The new Company Law effective in 2024 adjusts the subscribed-capital system. It requires all shareholders of a limited liability company to fully pay their subscribed capital contributions within five years after the company’s establishment, in accordance with the articles of association. Promoters of a joint stock company shall fully pay for their subscribed shares before the company is established.
It also provides that companies registered before the new Company Law took effect (existing companies) whose contribution periods exceed the statutory period shall gradually adjust those periods to comply with the law:
For companies registered on or before June 30, 2024, if the remaining contribution period of a limited liability company exceeds five years as calculated from July 1, 2027, the company shall, by June 30, 2027, adjust the remaining period to no more than five years and record it in its articles of association. Shareholders shall fully pay their subscribed contributions within the adjusted period. Promoters of a joint stock company shall fully pay for their subscribed shares by June 30, 2027.
Where a company’s production or operations involve national interests or major public interests, and the relevant department under the State Council or a provincial people’s government submits an opinion, the market regulation authority under the State Council may permit contributions to be made according to the original schedule.
The law further provides that where a contribution period or contribution amount is clearly abnormal, the company registration authority may require a timely adjustment in accordance with law:
Where a company’s contribution period or registered capital is clearly abnormal, the company registration authority may assess the company’s business scope, operating conditions, shareholders’ contribution capacity, principal projects, asset size, and other relevant factors. If it determines that the arrangement violates the principles of authenticity and reasonableness, it may require the company to make a timely adjustment.