The Provisions adapt the current AIC regime on company registered capital to be consistent with the Company Law Amendment.
The Provisions remove the threshold of registered capital for limited liabilities companies (including those with sole shareholder) and companies limited by shares to be in line with the Company Law Amendment.
As the Company Law Amendment allows companies to freely decide the composition and timeframe for capital contribution (which shall be stated in the articles of association), the Provisions likewise remove clauses regarding the registration of capital contribution’s disbursements, composition and calendar, except for companies specifically required by law to pay the registered capital in one lump sum on incorporation. To this end, excluding those subject to special laws, companies no longer need to submit a capital verification report to the AIC.
Under the Provisions, a company must file a record with the AIC if it changes its shareholding structure, composition of capital contribution or capital contribution schedule, which would imply the subsequent amendments of the company’s articles of association.
In addition to major changes to the capital registration system in line with the Company Law Amendment, the Provisions revoke the Measures for Registration Administration of Capital Contribution with Equity Interests, and the Administrative Measures for Corporate Debt-for-Equity Swap Registration, issued by the SAIC on January 14, 2009, and November 23, 2011, respectively (this latter regulation was commented in our newsletter of December 2011). However, their main clauses are incorporated in the Provisions to preserve the legal grounds for these two forms of capital contributions.
The Provisions also apply to foreign-invested companies, expect as otherwise provided by law.
Date of issue: February 20, 2014. Date of effectiveness: March 1, 2014.