On 28 December 2013, the Standing Committee of National People’s Congress released the Amendment to the PRC Company Law (the “Amendment”), which will go into effect on 1 March 2014. The Amendment revises the paid-in capital registration system, cancels the minimum registered capital requirement, and simplifies the administrative procedures for establishing a company.
The Amendment echoes the State Council’s Institutional Reform and Functional Transformation Plan issued last March, which sets out the principles for reforming Chinese company law system. It also called for a simplification of company registration procedures.
Even before the Amendment was released, many local-level authorities had already begun revising company registration rules. With further economic reforms implemented by the central government, we anticipate more implementing regulations from the State Administration for Industry and Commerce (“SAIC”) and its local counterparts (“Local AIC”) on company registration to move reforms forward.
Click on the PDF version below to read more about the key points of the amendment and the impact on foreign-invested companies.
Compared to the current Company Law, the Amendment makes three major changes, relating to:
1. Capital Registration System
2. Minimum Capital Requirements
3. Registration Requirements