Company Law of the People's Republic of China (Revised in 2023)
Company Law of the People's Republic of China (Revised in 2023)
Company Law of the People's Republic of China (Revised in 2023)
Order of the President of the People's Republic of China No. 15
December 29, 2023
The Company Law of the People's Republic of China has been revised and adopted by the Seventh Session of the Standing Committee of the 14th National People's Congress of the People's Republic of China on December 29, 2023, and is hereby promulgated and shall come into effect on July 1, 2024.
Xi Jinping, President of the People's Republic of China
Company Law of the People's Republic of China
(Adopted at the Fifth Session of the Standing Committee of the Eighth National People's Congress on December 29, 1993; amended for the first time in accordance with the Decision on Amending the Company Law of the People's Republic of China at the 13th Session of the Standing Committee of the Ninth People's Congress on December 25, 1999; amended for the second time in accordance with the Decision on Amending the Company Law of the People's Republic of China at the 11th Session of the Standing Committee of the Tenth National People's Congress on August 28, 2004; revised for the first time at the 18th Session of the Standing Committee of the Tenth National People's Congress on October 27, 2005; amended for the third time in accordance with the Decision on Amending Seven Laws Including the Law of the People's Republic of China on the Protection of the Marine Environment at the Sixth Session of the Standing Committee of the 12th National People's Congress on December 28, 2013; amended for the fourth time in accordance with the Decision on Amending the Company Law of the People's Republic of China at the Sixth Session of the Standing Committee of the 13th National People's Congress on October 26, 2018; and revised for the second time at the Seventh Session of the Standing Committee of the 14th National People's Congress on December 29, 2023)
Contents
Chapter I General Provisions
Chapter II Company Registration
Chapter III Establishment and Organizational Structure of Limited Liability Companies
Section 1 Establishment
Section 2 Organizational Structure
Chapter IV Transfer of Equity in Limited Liability Companies
Chapter V Establishment and Organizational Structure of Joint Stock Limited Companies
Section 1 Establishment
Section 2 Shareholders' Meeting
Section 3 Board of Directors and Company Manager
Section 4 Board of Supervisors
Section 5 Special Provisions on the Organizational Structure of Listed Companies
Chapter VI Issuance and Transfer of Shares in Joint Stock Limited Companies
Section 1 Issuance of Shares
Section 2 Transfer of Shares
Chapter VII Special Provisions on the Organizational Structure of State-Invested Companies
Chapter VIII Qualifications and Obligations of Company Directors, Supervisors and Senior Officers
Chapter IX Corporate Bonds
Chapter X Corporate Finance and Accounting
Chapter XI Corporate Merger, Division, and Increase and Decrease in Registered Capital
Chapter XII Company Dissolution and Liquidation
Chapter XIII Branches of Foreign Companies
Chapter XIV Legal Liability
Chapter XV Supplementary Provisions
Chapter I General Provisions
Article 1 The Company Law of the People's Republic of China (hereinafter referred to as the "Law") is formulated in accordance with the Constitution to regulate the organization and activities of companies, protect the lawful rights and interests of companies, shareholders, employees and creditors, improve the modern enterprise system with Chinese characteristics, advocate entrepreneurship, maintain the social economic order, and promote the development of the socialist market economy.
Article 2 For the purposes of this Law, the term "company" refers to a limited liability company or a joint stock limited company established within the territory of the People's Republic of China in accordance with this Law.
Article 3 A company is an enterprise legal person which has independent legal person property and enjoys legal person property rights. A company shall be liable for its debts to the extent of all its assets.
The lawful rights and interests of a company are protected by law from infringement.
Article 4 A shareholder of a limited liability company is liable to the company to the extent of its subscribed capital contribution. A shareholder of a joint stock limited company is liable to the company to the extent of the shares it has subscribed for.
Shareholders of a company are entitled under the law to rights including the return on equity, participation in the making of material decisions, and selection of managers.
Article 5 A company shall formulate its articles of association in accordance with the law. The articles of association shall be binding on the company and its shareholders, directors, supervisors, and senior officers.
Article 6 A company shall have its own name. A company's name shall comply with relevant national regulations of the State.
The right of a company to its name is protected by law.
Article 7 A limited liability company established in accordance with this Law shall include the words "limited liability company" or "limited company" in its name.
A joint stock limited company established in accordance with this Law shall include the words "joint stock limited company" or "joint stock company" in its name.
Article 8 A company's domicile shall be where its main administrative organization is located.
Article 9 A company's business scope shall be defined in its articles of association. A company may change its business scope by amending its articles of association.
Where the business scope of a company includes any item subject to approval pursuant to any law or administrative regulations, the approval shall be obtained in accordance with the law.
Article 10 The legal representative of a company shall, as stipulated in the articles of association, be the director or company manager representing the company in the execution of company affairs.
If a director or the company manager serving as the legal representative resigns, it is considered a simultaneous resignation from the position of the legal representative.
In the event of the resignation of the legal representative, the company must appoint a new legal representative within 30 days from the date of the legal representative's resignation.
Article 11 The legal consequences of civil activities conducted by a company's legal representative in the name of the company shall be borne by the company.
Restrictions on the powers of a company's legal representative by the company's articles of association or shareholders' meeting shall not be enforceable against bona fide third parties.
If a company's legal representative, in the course of performing duties, causes harm to others, the company shall bear civil liability. After assuming civil liability, the company may seek compensation from the legal representative at fault in accordance with the law or the company's articles of association.
Article 12 A limited liability company that seeks to convert into a joint stock limited company shall satisfy the conditions prescribed in this Law for joint stock limited companies. A joint stock limited company that seeks to convert into a limited liability company shall satisfy the conditions prescribed in this Law for limited liability companies.
In either of the aforementioned cases, the claims and debts of the company prior to the conversion shall be succeeded by the company after the conversion.
Article 13 A company may establish subsidiaries. A subsidiary enjoys legal-person status and shall independently bear its own civil liability in accordance with the law.
A company may establish branches. A branch does not enjoy legal-person status and its civil liability shall be borne by the company.
Article 14 A company may invest in other enterprises.
Where any law provides that a company shall not become a capital contributor that shall bear joint and several liability for the debts of the invested enterprise, such provisions shall apply.
Article 15 If a company intends to invest in any other enterprise or provide a guarantee for any other person, a resolution shall be adopted, as stipulated in the company's articles of association, by the company's board of directors or shareholders' meeting; where the articles of association prescribe any limit on the total amount of investments or guaranties allowed, or on the amount of a single investment or guarantee allowed, the said total amount or amount shall not exceed the limit prescribed.
If a company intends to provide a guarantee for any shareholder or actual controller of the company, a resolution shall be adopted by the shareholders' meeting.
No shareholder referred to in the preceding paragraph or under the control of the actual controller referred to in the preceding paragraph shall participate in voting on any matter described in the preceding paragraph. Any such resolution shall be adopted by a majority vote from the other shareholders attending the meeting.
Article 16 A company shall protect the lawful rights and interests of its employees, enter into employment contracts with its employees in accordance with the law, take out social insurance for employees, and strengthen labor protection to ensure work safety.
A company shall, through various means, enhance the professional education and in-service training of its employees to improve the quality of the workforce.
Article 17 Employees of a company shall, in accordance with the Trade Union Law of the People's Republic of China, organize a trade union, which shall carry out trade union activities and safeguard the lawful rights and interests of the employees. The company shall provide the necessary conditions for its trade union to carry out its activities. The trade union shall, on behalf of the employees, enter into collective contracts with the company with respect to matters such as remuneration, working hours, leave and rest, work safety and sanitation, insurance, and welfare and of the employees in accordance with the law.
In accordance with the Constitution and other relevant laws, a company shall establish a sound democratic management system, with the employee representative assembly as the fundamental form, and implement democratic management through the employee representative assembly or other means.
When making a decision on company restructuring, dissolution, filing for bankruptcy, or any material issue relating to its business operations, or formulating any important rule or regulation, a company shall take into account the opinions of its trade union, as well as the opinions and proposals of its employees through the employee representative assembly or other means.
Article 18 Organizations of the Communist Party of China shall be established within companies in accordance with the Constitution of the Communist Party of China and carry out Party activities. Companies shall provide the necessary conditions for Party activities.
Article 19 In conducting its business activities, a company shall abide by laws and regulations, observe social ethics and business ethics, act in good faith, and be subject to government and public oversight.
Article 20 In conducting its business activities, a company shall fully consider the interests of company employees, consumers, and other stakeholders, as well as social and public interests such as ecological environmental protection, and undertake social responsibility.
The State encourages companies to participate in social welfare activities and publish social responsibility reports.
Article 21 Shareholders of a company shall abide by laws, administrative regulations and articles of association and exercise their shareholder rights in accordance with the law, and shall not damage the interests of the company or other shareholders by abusing their shareholder rights.
A shareholder of a company shall be liable for compensation for any losses caused to the company or to other shareholders due to their abuse of shareholder rights.
Article 22 No controlling shareholder, actual controller, director, supervisor, or senior officer of a company shall harm the interests of the company through the exploitation of a related-party relationship.
Any individual who violates the preceding paragraph, resulting in losses to the company, shall be liable for compensation.
Article 23 If any shareholder of a company evades the payment of debts by abusing the company's independent status as a legal person or the limited liability of shareholders, thereby seriously damaging the interests of any creditor of the company, the shareholder shall bear joint and several liability for the debts of the company.
If a shareholder utilizes two or more companies under their control to carry out actions specified in the preceding paragraph, each of these companies shall bear joint and several liability for the debts of any of the companies.
In the case of a company with a sole shareholder, if the shareholder cannot prove the independence of the company's assets from their own, the shareholder shall bear joint and several liability for the company's debts.
Article 24 Meetings and voting of the shareholders' meeting, board of directors, and board of supervisors of a company may be conducted through electronic communication methods, unless otherwise stipulated in the company's articles of association.
Article 25 Any resolution of the shareholders' meeting or board of directors with content that violates any law or administrative regulations shall be null and void.
Article 26 If the procedure for convening a shareholders' meeting or a meeting of the board of directors, or the voting method used in such a meeting, violates any law, administrative regulations or the company's articles of association, or if any resolution adopted includes content that violates the company's articles of association, shareholders may, within 60 days from the date of adopting the resolution, request the people's court to annul it, except in cases where there are only minor defects in the procedure for convening the meeting or the voting method used in the meeting, which had no material impact on the resolution.
Shareholders that were not notified to attend a shareholders' meeting may request the people's court to annul a resolution adopted at the meeting within 60 days from the date when they became aware or should have been aware of the adoption of the resolution; if the right to annul is not exercised within one year from the date of adopting the resolution, the right to annul shall be extinguished.
Article 27 A resolution of the shareholders' meeting or board of directors shall not be established in any of the following circumstances:
(1) Where the shareholders' meeting or board of directors' meeting was not convened to make the resolution;
(2) Where the shareholders' meeting or board of directors' meeting did not vote on the matter subject to the resolution;
(3) Where the number of attendees or the voting rights held by them did not reach the number or proportion stipulated in this Law or the company's articles of association; or
(4) Where the number of those agreeing to the resolution or the voting rights held by them did not reach the number or proportion stipulated in this Law or the company's articles of association.
Article 28 If a resolution of the shareholders' meeting or board of directors of a company is declared invalid, annulled, or confirmed as not established by the people's court, the company shall apply to the company registration authority to cancel the registration already processed based on that resolution.
If a resolution of the shareholders' meeting or board of directors of a company is declared invalid, annulled, or confirmed as not established by the people's court, any civil juristic relationship created by the company with a bona fide third party based on such resolution shall be not affected.
Chapter II Company Registration
Article 29 To establish a company, an application for registration shall be filed with the company registration authority in accordance with the law.
Where any law or administrative regulations provide that the establishment of a company is subject to approval, the approval formalities shall be fulfilled in accordance with the law before the registration of the company.
Article 30 To apply for the establishment of a company, documents including a registration application and the company's articles of association shall be submitted, and the relevant materials submitted shall be truthful, legal, and valid.
If the application materials are incomplete or do not meet the statutory requirements, the company registration authority shall inform the applicant of any materials that need to be corrected or supplemented all at once.
Article 31 If an application for establishment of a company meets the establishment conditions prescribed in this Law, the company registration authority shall register the company as a limited liability company or joint stock limited company; if the application does not meet the establishment conditions prescribed in this Law, it shall not be registered as a limited liability company or joint stock limited company.
Article 32 The particulars to be registered for a company include:
(1) Name;
(2) Domicile;
(3) Registered capital;
(4) Business scope;
(5) Name of the legal representative; and
(6) Names of shareholders for a limited liability company or promoters for a joint stock limited company.
The company registration authority shall disclose a company's registered items outlined in the preceding paragraph to the public through the National Enterprise Credit Information Publicity System.
Article 33 A legally established company shall be issued a business license by the company registration authority. The date of issuance of the business license for a company shall be the date of establishment of the company.
A company's business license shall state the company's name, domicile, registered capital, business scope, and name of the legal representative, among other particulars.
The company registration authority may issue an electronic business license. An electronic business license has the same legal force as a paper-based business license.
Article 34 Any changes to the registered items of a company shall be subject to alteration registration in accordance with the law.
Any particulars to be registered by a company that have not been registered or changed without alteration registration shall not be enforceable against bona fide third parties.
Article 35 When a company applies for alteration registration, it shall submit to the company registration authority documents including an alteration registration application signed by the legal representative of the company, and the legally adopted resolution or decision regarding the alteration.
In cases where alteration registration involves amendments to the company's articles of association, the amended articles of association shall be submitted.
In the case of a change in the legal representative of the company, the alteration registration application shall be signed by the newly appointed legal representative.
Article 36 In the event of any changes to the details recorded in a company's business license, the company shall complete alteration registration before being issued a new business license by the company registration authority.
Article 37 If a company is to be terminated due to dissolution, declaration of bankruptcy, or other statutory reasons, it shall apply for deregistration to the company registration authority in accordance with the law, and the termination of the company shall be announced by the company registration authority.
Article 38 To establish a branch, the company shall file a registration application with the company registration authority to obtain a business license.
Article 39 The registration of the establishment of a company shall be revoked by the company registration authority in accordance with laws or administrative regulations if it was obtained by misstating its registered capital, submitting false documentation or using any other fraudulent means to conceal any important fact.
Article 40 A company shall, as required, publicly disclose the following details through the National Enterprise Credit Information Publicity System:
(1) The subscribed and paid-in capital, contribution methods, and contribution dates of shareholders for a limited liability company, and the quantity of shares subscribed by promoters for a joint stock limited company;
(2) Information on changes in the equity or shares of shareholders for a limited liability company and promoters for a joint stock limited company;
(3) Information on the receipt, changes, or cancellation in respect of any administrative permit; and
(4) Other information as stipulated by laws or administrative regulations.
A company shall ensure that the disclosed information outlined in the preceding paragraph is true, accurate, and complete.
Article 41 The company registration authority shall optimize the company registration process, improve registration efficiency, enhance information technology development, and promote convenient methods such as online processing, to enhance the accessibility of company registration.
The State Administration for Market Regulation shall formulate specific measures for company registration based on this Law and relevant laws and administrative regulations.
Chapter III Establishment and Organizational Structure of Limited Liability Companies
Section 1 Establishment
Article 42 A limited liability company shall be funded and established by one to 50 shareholders.
Article 43 Shareholders of a limited liability company at the time of its establishment may enter into an establishment agreement to specify their respective rights and obligations in the process of establishing the company.
Article 44 The legal consequences of any civil activities conducted by a shareholder of a limited liability company at the time of establishment for the establishment of the company shall be borne by the company.
In cases where the company is not established, the legal consequences shall be borne by the shareholders at the time of establishment; if there are two or more shareholders at the time of establishment, they shall have joint and several claims and bear joint and several liabilities.
For civil liability arising from any civil activities conducted by a shareholder at the time of establishment, in their own name, for the establishment of the company, a third party shall have the right to choose to claim against either the company or the shareholder at the time of establishment.
If a shareholder at the time of establishment causes harm to another person due to performance of their responsibilities for the establishment of the company, the company or other faultless shareholders may seek to recover any resulting compensation liability borne by them from the shareholder at fault.
Article 45 When establishing a limited liability company, the shareholders shall jointly formulate the company's articles of association.
Article 46 The articles of association of a limited liability company shall specify the following matters:
(1) Name and domicile of the company;
(2) Business scope of the company;
(3) Registered capital of the company;
(4) Names of shareholders;
(5) Amounts, methods, and dates of capital contributions by shareholders;
(6) Internal bodies and their establishment, powers, and rules of procedure;
(7) Methods for selecting and changing the company's legal representative; and
(8) Any other matters deemed necessary to specify by the shareholders' meeting.
Shareholders shall affix their signatures or seals on the company's articles of association.
Article 47 The registered capital of a limited liability company is the total amount of capital subscribed by all shareholders as registered with the company registration authority. The subscribed capital shall be fully paid by the shareholders within five years from the date of the company's establishment as stipulated in the company's articles of association.
Where the paid-in registered capital, the minimum registered capital, or the payment deadline for capital contributions by shareholders is otherwise provided by any laws, administrative regulations, or decisions of the State Council, those provisions shall prevail.
Article 48 Shareholders may contribute capital in cash, in kind, or with intellectual property rights, land use rights, equity, debt claims, or other non-monetary assets which can be valued in monetary terms and legally transferred, except for assets not eligible for capital contribution under any other law or administrative regulations.
The value of any non-monetary asset used for capital contribution shall be appraised and verified, and shall not be overestimated or underestimated. Where any law or administrative regulations provide for the appraisal of values, such provisions shall apply.
Article 49 Each shareholder shall pay the capital contribution they subscribed in full and on time as stipulated in the articles of association.
Shareholders making contributions in cash shall deposit the full amount into a bank account opened by the limited liability company. Those making contributions with non-monetary assets shall complete the procedures for the transfer of property rights in accordance with the law.
Shareholders that fail to contribute the capital in full and on time shall, in addition to making full payment to the company, also be liable for compensating the losses caused to the company.
Article 50 When a limited liability company is established, if a shareholder fails to make actual payment of capital contributions as stipulated in the company's articles of association, or if the actual value of non-monetary assets actually contributed falls significantly below the subscribed capital amount, the other shareholders at the time of establishment shall bear joint and several liability with that shareholder within the shortfall in contributions.
Article 51 After the establishment of a limited liability company, the board of directors shall verify the shareholders' capital contributions. If it is found that a shareholder has not paid the contribution on time and in full as stipulated in the company's articles of association, the company shall issue a written payment demand to that shareholder for the outstanding amount.
In the case of failure to fulfill the obligation stipulated in the preceding paragraph in a timely manner, resulting in losses to the company, any directors held responsible shall be liable for compensation.
Article 52 If a shareholder fails to pay contributions by the date specified in the company's articles of association, and the company issues a written payment demand in accordance with the first paragraph of the preceding Article, the company may specify a grace period for the payment in the written payment demand; the grace period shall not be less than 60 days from the date the company issues the payment demand. Upon expiration of the grace period, if the shareholder still fails to fulfill the contribution obligation, the company, through a resolution of the board of directors, may issue a notice of forfeiture to the shareholder, and such notice shall be in writing. From the date of the notice, the shareholder loses the rights to the unpaid capital shares.
The shares forfeited according to the preceding paragraph shall be transferred in accordance with the law or the registered capital shall be reduced accordingly with the cancellation of those shares; if the transfer or cancellation is not completed within six months, the other shareholders of the company shall fully pay the shortfall in proportion to their respective contributions.
If the shareholder has objections to the forfeiture, they shall initiate legal action in the people's court within 30 days from the date of receiving the notice of forfeiture.
Article 53 After the establishment of the company, shareholders shall not withdraw their paid-in capital contributions.
In the event of a violation of the preceding paragraph, the shareholder in violation shall return the withdrawn contribution amount; if such action causes losses to the company, any directors, supervisors, and senior officers of the company held responsible shall bear joint and several liability for compensation along with that shareholder.
Article 54 If a company is unable to meet its matured obligations, the company or the creditors of the matured debts shall have the right to demand early contributions from shareholders whose subscribed capital contributions are not yet due for payment.
Article 55 After the establishment of a limited liability company, each shareholder shall be issued a capital contribution certificate, which shall record the following details:
(1) Name of the company;
(2) Date of establishment of the company;
(3) Registered capital of the company;
(4) Name of the shareholder, their subscribed and paid-in capital amounts, contribution method, and contribution date; and
(5) Serial number of the capital contribution certificate and date of issuance.
The capital contribution certificate shall bear the signature of the legal representative and the company seal.
Article 56 A limited liability company shall maintain a register of members, which shall record the following details:
(1) Name and domicile of each shareholder;
(2) Each shareholder's subscribed and paid-in capital amounts, contribution method, contribution date;
(3) Serial number of each capital contribution certificate; and
(4) Date of receipt or loss of shareholder status for each shareholder.
Shareholders listed in the register of members may, based on this register, claim and exercise their shareholder rights.
Article 57 Shareholders are entitled to inspect and copy the company's articles of association, register of members, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors, and financial accounting reports.
Shareholders may request to inspect the company's accounting books and accounting documents.
......
Order of the President of the People's Republic of China No. 15
December 29, 2023
The Company Law of the People's Republic of China has been revised and adopted by the Seventh Session of the Standing Committee of the 14th National People's Congress of the People's Republic of China on December 29, 2023, and is hereby promulgated and shall come into effect on July 1, 2024.
Xi Jinping, President of the People's Republic of China
Company Law of the People's Republic of China
(Adopted at the Fifth Session of the Standing Committee of the Eighth National People's Congress on December 29, 1993; amended for the first time in accordance with the Decision on Amending the Company Law of the People's Republic of China at the 13th Session of the Standing Committee of the Ninth People's Congress on December 25, 1999; amended for the second time in accordance with the Decision on Amending the Company Law of the People's Republic of China at the 11th Session of the Standing Committee of the Tenth National People's Congress on August 28, 2004; revised for the first time at the 18th Session of the Standing Committee of the Tenth National People's Congress on October 27, 2005; amended for the third time in accordance with the Decision on Amending Seven Laws Including the Law of the People's Republic of China on the Protection of the Marine Environment at the Sixth Session of the Standing Committee of the 12th National People's Congress on December 28, 2013; amended for the fourth time in accordance with the Decision on Amending the Company Law of the People's Republic of China at the Sixth Session of the Standing Committee of the 13th National People's Congress on October 26, 2018; and revised for the second time at the Seventh Session of the Standing Committee of the 14th National People's Congress on December 29, 2023)
Contents
Chapter I General Provisions
Chapter II Company Registration
Chapter III Establishment and Organizational Structure of Limited Liability Companies
Section 1 Establishment
Section 2 Organizational Structure
Chapter IV Transfer of Equity in Limited Liability Companies
Chapter V Establishment and Organizational Structure of Joint Stock Limited Companies
Section 1 Establishment
Section 2 Shareholders' Meeting
Section 3 Board of Directors and Company Manager
Section 4 Board of Supervisors
Section 5 Special Provisions on the Organizational Structure of Listed Companies
Chapter VI Issuance and Transfer of Shares in Joint Stock Limited Companies
Section 1 Issuance of Shares
Section 2 Transfer of Shares
Chapter VII Special Provisions on the Organizational Structure of State-Invested Companies
Chapter VIII Qualifications and Obligations of Company Directors, Supervisors and Senior Officers
Chapter IX Corporate Bonds
Chapter X Corporate Finance and Accounting
Chapter XI Corporate Merger, Division, and Increase and Decrease in Registered Capital
Chapter XII Company Dissolution and Liquidation
Chapter XIII Branches of Foreign Companies
Chapter XIV Legal Liability
Chapter XV Supplementary Provisions
Chapter I General Provisions
Article 1 The Company Law of the People's Republic of China (hereinafter referred to as the "Law") is formulated in accordance with the Constitution to regulate the organization and activities of companies, protect the lawful rights and interests of companies, shareholders, employees and creditors, improve the modern enterprise system with Chinese characteristics, advocate entrepreneurship, maintain the social economic order, and promote the development of the socialist market economy.
Article 2 For the purposes of this Law, the term "company" refers to a limited liability company or a joint stock limited company established within the territory of the People's Republic of China in accordance with this Law.
Article 3 A company is an enterprise legal person which has independent legal person property and enjoys legal person property rights. A company shall be liable for its debts to the extent of all its assets.
The lawful rights and interests of a company are protected by law from infringement.
Article 4 A shareholder of a limited liability company is liable to the company to the extent of its subscribed capital contribution. A shareholder of a joint stock limited company is liable to the company to the extent of the shares it has subscribed for.
Shareholders of a company are entitled under the law to rights including the return on equity, participation in the making of material decisions, and selection of managers.
Article 5 A company shall formulate its articles of association in accordance with the law. The articles of association shall be binding on the company and its shareholders, directors, supervisors, and senior officers.
Article 6 A company shall have its own name. A company's name shall comply with relevant national regulations of the State.
The right of a company to its name is protected by law.
Article 7 A limited liability company established in accordance with this Law shall include the words "limited liability company" or "limited company" in its name.
A joint stock limited company established in accordance with this Law shall include the words "joint stock limited company" or "joint stock company" in its name.
Article 8 A company's domicile shall be where its main administrative organization is located.
Article 9 A company's business scope shall be defined in its articles of association. A company may change its business scope by amending its articles of association.
Where the business scope of a company includes any item subject to approval pursuant to any law or administrative regulations, the approval shall be obtained in accordance with the law.
Article 10 The legal representative of a company shall, as stipulated in the articles of association, be the director or company manager representing the company in the execution of company affairs.
If a director or the company manager serving as the legal representative resigns, it is considered a simultaneous resignation from the position of the legal representative.
In the event of the resignation of the legal representative, the company must appoint a new legal representative within 30 days from the date of the legal representative's resignation.
Article 11 The legal consequences of civil activities conducted by a company's legal representative in the name of the company shall be borne by the company.
Restrictions on the powers of a company's legal representative by the company's articles of association or shareholders' meeting shall not be enforceable against bona fide third parties.
If a company's legal representative, in the course of performing duties, causes harm to others, the company shall bear civil liability. After assuming civil liability, the company may seek compensation from the legal representative at fault in accordance with the law or the company's articles of association.
Article 12 A limited liability company that seeks to convert into a joint stock limited company shall satisfy the conditions prescribed in this Law for joint stock limited companies. A joint stock limited company that seeks to convert into a limited liability company shall satisfy the conditions prescribed in this Law for limited liability companies.
In either of the aforementioned cases, the claims and debts of the company prior to the conversion shall be succeeded by the company after the conversion.
Article 13 A company may establish subsidiaries. A subsidiary enjoys legal-person status and shall independently bear its own civil liability in accordance with the law.
A company may establish branches. A branch does not enjoy legal-person status and its civil liability shall be borne by the company.
Article 14 A company may invest in other enterprises.
Where any law provides that a company shall not become a capital contributor that shall bear joint and several liability for the debts of the invested enterprise, such provisions shall apply.
Article 15 If a company intends to invest in any other enterprise or provide a guarantee for any other person, a resolution shall be adopted, as stipulated in the company's articles of association, by the company's board of directors or shareholders' meeting; where the articles of association prescribe any limit on the total amount of investments or guaranties allowed, or on the amount of a single investment or guarantee allowed, the said total amount or amount shall not exceed the limit prescribed.
If a company intends to provide a guarantee for any shareholder or actual controller of the company, a resolution shall be adopted by the shareholders' meeting.
No shareholder referred to in the preceding paragraph or under the control of the actual controller referred to in the preceding paragraph shall participate in voting on any matter described in the preceding paragraph. Any such resolution shall be adopted by a majority vote from the other shareholders attending the meeting.
Article 16 A company shall protect the lawful rights and interests of its employees, enter into employment contracts with its employees in accordance with the law, take out social insurance for employees, and strengthen labor protection to ensure work safety.
A company shall, through various means, enhance the professional education and in-service training of its employees to improve the quality of the workforce.
Article 17 Employees of a company shall, in accordance with the Trade Union Law of the People's Republic of China, organize a trade union, which shall carry out trade union activities and safeguard the lawful rights and interests of the employees. The company shall provide the necessary conditions for its trade union to carry out its activities. The trade union shall, on behalf of the employees, enter into collective contracts with the company with respect to matters such as remuneration, working hours, leave and rest, work safety and sanitation, insurance, and welfare and of the employees in accordance with the law.
In accordance with the Constitution and other relevant laws, a company shall establish a sound democratic management system, with the employee representative assembly as the fundamental form, and implement democratic management through the employee representative assembly or other means.
When making a decision on company restructuring, dissolution, filing for bankruptcy, or any material issue relating to its business operations, or formulating any important rule or regulation, a company shall take into account the opinions of its trade union, as well as the opinions and proposals of its employees through the employee representative assembly or other means.
Article 18 Organizations of the Communist Party of China shall be established within companies in accordance with the Constitution of the Communist Party of China and carry out Party activities. Companies shall provide the necessary conditions for Party activities.
Article 19 In conducting its business activities, a company shall abide by laws and regulations, observe social ethics and business ethics, act in good faith, and be subject to government and public oversight.
Article 20 In conducting its business activities, a company shall fully consider the interests of company employees, consumers, and other stakeholders, as well as social and public interests such as ecological environmental protection, and undertake social responsibility.
The State encourages companies to participate in social welfare activities and publish social responsibility reports.
Article 21 Shareholders of a company shall abide by laws, administrative regulations and articles of association and exercise their shareholder rights in accordance with the law, and shall not damage the interests of the company or other shareholders by abusing their shareholder rights.
A shareholder of a company shall be liable for compensation for any losses caused to the company or to other shareholders due to their abuse of shareholder rights.
Article 22 No controlling shareholder, actual controller, director, supervisor, or senior officer of a company shall harm the interests of the company through the exploitation of a related-party relationship.
Any individual who violates the preceding paragraph, resulting in losses to the company, shall be liable for compensation.
Article 23 If any shareholder of a company evades the payment of debts by abusing the company's independent status as a legal person or the limited liability of shareholders, thereby seriously damaging the interests of any creditor of the company, the shareholder shall bear joint and several liability for the debts of the company.
If a shareholder utilizes two or more companies under their control to carry out actions specified in the preceding paragraph, each of these companies shall bear joint and several liability for the debts of any of the companies.
In the case of a company with a sole shareholder, if the shareholder cannot prove the independence of the company's assets from their own, the shareholder shall bear joint and several liability for the company's debts.
Article 24 Meetings and voting of the shareholders' meeting, board of directors, and board of supervisors of a company may be conducted through electronic communication methods, unless otherwise stipulated in the company's articles of association.
Article 25 Any resolution of the shareholders' meeting or board of directors with content that violates any law or administrative regulations shall be null and void.
Article 26 If the procedure for convening a shareholders' meeting or a meeting of the board of directors, or the voting method used in such a meeting, violates any law, administrative regulations or the company's articles of association, or if any resolution adopted includes content that violates the company's articles of association, shareholders may, within 60 days from the date of adopting the resolution, request the people's court to annul it, except in cases where there are only minor defects in the procedure for convening the meeting or the voting method used in the meeting, which had no material impact on the resolution.
Shareholders that were not notified to attend a shareholders' meeting may request the people's court to annul a resolution adopted at the meeting within 60 days from the date when they became aware or should have been aware of the adoption of the resolution; if the right to annul is not exercised within one year from the date of adopting the resolution, the right to annul shall be extinguished.
Article 27 A resolution of the shareholders' meeting or board of directors shall not be established in any of the following circumstances:
(1) Where the shareholders' meeting or board of directors' meeting was not convened to make the resolution;
(2) Where the shareholders' meeting or board of directors' meeting did not vote on the matter subject to the resolution;
(3) Where the number of attendees or the voting rights held by them did not reach the number or proportion stipulated in this Law or the company's articles of association; or
(4) Where the number of those agreeing to the resolution or the voting rights held by them did not reach the number or proportion stipulated in this Law or the company's articles of association.
Article 28 If a resolution of the shareholders' meeting or board of directors of a company is declared invalid, annulled, or confirmed as not established by the people's court, the company shall apply to the company registration authority to cancel the registration already processed based on that resolution.
If a resolution of the shareholders' meeting or board of directors of a company is declared invalid, annulled, or confirmed as not established by the people's court, any civil juristic relationship created by the company with a bona fide third party based on such resolution shall be not affected.
Chapter II Company Registration
Article 29 To establish a company, an application for registration shall be filed with the company registration authority in accordance with the law.
Where any law or administrative regulations provide that the establishment of a company is subject to approval, the approval formalities shall be fulfilled in accordance with the law before the registration of the company.
Article 30 To apply for the establishment of a company, documents including a registration application and the company's articles of association shall be submitted, and the relevant materials submitted shall be truthful, legal, and valid.
If the application materials are incomplete or do not meet the statutory requirements, the company registration authority shall inform the applicant of any materials that need to be corrected or supplemented all at once.
Article 31 If an application for establishment of a company meets the establishment conditions prescribed in this Law, the company registration authority shall register the company as a limited liability company or joint stock limited company; if the application does not meet the establishment conditions prescribed in this Law, it shall not be registered as a limited liability company or joint stock limited company.
Article 32 The particulars to be registered for a company include:
(1) Name;
(2) Domicile;
(3) Registered capital;
(4) Business scope;
(5) Name of the legal representative; and
(6) Names of shareholders for a limited liability company or promoters for a joint stock limited company.
The company registration authority shall disclose a company's registered items outlined in the preceding paragraph to the public through the National Enterprise Credit Information Publicity System.
Article 33 A legally established company shall be issued a business license by the company registration authority. The date of issuance of the business license for a company shall be the date of establishment of the company.
A company's business license shall state the company's name, domicile, registered capital, business scope, and name of the legal representative, among other particulars.
The company registration authority may issue an electronic business license. An electronic business license has the same legal force as a paper-based business license.
Article 34 Any changes to the registered items of a company shall be subject to alteration registration in accordance with the law.
Any particulars to be registered by a company that have not been registered or changed without alteration registration shall not be enforceable against bona fide third parties.
Article 35 When a company applies for alteration registration, it shall submit to the company registration authority documents including an alteration registration application signed by the legal representative of the company, and the legally adopted resolution or decision regarding the alteration.
In cases where alteration registration involves amendments to the company's articles of association, the amended articles of association shall be submitted.
In the case of a change in the legal representative of the company, the alteration registration application shall be signed by the newly appointed legal representative.
Article 36 In the event of any changes to the details recorded in a company's business license, the company shall complete alteration registration before being issued a new business license by the company registration authority.
Article 37 If a company is to be terminated due to dissolution, declaration of bankruptcy, or other statutory reasons, it shall apply for deregistration to the company registration authority in accordance with the law, and the termination of the company shall be announced by the company registration authority.
Article 38 To establish a branch, the company shall file a registration application with the company registration authority to obtain a business license.
Article 39 The registration of the establishment of a company shall be revoked by the company registration authority in accordance with laws or administrative regulations if it was obtained by misstating its registered capital, submitting false documentation or using any other fraudulent means to conceal any important fact.
Article 40 A company shall, as required, publicly disclose the following details through the National Enterprise Credit Information Publicity System:
(1) The subscribed and paid-in capital, contribution methods, and contribution dates of shareholders for a limited liability company, and the quantity of shares subscribed by promoters for a joint stock limited company;
(2) Information on changes in the equity or shares of shareholders for a limited liability company and promoters for a joint stock limited company;
(3) Information on the receipt, changes, or cancellation in respect of any administrative permit; and
(4) Other information as stipulated by laws or administrative regulations.
A company shall ensure that the disclosed information outlined in the preceding paragraph is true, accurate, and complete.
Article 41 The company registration authority shall optimize the company registration process, improve registration efficiency, enhance information technology development, and promote convenient methods such as online processing, to enhance the accessibility of company registration.
The State Administration for Market Regulation shall formulate specific measures for company registration based on this Law and relevant laws and administrative regulations.
Chapter III Establishment and Organizational Structure of Limited Liability Companies
Section 1 Establishment
Article 42 A limited liability company shall be funded and established by one to 50 shareholders.
Article 43 Shareholders of a limited liability company at the time of its establishment may enter into an establishment agreement to specify their respective rights and obligations in the process of establishing the company.
Article 44 The legal consequences of any civil activities conducted by a shareholder of a limited liability company at the time of establishment for the establishment of the company shall be borne by the company.
In cases where the company is not established, the legal consequences shall be borne by the shareholders at the time of establishment; if there are two or more shareholders at the time of establishment, they shall have joint and several claims and bear joint and several liabilities.
For civil liability arising from any civil activities conducted by a shareholder at the time of establishment, in their own name, for the establishment of the company, a third party shall have the right to choose to claim against either the company or the shareholder at the time of establishment.
If a shareholder at the time of establishment causes harm to another person due to performance of their responsibilities for the establishment of the company, the company or other faultless shareholders may seek to recover any resulting compensation liability borne by them from the shareholder at fault.
Article 45 When establishing a limited liability company, the shareholders shall jointly formulate the company's articles of association.
Article 46 The articles of association of a limited liability company shall specify the following matters:
(1) Name and domicile of the company;
(2) Business scope of the company;
(3) Registered capital of the company;
(4) Names of shareholders;
(5) Amounts, methods, and dates of capital contributions by shareholders;
(6) Internal bodies and their establishment, powers, and rules of procedure;
(7) Methods for selecting and changing the company's legal representative; and
(8) Any other matters deemed necessary to specify by the shareholders' meeting.
Shareholders shall affix their signatures or seals on the company's articles of association.
Article 47 The registered capital of a limited liability company is the total amount of capital subscribed by all shareholders as registered with the company registration authority. The subscribed capital shall be fully paid by the shareholders within five years from the date of the company's establishment as stipulated in the company's articles of association.
Where the paid-in registered capital, the minimum registered capital, or the payment deadline for capital contributions by shareholders is otherwise provided by any laws, administrative regulations, or decisions of the State Council, those provisions shall prevail.
Article 48 Shareholders may contribute capital in cash, in kind, or with intellectual property rights, land use rights, equity, debt claims, or other non-monetary assets which can be valued in monetary terms and legally transferred, except for assets not eligible for capital contribution under any other law or administrative regulations.
The value of any non-monetary asset used for capital contribution shall be appraised and verified, and shall not be overestimated or underestimated. Where any law or administrative regulations provide for the appraisal of values, such provisions shall apply.
Article 49 Each shareholder shall pay the capital contribution they subscribed in full and on time as stipulated in the articles of association.
Shareholders making contributions in cash shall deposit the full amount into a bank account opened by the limited liability company. Those making contributions with non-monetary assets shall complete the procedures for the transfer of property rights in accordance with the law.
Shareholders that fail to contribute the capital in full and on time shall, in addition to making full payment to the company, also be liable for compensating the losses caused to the company.
Article 50 When a limited liability company is established, if a shareholder fails to make actual payment of capital contributions as stipulated in the company's articles of association, or if the actual value of non-monetary assets actually contributed falls significantly below the subscribed capital amount, the other shareholders at the time of establishment shall bear joint and several liability with that shareholder within the shortfall in contributions.
Article 51 After the establishment of a limited liability company, the board of directors shall verify the shareholders' capital contributions. If it is found that a shareholder has not paid the contribution on time and in full as stipulated in the company's articles of association, the company shall issue a written payment demand to that shareholder for the outstanding amount.
In the case of failure to fulfill the obligation stipulated in the preceding paragraph in a timely manner, resulting in losses to the company, any directors held responsible shall be liable for compensation.
Article 52 If a shareholder fails to pay contributions by the date specified in the company's articles of association, and the company issues a written payment demand in accordance with the first paragraph of the preceding Article, the company may specify a grace period for the payment in the written payment demand; the grace period shall not be less than 60 days from the date the company issues the payment demand. Upon expiration of the grace period, if the shareholder still fails to fulfill the contribution obligation, the company, through a resolution of the board of directors, may issue a notice of forfeiture to the shareholder, and such notice shall be in writing. From the date of the notice, the shareholder loses the rights to the unpaid capital shares.
The shares forfeited according to the preceding paragraph shall be transferred in accordance with the law or the registered capital shall be reduced accordingly with the cancellation of those shares; if the transfer or cancellation is not completed within six months, the other shareholders of the company shall fully pay the shortfall in proportion to their respective contributions.
If the shareholder has objections to the forfeiture, they shall initiate legal action in the people's court within 30 days from the date of receiving the notice of forfeiture.
Article 53 After the establishment of the company, shareholders shall not withdraw their paid-in capital contributions.
In the event of a violation of the preceding paragraph, the shareholder in violation shall return the withdrawn contribution amount; if such action causes losses to the company, any directors, supervisors, and senior officers of the company held responsible shall bear joint and several liability for compensation along with that shareholder.
Article 54 If a company is unable to meet its matured obligations, the company or the creditors of the matured debts shall have the right to demand early contributions from shareholders whose subscribed capital contributions are not yet due for payment.
Article 55 After the establishment of a limited liability company, each shareholder shall be issued a capital contribution certificate, which shall record the following details:
(1) Name of the company;
(2) Date of establishment of the company;
(3) Registered capital of the company;
(4) Name of the shareholder, their subscribed and paid-in capital amounts, contribution method, and contribution date; and
(5) Serial number of the capital contribution certificate and date of issuance.
The capital contribution certificate shall bear the signature of the legal representative and the company seal.
Article 56 A limited liability company shall maintain a register of members, which shall record the following details:
(1) Name and domicile of each shareholder;
(2) Each shareholder's subscribed and paid-in capital amounts, contribution method, contribution date;
(3) Serial number of each capital contribution certificate; and
(4) Date of receipt or loss of shareholder status for each shareholder.
Shareholders listed in the register of members may, based on this register, claim and exercise their shareholder rights.
Article 57 Shareholders are entitled to inspect and copy the company's articles of association, register of members, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors, and financial accounting reports.
Shareholders may request to inspect the company's accounting books and accounting documents.
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