UPDATED INSIGHTS OF
CHINA’S COMPANY LAW
A NEW ERA OF GOVERNANCE

How forced deregistration impacts civil proceedings

Zombie companies are a longstanding issue in China’s market economy, consuming substantial market entity name resources and wasting limited regulatory resources… (Read more >)

16 January 2025

Shareholders’ right to information under new Company Law

Article 34 of the new Company Law stipulates: “Changes in company registration matters must be legally registered… (Read more >)

4 December 2024

Exploring the legal framework for SMEs

Small and medium-sized enterprises (SMEs) hold a crucial position in China’s national economy and social development. Promoting the growth of SMEs is a long-term strategic goal for China… (Read more >)

3 December 2024

Defining scope of bona fide counterparties under new Company Law

Article 34 of the new Company Law stipulates: “Changes in company registration matters must be legally registered… (Read more >)

3 December 2024

Exploring creditor protection paths under new Company Law

Behind debtor companies with no assets for execution often lie issues such as insufficient shareholder contributions, false contributions and withdrawal of capital contributions… (Read more >)

3 December 2024

Shareholder responsibilities in bankruptcies under new Company Law

The new Company Law, effective from 1 July 2024, has significantly impacted commercial entities, with shareholder responsibilities regarding capital contributions capturing the most attention… (Read more >)

3 December 2024

Merging SOEs under the new Company Law (part 2)

The previous article (part 1) provided a detailed analysis of the legal pathways and processes for mergers of state-owned enterprises (SOEs) under the new Company Law… (Read more >)

23 October 2024

DSOs’ duties and liabilities under new Company Law

Article 180 of the new Company Law stipulates that directors, supervisors and officers (DSOs) bear the obligations of fidelity and diligence to their companies… (Read more >)

23 October 2024

New Company Law’s impact on joint-stock company transition

The new Company Law revised provisions related to the establishment and organisational structure of joint-stock companies when it came into effect on 1 July 2024… (Read more >)

26 September 2024

Challenge: Appointing employee director under new Company Law

The new Company Law introduces groundbreaking provisions for the employee director system. Most notably, a requirement to include employee directors on the board of directors … (Read more >)

24 September 2024

Defining business opportunities according to new Company Law

Business opportunities are vital to a company’s survival and growth. The first time that China’s legislation prohibited the misappropriation of business opportunities was in the Company Law (2005 Revision)… (Read more >)

3 December 2024

Merging SOEs under the new Company Law (part 1)

Under article 218 of the new Company Law, a merger by absorption is a legal form of company merger where two or more companies merge into one, with the remaining relevant companies dissolved. … (Read more >)

17 September 2024

Case analysis: retroactive application of new Company Law

The new Company Law, which took effect on 1 July 2024, presents a fundamental issue: should people’s courts apply the new or the old law to corporate dispute cases in their first and second instances, where the legal … (Read more >)

6 September 2024

Overview of corporate dispute resolution under new Company Law

Corporations are the most crucial of market entities. Throughout their life cycle – from establishment, investment, financing and governance to dissolution and liquidation – they can be subject to a wide range of corporate disputes caused by issues … (Read more >)

14 August 2024

Company Law brings new classified share system to M&A

China’s newly revised Company Law will be in effect from 1 July 2024. This law introduces a classified share system for the first time, with articles 144 to 146 detailing the issuance of classified shares. This change is significant for the operation and governance of the capital market … (Read more >)

6 August 2024

Scope of directors’ liabilities under new Company Law

Effective from 1 July 2024, the new Company Law further details and reinforces directors’ accountability compared to the law’s previous version. Directors’ liabilities now cover the entire lifecycle of a company, from establishment and operation to liquidation and deregistration … (Read more >)

18 July 2024

Defending creditors’ rights under new Company Law

Economic development in recent years has been severely hindered by the pandemic, international tensions and market fluctuations, resulting in a surge in companies’ outstanding debt and a hike in litigation against them. On 1 July 2024, the amended Company Law … (Read more >)

18 July 2024

Responses to new Company Law’s timely capital contribution rules

On 29 December 2023, the Standing Committee of the 14th National People’s Congress passed the 2023 revision of the Company Law. Shortly after its release, there was a surge in capital reduction activities, mainly due to the new requirement that registered capital … (Read more >)

18 July 2024

What signals is new Company Law sending to market?

Since its implementation on 1 July 1994, the Company Law has played a crucial role in China’s reform and opening up, effectively achieving the legislative goal of encouraging investment. To date, more than 40 million companies … (Read more >)

02 July 2024

China’s in-house counsel gear up for sweeping Company Law revisions

The new Company Law’s implementation has far-reaching impacts on the corporate governance structure, especially in terms of the setting up of the supervisory board, the authority of the manager, and the liability of directors and officers. The status of directorship and the risk it carries has also changed … (Read more >)

26 June 2024

Preventing corporate governance risks under new Company Law

The new Company Law promotes the transformation of corporate governance from shareholder primacy to director primacy. This imposes governance responsibility on entrepreneurs such as directors, supervisors, officers (DSOs) and actual controllers of a company, increasing their risk of performing duties with their personal property at stake … (Read more >)

27 May 2024

Impact of the new Company Law on investment disputes

The 14th National People’s Congress Standing Committee passed a revised Company Law, which will come into effect on 1 July 2024. This revision summarises practical experience and theoretical achievements, strengthens the responsibilities of all parties, and effectively safeguards the legitimate rights and interests … (Read more >)

23 May 2024

New Company Law reforms capital system

China’s newly revised Company Law will take effect on 1 July 2024. It brings profound changes to the establishment, operation and governance of Chinese corporate entities. This article analyses the key revisions regarding the company capital system. It highlights the changes, risks and response measures for investors … (Read more >)

10 May 2024

Changes in shareholder rights under new Company Law

The new Company Law becoming effective on 1 July 2024 introduces many significant changes having material effect on company law practices and corporate governance, with one key revision regarding shareholder rights. Safeguarding legitimate rights of compliant shareholders, this provides additional avenues to maintain capital adequacy … (Read more >)

06 May 2024

New Company Law offers exits for minority shareholders

The new Company Law has protections for minority shareholders. If disputes arise between this group and a controlling shareholder, or a controlling shareholder suppresses the minority’s interests at management level … (Read more >)

30 April 2024

Three major amendments to new Company Law in taxation

A revision of the new Company Law was adopted on 29 December 2023 at the 14th National People’s Congress, and will come into effect on 1 July 2024. This revision will certainly have a knock-on effect on the tax treatment of company business … (Read more >)

30 April 2024

Challenges in reducing subscribed registered capital

The new Company Law has enhanced the system of registered capital subscription and registration, stipulating that limited liability companies must fully pay up their registered capital within five years from their establishment, while joint-stock limited companies must fully pay up their capital upon establishment … (Read more >)

26 March 2024

The right to company name under new Company Law

Acompany’s name reflects its image, reputation and value. Through the name of the company, people can infer the quality of the company’s products and management level. But the current Company Law has no explicit provisions on the company’s right to name … (Read more >)

26 March 2024

Company Law amendments: highlights and shortcomings

The 2023 amendments to China’s Company Law make substantial additions and modifications to the original, spanning 112 articles. In many aspects, the revised law represents a significant legislative step-up; but in others, it is also unfortunately inadequate … (Read more >)

20 March 2024

Governance and foreign-invested enterprises under new Company Law

Following the implementation of the Foreign Investment Law, the three previous laws governing foreign investment – the Law on Chinese-foreign Equity Joint Ventures, the Law on Foreign-capital Enterprises, and the Law on Chinese-foreign Contractual Joint Ventures – have been abolished. On 29 December 2023, the Standing Committee of the National People’s Congress passed the new Company Law, which will come into effect on 1 July 2024 … (Read more >)

12 March 2024

New laws tighten DSOs’ criminal compliance obligations

The revised Company Law was passed by the Standing Committee of the National People’s Congress (SCNPC) on 29 December 2023, marking the most extensive amendments to the Company Law since 1993 … (Read more >)

11 March 2024

Revamp of corporate capital regime under revised Company Law

After multiple rounds of deliberations, the fourth draft amendment to China’s Company Law was formally adopted on 29 December 2023 and will come into effect on 1 July 2024 … (Read more >)

06 March 2024

On 29 December 2023, the Standing Committee of the National People’s Congress of China promulgated the amended Company Law, after its deliberation of four versions of draft amendments in the past three years. The new Company Law will come into force on 1 July 2024.

The new Company Law not only governs new companies established after its effective date, but also has significant implications on existing companies … (Read more >)

04 March 2024

Key concepts analysis of new Company Law

The new Company Law was recently approved. For this article, the author carried out a thorough analysis of the law to interpret it and facilitate its smooth implementation. The analysis is based on two types of books: those published by the legislature; and judicial interpretations issued by the Supreme People’s Court for understanding and applicatione … (Read more >)

29 January 2024

Countdown for insurers under Foreign Investment Law

Afive-year transitional period for compliance with the new unified Foreign Investment Law – requiring foreign-invested companies to adjust their organisational form and structure in accordance with the Company Law – ends on 31 December 2024 … (Read more >)

26 January 2024

The Company Law (Third Review Draft), deliberated by the 5th session of the Standing Committee of the 14th National People’s Congress on 1 September 2023, for the first time adds a provision (article 224) stating: “A company shall reduce its registered capital by reducing the amount of capital contributed, or shares held by shareholders, in proportion to their capital contribution or shareholding, except as otherwise provided for by any law.” … (Read more >)

11 December 2023

Equity transfers under revised company law

The much anticipated Company Law of China (Third Draft for Revision) was reviewed by the Standing Committee of the National People’s Congress and opened for public comment on 1 September 2023 … (Read more >)

11 December 2023