The new Chinese Company Law comes into effect from 1 March 2014 revises the content about registered capital and paid-in capital. The main changes are as follows:
1. The paid-in capital shall not be listed on business license anymore.
2. The registered capital can be injected as stipulated in the Company’s Articles of Association instead of being injected with certain percentage within certain period as stipulated by the old Company Law.
3. There is no minimum registered capital regulated in the new Company Law.
Lee & Lee Associates Insight: There are some points need to be noted:
a) The paid-in capital isn’t shown in the business license means there is no need to update the business license with a capital verification report each time after the capital is injected. However, some banks may still need the capital verification report when the Company uses the foreign currency in the capital account.
b) The registered capital still needs to be fully injected in the valid period of the business license.
c) Although the minimum registered capital requirement is canceled in the new Company Law , it still says” If any law or administrative regulation prescribes a minimum amount of registered capital, the provisions of that law or administrative regulation should be followed.” So, when a company is established, the minimum registered capital that can be accepted by competent authorities still need to be considered.
