On December 29, 2023, the Seventh Session of the Fourteenth National People's Congress Standing Committee voted to pass the newly revised Company Law, which will come into effect on July 1, 2024.
The most significant change in this revision is the improvement of the subscribed capital registration system for limited companies, which clearly stipulates that all shareholders must fully pay up the subscribed amount of capital within five years from the establishment of the company, as specified in the company's articles of association. Additionally, companies that were registered and established before the implementation of the new Company Law must also gradually adjust to comply with the deadlines set forth in the law.
In other words, the new Company Law imposes a five-year deadline for full payment of capital, applicable not only to newly established companies but also to previously registered companies. Therefore, all business owners should take note! For companies established before the enactment of the new law that have not yet fully paid up their registered capital, whether to gradually adjust or reduce capital should be determined based on the specific circumstances of each enterprise, and appropriate strategies should be formulated as soon as possible.