At the end of 2023, the Standing Committee of the National People's Congress of China passed the revised Company Law ("the new Company Law"), deleting 16 articles in the Company Law of 2018, adding and amending 228 articles, of which 112 articles were substantially amended. The new Company Law has come into effect on July 1, 2024. This revision is the sixth one of the Company Law since China enacted it in 1993, and it is also the largest revision, which will have a significant impact on more than 43 million companies in China, including foreign-invested enterprises.

Article 23 of the new Company Law stipulates that "If a company shareholder abuses the independent legal status of the company and the limited liability of shareholders to evade debts and seriously damage the interests of the company's creditors, he shall bear joint and several liability for the company's debts.

If a shareholder uses two or more companies under his control to carry out the acts specified in the preceding paragraph, each company shall bear joint and several liability for the debts of any one company.

If a company with only one shareholder cannot prove that the company's property is independent of the shareholder's own property, he shall bear joint and several liability for the company's debts."

Among them, paragraph 2 is a new provision in the new Company Law on shareholders abusing the independent legal status of the company and the limited liability of shareholders, which clearly stipulates that if a shareholder uses two or more companies under his control to evade debts and seriously damage the interests of the company's creditors, each company shall bear joint and several liability for the debts of any one company. In addition, paragraph 3 is a revision of Article 63 of the Company Law of 2018, and "one-person limited liability company" has been changed to "a company with only one shareholder."