(1). Registered Capital Registration Regulation
In order to be feasible and improve the Chinese business landscape, China has loosened up its markets, subject to access control, and have implemented registration of certified capital for China limited liability businesses. A registered capital subscribed registration system’ means the registration authority keeps a record of the total capital contribution of the shareholders, and endorsed registered equity. Also, paid-in capital by the shareholders of a company can be agreed and recorded in the company's articles of association. This is a significant change from the past. China had implemented a ‘registered capital real-pay registration system,’ which required the shareholders of a company to inject capital (paid-in capital) in the specified time limit and apply for a certified report of capital verification by the capital verification institution established according to law after the China company registration. Under the new registered capital subscribed registration system, the threshold to register a company is lowered. This lowered the burden which was traditionally borne by investors, and makes it more convenient for companies to start their business in China, while getting the legal safeguard they need to operate within China.
Whether you are looking for a company registration in Guangzhou China, or some other large city within China, the new registered capital subscription registration system stipulates that the total amount of capital contributed by all shareholders in a company, or the total amount of money subscribed by the sponsors (i.e., the registered capital of the company) shall register with the administrative authority for industry and commerce.
All shareholders aka promoters of a company need to make self-determination of the amount of capital contribution that has been made to the company, the method of input, and terms of the injections, which is to be recorded in the articles of association of the company. The shareholders of the limited liability company need to be liable to the company for the amount of the contribution that it has subscribed to. Also, the shareholders of the limited liability company shall be liable to the company for the contribution it has subscribed to, and the shareholders of the joint stock limited company are to be liable to the company for the shares subscribed to.
Companies are to make the contribution of the shareholders or the sponsors to subscribe for the shares, the means of participation, the term of input, and the payment of the information through the market subject's credit information system to the public. The shareholder (sponsor) is responsible for the authenticity and legality of the contribution.In addition to the laws, administrative regulations and the state council’s specified stipulation about particular industries, China canceled the requirement of the minimum registered capital of RMB 30,000 for a limited liability company, the minimum registered capital of RMB 100,000 for a one-person limited liability company, the minimum registered capital of RMB 5 million for a joint-stock company.
The law shall not confine the first capital contribution ratio of all shareholders for a company formation, the proportion of monetary contribution amount to registered capital. No provision is made for the duration of the contribution of the shareholder (sponsor) of the company.
The company's paid-in capital is no longer part of business registration. This means that when you go for a company name registration in China, no capital verification report will be required. However, some industries that do not implement the registered capital recognition system temporarily include:
Rural Mutual Cooperatives
Rural Credit Cooperative Union
Money Brokerage Company
Labor Dispatch Enterprise
Joint-stock Company Raised in the Form of Fundraising
Insurance Professional Agency, Insurance Broker
Insurance Asset Management Company
Fund Management Company
Foreign Labor Cooperation Enterprise
Foreign Insurance Company
Financing Guarantee Company
Financial Leasing Company
Direct Marketing Business
Consumer Finance Company
Automobile Finance Company
Asset Management Company
(2) Business Scope
Business scope basically means the scope of business operations. This is categorized according to the Industrial Classification for National Economic Activities and Catalogue for Guidance of foreign investors. If you operate within a particular industry and are wondering about the business scope of your enterprise in China then we can help to provide you with the information you need before you set up a company in China.
Industrial Classification for National Economic Activities
Catalog for Guidance of Foreign Investment
(3). Legal Representative/ Managing Director/ Executive Director/ Supervisor/ Manager
★ Legal Representative – A legal representative refers to the legal representation of a person in accordance with the provisions of the articles of associate of the law. A legal representative can also be a manager, executive director or a managing director.
Managing Director of Board / Executive Director–If you set up a Board of Directors after going through the China company registration process, the board should comprise of at least three individuals. If not, it can be set with one executive director.
President of the Board of Supervisors –If the new entity established the Board of Supervisors, all members of the Board of Supervisors need to make a total of at least three individuals. If there is no Board of Supervisors, then it can have 1 or 2 supervisors. That said, the supervisor(s) cannot be the legal representative, manager or another person from senior management.
Manager / Deputy Manager –There’s no need to appoint a deputy manager, as the managing director can concurrently be the manager.