The State Administration for Market Regulation Issues the “Implementation Measures for Company Registration Administration” (Mainland China)

In order to regulate company registration administration, protect transaction security, and optimize the business environment, the State Administration for Market Regulation issued the Implementation Measures for Company Registration Administration (hereinafter referred to as the “Measures”) on December 20, 2024, which will come into effect on February 10, 2025.  There are a total of 29 articles, with the following key points ^[1] :

I. Clarification of Company Registration Management Requirements

The Measures clearly stipulate that applicants are responsible for the authenticity, legality, and validity of the materials submitted for company registration and filing.  Additionally, the new Company Law stipulates that if a company’s capital contribution period or registered capital is significantly abnormal, it may be required to make timely adjustments in accordance with the law.  The Measures further detail the conditions under which the authenticity and reasonableness of a company’s registered capital must be assessed, including scenarios such as a capital contribution commitment period exceeding thirty years, a registered capital of more than 1 billion RMB, or other situations that are clearly inconsistent with objective common sense.

II. Further Refinement of Registered Capital Payment Regulations

In response to the five-year capital contribution period stipulated in the new Company Law, the Measures provide more detailed provisions: the capital contribution subscribed by all shareholders of a limited liability company must be fully paid within five years from the date of the company’s establishment, while the promoters of a company limited by shares must fully pay for the shares they subscribed to before the company is established.  For limited liability companies increasing their registered capital, shareholders must pay the additional capital within five years from the date of the registered capital change.  In the case of companies limited by shares issuing new shares to increase registered capital, the company must complete the registration of the capital change after all shareholders have fully paid for the new shares.

Moreover, for existing companies, the Measures stipulate that limited liability companies registered before June 30, 2024, with a remaining capital contribution period exceeding five years starting from July 1, 2027, must adjust their remaining contribution period to five years by June 30, 2027.  If the remaining contribution period is less than five years or the registered capital has been fully paid, no adjustment is required.  For companies limited by shares, those registered before June 30, 2024, must ensure that their promoters or shareholders fully pay for the subscribed shares by June 30, 2027.

III. Strengthening the Filing Obligations of Companies

Regarding corporate governance, the Measures strengthen relevant filing obligations.  It stipulates that if a company sets up an audit committee, it must include information about the directors serving as members of the audit committee when filing directors.  Furthermore, companies should file registration contact persons to ensure effective communication.  In cases where the directors, supervisors, and senior executives of a company do not meet the qualification requirements specified in the new Company Law, they should promptly resign and complete the necessary filings.

IV. Introduction of an Erasing System

In practice, it is not uncommon for a company’s legal representative, directors, supervisors, senior executives, and shareholders to face difficulties in enforcing judgments after winning disputes related to registration changes.  To address this, the Measures introduce an Erasing System.  This system stipulates that if a people’s court issues an enforcement notice to a company registration authority to assist in erasing the information of legal representatives, directors, supervisors, senior executives, shareholders, or branch managers, the company registration authority shall, in accordance with the law, publicly announce the erased information through the National Enterprise Credit Information Publicity System.

[1]  The State Administration for Market Regulation (AMR) issues the “Implementation Measures for Company Registration Administration.”https://www.samr.gov.cn/xw/zj/art/2024/art_4e7e2e932c94451992bfb3369aa6070a.html