China Company Law Amendment 2013

On October 25, 2013, the Standing Committee of the National People's Congress of the People's Republic of China passed an amendment to the P.R.C. Company Law (the "Amendment"). The amendment is set to take effect on 1 March 2014.

The following is a list of all the changes to the existing law:

1. The term "actually paid-in capital" in Subsection (2) of Article 7 should be deleted.

2. Subsection (2) of Article 23 should be amended as "having the amount of capital subscribed by all shareholders in compliance with the Articles of Association of the Company".

3. Article 26 should be amended as: "the amount of registered of a limited liability company should be the amount of capital subscribed by all shareholders of the company.

Should any other laws, administrative regulations and decisions of the State Council imposes different requirements regarding the actually paid capital and minimum registered capital of limited liability company, those requirements should prevail".

4. Subsection (3) of Article 27 should be deleted.

5. Article 29 should be deleted.

7. The term "and its contributed capital" in Subsection (3) of Article 33 should be deleted.

6. Article 30 should be changed to Article 29 and be amended as "After the shareholder subscribed to the total capital stated in the Articles of Association, a representative designated by all the shareholders or a proxy jointly entrusted by them shall submit the registration application documents and Articles of Association to the business registration authority in order to apply for registration of the company".

8. Subsection (1) of Article 59 should be deleted.

9. Article 77 should be changed to Article 76. Subsection (2) of Article 76 should be amended as "having the total capital subscribed by all promoters or total paid-in capital raised in compliance with the Articles of Association".

10. Article 81 should be changed to Article 80 and Subsection (1) of Article 81 should be amended as "When a joint stock limited company is incorporated by means of promotion, its registered capital shall be the total amount of the share capital subscribed for by all the promoters, as is registered with the company registration authority. Before existing shareholders fully contributed the capital subscribed by them, the company shall not offer its shares to others".

Subsection (3) of Article 81 should be amended as "Should any other laws, administrative regulations and decisions of the State Council imposes different requirements regarding the actually paid capital and minimum registered capital of limited liability company, those requirements should prevail".

11. Article 84 should be changed to Article 83 and Subsection (1) of Article 84 should be amended as "Where a joint stock company is incorporated by means of promotion, each of the promoters shall, in writing, subscribe for the full portion of the shares to be subscribed for by him as stipulated by the company’s articles of association; Where a promoter contributes the capital by non-monetary properties, he shall go through the formalities for the transfer of his rights in those properties to the company according to law".

12. Subsection (3) of Article 178 should be deleted.

The Amendment to the Company Law will take effect from 1 March 2014.