution period to 5 years or less before 30 June 2027 and amend its articles of associations if its remaining contribution period exceeds 5 years from 1 July 2027. The shareholders must fully complete the capital contribution within the adjusted capital contribution period. If the remaining contribution period of a limited liability company is less than 5 years from 1 July 2027, then the adjustment of capital contribution period is not required.

    The promoters of a normal joint stock limited company incorporated before 30 June 2024 must fully pay their subscribed shares before 30 June 2027.

  2. Abnormal Existing Companies

    If a company incorporated before 30 June 2024 is obviously abnormal on capital contribution period and registered capital amount, the company registration authority may make judgement base on the specific situations of the company and require the timely adjustment of the company.  

  3. Exceptions

    Companies incorporated before 30 June 2024, which are related to national interests or major public interests, may, with the consent of the market supervision and administration department of the State Council as proposed by the competent department of the State Council or the government at provincial level, contribute capital in accordance with their original capital contribution period.

  4. Information Disclosure

    Companies shall publicly disclose the adjustment of the amount of registered capital subscribed and paid by the shareholders, contribution method and contribution period, or the adjustment of the number of shares subscribed by the promoters of a joint stock company, etc. through the National Enterprise Credit Information Disclosure System within 20 working days from the date the information being formed.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.


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