The newly revised Company Law of the People's Republic of China will come into force today. A few days ago, responsible persons of the Ministry of Justice and the State Administration for Market Regulation answered reporters' questions on relevant issues.
Q: Please briefly introduce the background of the promulgation of the Provisions.
A: The CPC Central Committee and the State Council attach great importance to improving the modern enterprise system with Chinese characteristics and continuously optimizing the business environment. On December 29, 2023, the Seventh Session of the Standing Committee of the 14th National People's Congress passed the revised Company Law of the People's Republic of China (hereinafter referred to as the new Company Law), which will come into force on July 1, 2024. In view of the problems arising in the practice of the company's registered capital subscription system, such as "excessive period of capital contribution", "sky-high capital contribution" and "shell company", which affect the security of transactions, damage the interests of creditors and disrupt the market order, the new Company Law has made adjustments to the subscription of the company's registered capital, stipulating that the amount of capital contribution subscribed by all shareholders of a limited liability company shall be paid in full by the shareholders within five years from the date of establishment of the company in accordance with the provisions of the articles of association, and the promoters of a company limited by shares shall pay the full amount of shares subscribed by the company before the establishment of the company. At the same time, it is stipulated that if the capital contribution period of a company registered and established before the implementation of the new Company Law (hereinafter referred to as the "stock company") exceeds the prescribed period, it shall be gradually adjusted to within the prescribed period; If the term and amount of capital contribution are obviously abnormal, the company registration authority may require it to adjust in a timely manner in accordance with the law; and authorizes the State Council to formulate specific implementation measures. When the Standing Committee of the National People's Congress deliberated and passed the new Company Law, it clearly required that it should speed up the formulation of specific implementation measures and implement them simultaneously with the new Company Law on July 1, 2024. In order to implement the new Company Law and the requirements of the Standing Committee of the National People's Congress, the State Administration for Market Regulation has researched, drafted and submitted to the State Council the Provisions of the State Council on the Implementation of the Company Law of the People's Republic of China on the Registration and Management System of Registered Capital (Draft for Review) on the basis of in-depth research, soliciting opinions from relevant parties and soliciting opinions from the public. In the legislative review, the Ministry of Justice extensively solicited the opinions of relevant central units and provincial-level people's governments, carried out on-the-spot research in conjunction with the State Administration for Market Regulation, convened forums and expert argumentation meetings to listen to opinions and suggestions, repeatedly studied key issues, and revised the draft of the Provisions.
Q: What is the general idea of formulating the "Regulations"?
Answer: First, adhere to the problem-oriented, focus on the application of the new "Company Law" to existing companies, and improve the relevant institutional arrangements during the transition period; The second is to adhere to the steady progress, taking into account the unified implementation of the law and the actual situation of the stock company, reasonably clarify the time limit requirements for the adjustment of the capital contribution period of the stock company, and promote the smooth transition of the reform of the company's registered capital registration management system; The third is to adhere to overall planning and coordination, supplement and improve relevant provisions within the framework of the new "Company Law", and at the same time do a good job of connecting with the "Interim Regulations on Enterprise Information Disclosure" and other administrative regulations.
Q: What are the key provisions for the implementation of the new Company Law on the adjustment of the capital contribution period of existing companies?
Answer: In order to promote the smooth implementation of the new "Company Law", eliminate the concerns of the stock company about the uncertainty of the adjustment of the capital contribution period, and reserve more ample time for the stock company to adjust the capital contribution period, the "Provisions" set a three-year transition period for the stock company to adjust the capital contribution period according to the current number of stock companies and capital contributions in the mainland, and in combination with the opinions and suggestions of relevant parties, specifically: First, the remaining subscribed capital contribution period of the limited liability company exceeds 5 years from July 1, 2027, The remaining subscribed capital contribution period shall be adjusted to 5 years before June 30, 2027, and the shareholders shall pay the subscribed capital contribution in full within the adjusted subscribed capital contribution period; Second, the promoter of a company limited by shares shall pay the full amount of shares according to its subscribed shares before June 30, 2027. In addition, on the premise of complying with the basic principles and requirements of the new Company Law, the Provisions make exceptional arrangements for the adjustment of the capital contribution period of existing companies involving national interests or major public interests, and stipulate that if the company's production and operation involve national interests or major public interests, and the relevant competent department of the State Council or the provincial people's government puts forward an opinion, the market supervision and administration department of the State Council may agree to the capital contribution according to the original capital contribution period.
Q: What are the main provisions on the issue of abnormal capital contribution of the company?
Answer: In view of the current problems that the subscription period of some existing companies is too long, the registered capital is too high, which does not conform to the actual situation and even goes against common sense, the "Provisions" stipulate that if the company's capital contribution period and registered capital are obviously abnormal according to the requirements of the new "Company Law", the company registration authority can combine the company's business scope, business conditions, shareholders' capital contribution capacity, main projects, asset scale, etc.
Q: What obligations does the company need to fulfill when adjusting the term of capital contribution? What are the consequences of failing to comply with the obligations?
Answer: According to the new "Company Law" and the "Interim Regulations on the Publicity of Enterprise Information", the "Provisions" refine the relevant obligations of the company to adjust the term of capital contribution: first, if the company adjusts the amount of capital contribution subscribed and paid-in by shareholders, the method of capital contribution, the term of capital contribution or the number of shares subscribed by the promoter, it shall be publicized to the public in accordance with the law; Second, the company registration authority shall supervise and inspect the company's public subscription and actual payment, and implement classified supervision according to the company's credit risk status; Third, if the company fails to adjust the capital contribution period and registered capital in accordance with these provisions, the company registration authority shall order it to make corrections; If corrections are not made within the time limit, the company registration authority shall make a special mark on the national enterprise credit information publicity system and announce it to the public. In addition, if the shareholders or promoters of the company fail to perform their paid-in obligations in accordance with the law, or the company fails to disclose relevant information in accordance with the law, they shall be punished in accordance with the relevant provisions of the new Company Law and the Interim Regulations on the Disclosure of Enterprise Information.
Q: What are the detailed provisions on the compulsory deregistration system for companies in the new Company Law?
Answer: In order to clean up the "zombie company" that exists in name only, and better promote the implementation of the company's registered capital registration management system, the "Provisions" have refined the provisions on the compulsory cancellation of the company in the new "Company Law": first, if the company has not applied to the company registration authority for cancellation of the company registration for 3 years from the date of the revocation of the business license, the order to close or be revoked, the company registration authority can make an announcement through the national enterprise credit information publicity system, and the announcement period shall not be less than 60 days; Second, during the announcement period, if the relevant departments, creditors and other interested parties raise objections to the company registration authority, the cancellation procedure shall be terminated; Third, if there is no objection after the expiration of the announcement period, the company registration authority may cancel the company registration and make a special mark in the national enterprise credit information publicity system.
Q: What are the main considerations for the "Provisions" to require listed companies to set up an audit committee in the board of directors in accordance with the Company Law and the provisions of the State Council?
Answer: The new Company Law stipulates that a company limited by shares may, in accordance with the provisions of the articles of association, set up an audit committee in the board of directors to exercise the functions and powers of the board of supervisors, and there is no board of supervisors or supervisors. In 2001, the mainland capital market introduced the audit committee system into the governance structure of listed companies for the first time. In 2018, the CSRC's Code of Governance for Listed Companies identified the audit committee as a mandatory institution for listed companies. At present, all listed companies have set up audit committees. The Audit Committee has played an active role in strengthening the Company's internal control and financial information supervision. In April 2023, in order to further optimize the independent director system of listed companies, the General Office of the State Council issued the Opinions on the Reform of the Independent Director System of Listed Companies, which clearly requires that the board of directors of listed companies should set up an audit committee. In order to implement the requirements of the new Company Law and the Opinions on the Reform of the Independent Director System of Listed Companies, the Provisions specify that listed companies shall, in accordance with the Company Law and the provisions of the State Council, stipulate in the articles of association that an audit committee shall be established in the board of directors, and specify the composition, functions and powers of the audit committee. In the next step, the China Securities Regulatory Commission will issue supporting system rules to refine the composition, powers and other provisions of the audit committee of listed companies, so as to provide specific guidance and guarantee for the operation and better role of the audit committee of listed companies.
Q: After the implementation of the "Regulations", what will be the focus of work?
Answer: The State Administration for Market Regulation will work with relevant departments to implement the "Provisions": First, carry out publicity and interpretation. Fully combined with local conditions, through the formulation of service guides, brochures, video animations and other ways to strengthen policy interpretation on the official website of the market supervision department, office hall, registration interface, etc., to help enterprises accurately grasp the requirements of the "Provisions" and solve the difficulties and problems encountered in the registration process. The second is to introduce supporting regulations. Accelerate the formulation of implementation measures and other rules for company registration, and make detailed provisions on the specific circumstances of capital contribution that can be made according to the original capital contribution period if the production and operation involve national interests or major public interests, the specific identification and treatment of obvious abnormalities in registered capital, and the management system of separate registration of companies; Revise supporting regulations for enterprise information disclosure, and improve requirements related to enterprise information disclosure and credit regulation. The third is to do a good job in relevant guarantees. Transform and upgrade the registration system of business entities and the national enterprise credit information publicity system, improve the registration application documents and material specifications, continue to optimize the registration process, improve the registration efficiency, and continuously improve the company's service experience and satisfaction. (CCTV reporter Li Kejing)
Editor in charge: Lv Jingwen