The revision of the “Company Law of the People’s Republic of China” will come into effect on July 1, 2024

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Since the “Company Law” is adopted on December 29, 1993, it has undergone multiple revisions. On December 29, 2023, the 7th meeting of the 14th National People’s Congress Standing Committee voted to pass the newly revised “Company Law” (hereinafter referred to as the “2024 Company Law”), which will come into effect on July 1, 2024. The 2024 Company Law has made significant adjustments compared to the current one in many aspects, such as the company capital system, shareholder’s contribution responsibility, protection of minority shareholder’s rights and interests, organizational structure, effectiveness of company resolutions, company registration and etc..

Article	Title	Key points
48	Forms of investment	In addition to currency, in kind, intellectual property, and land use rights, two new forms of investment have been added, which are equity and debt.
47	Due time of capital subscription	The amount of capital contributions subscribed for by all the shareholders shall, according to the articles of association, be fully paid up by the shareholders within 5 years as of the date of establishment.
49\50	Compensation Liability for Failure to subscribe capital contributions on time	• If a shareholder fails to make its capital contributions on schedule and in full amount, it shall, apart from making full amount capital contributions to the company, be liable for compensation for the losses it causes to the company. • Where any shareholder fails to make actual capital contributions according to the provisions of the articles of association, or the actual value of non-monetary property for actual capital contributions is obviously lower than the amount of capital contributions subscribed for at the time of establishment of a limited liability company, other shareholders at the time of the establishment shall bear joint and several liability with such shareholder to the extent of the insufficient capital contributions.
51	The board of directors has the responsibility to call up capital contributions.	• After a limited liability company is established, the board of directors shall verify the capital contributions of shareholders. If it finds that any shareholder has not made capital contributions on schedule and in full amount as provided for in the articles of association, the company shall send a written notice of call to the shareholder to call up capital contributions. • Where any loss is caused to the company due to failure to fulfill the obligations as prescribed in the preceding paragraph in a timely manner, the responsible director shall make compensation.
52	System to guarantee shareholders’ rights	• Where any shareholder fails to make capital contributions on the date of capital contribution as provided for in the articles of association, and a company issues a written notice of call for capital contribution according to the first paragraph of the preceding Article, it may specify the grace period for the capital contribution, which shall be not less than 60 days as of the issuance of the notice of call. If, upon the expiration of the grace period, the shareholder still has not fulfilled the obligation of capital contribution, the company may, upon a resolution of the board of directors, send a notice of forfeiture to the shareholder, and the notice shall be given in written form. As of the issuance of the notice, the shareholder shall forfeit its the equities for which the capital contribution has not been paid. • The forfeited equities in accordance with the provisions of the preceding paragraph shall be transferred according to law, or the registered capital thereof shall be reduced, and the equities shall be written off. If the equities are not transferred or written off within 6 months, other shareholders of the company shall make corresponding capital contributions in full amount in proportion to their capital contributions. • If the shareholder has any dissent to the forfeiture of rights, it shall file a lawsuit with the people’s court within 30 days as of the receipt of the notice of forfeiture.
53	Liability for withdrawing capital contributions	The shareholder shall return the capital contributions withdrawn. If it causes any loss to the company, the responsible directors, supervisors and senior executives shall bear the joint and several liability with the shareholder.
54	Accelerate the deadline of making capital contributions	Where a company is unable to pay off the due debts, the company or the creditors of the due credits may request the shareholders who have subscribed for the capital contributions but whose time limit for capital contributions has not expired to make capital contributions in advance.

In addition, Article 55 and Article 56 of the 2024 Company Law clearly stipulate that the information recorded in the capital contribution certificate and shareholder registration list shall include “the name or title of the shareholder, the amount of subscribed and actually paid capital, the method and date of capital contribution”.