What are the new requirements for shareholders to pay capital under Chinese new company law? And for those who have already had a company or are considering setting up a company in the future, what should they do? 

At the end of last year, the Standing Committee of the National People's Congress passed the new Company Law, and today let’s talk about the revisions related to capital contribution. 

The old Chinese Company Law did not limit the amount of registered capital or period of capital contribution. Under the old Chinese Company Law, there were some companies with astronomical registered capital or excessively long capital contribution periods throughout the country. 

However, The new company law requires registered capital to be paid off within five years. Article 47 of the new company law provides that the registered capital shall be fully paid within five years from the date of establishment of the company. 

Article 266 of the new Company Law states that for companies registered before the implementation of this Law, if the period of capital contribution exceeds 5 years, unless otherwise stipulated, it shall gradually adjust the capital contribution period to within 5 years. 

The new company law has also modified the provisions on advance payment of capital contributions. Article 54 of the New Company Law provides that if a company is unable to pay its due debts, the company or the creditors have the right to request the shareholders to pay the subscribed capital in advance. 

It is foreseeable that after the new company law comes into force on July 1, 2024, there will be a large number of "super companies" will be liquidated, struck off or reduced in capital.