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Online CBA: What is the Registered Capital Registration System for Establishing Companies in China?

Photo: Establishing companies in China
Photo: Establishing companies in China

Q: What is the registered capital registration system for establishing companies in China?

A: Unless otherwise stated in provisions governing the registered paid-up capital of specific industries stipulated in relevant laws and administrative regulations, all other companies are subject to subscription registration pilot system for registered capital. Under the subscription registration pilot system, subscribed registered capital or subscribed total capital (i.e., the company’s registered capital) of all shareholders and promoters of the company will be registered by the industry and commerce administration department, while the company’s paid-up capital will not be registered. Shareholders (promoters) of the company shall agree on the amount of capital subscribed, the way of contribution, and the time limit for the capital contribution, and shall be recorded in the articles of association. Shareholders of a limited liability company shall bear the liabilities to the company for the amount of the capital contributions they subscribe to. Shareholders of a joint stock limited company shall bear the liabilities to the company for the shares they subscribe for. The company shall disclose the amount of capital subscribed by the shareholders or the subscription shares of the promoters, the means of investment, the period of time for contribution, and the payment situation, which shall be made public in the market player's credit information dissemination system. Shareholders (promoters) are responsible for the authenticity and legitimacy of the contributions.

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