(1). Registered Capital Registration Regulation：
To be feasible to optimize the business environment, China has loosened market subject access control and implemented registration of certified capital for China limited liability company
. The registered capital subscribed registration system means the registration authority take record of the total capital contribution of the shareholders, endorsed registered equity, paid-in capital by the shareholders of a company can be agreed and recorded in the company's articles of association. In the past, China has implemented a registered capital real-pay registration system, which required the shareholders of a company must do capital injection (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.
New registered capital subscribed registration system further lowers the threshold to register a company, lightens the burden of investors, brings convenience access to the companies and provides the legal safeguard to promote the reform of company's designated capital registration system.
The new registered capital subscription registration system shall stipulate that the total amount of capital contributed by the shareholders of the 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. The shareholders (promoters) of the company shall make self-determination of the amount of capital contribution, the method of input and term of the injections, and shall be recorded in the articles of association of the company. The shareholders of a limited liability company shall be liable to the company for the amount of the contribution it has subscribed to, and the shareholders of the joint stock limited company shall be liable to the company for the shares subscribed to. The company shall 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 RMB100,000 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. When the company is registered, no capital verification report is required.
Industries that do not implement the registered capital recognition system temporarily:
2.Insurance Asset Management Company
4.Labor Dispatch Enterprise
5.Financing Guarantee Company
6.Foreign Labor Cooperation Enterprise
7.Direct Marketing Business
8.Foreign Insurance Company
9.Insurance Professional Agency, Insurance Broker
11.Fund Management Company
14.Rural Mutual Cooperatives
15.Rural Credit Cooperative Union
18.Money Brokerage Company
19.Consumer Finance Company
20.Automobile Finance Company
21.Financial Leasing Company
24.Asset Management Company
27.Joint-stock Company Raised in the Form of Fundraising
(2). Business scope
Business scope is the scope of business operations, which should be categorized according to the Industrial Classification for National Economic Activities and Catalogue for Guidance of Foreign Investment.
Download: Industrial Classification for National Economic Activities
Catalog for Guidance of Foreign Investment
(3). Legal representative/ Managing Director/ Executive Director/ Supervisor/ Manager
The legal representative is a specific legal concept, which refers to the legal representative of a legal person in accordance with the provisions of the articles of association of the law or legal person. The legal representative can be the Managing Director/ Executive Director/ Manager.
Managing Director of Board/ Executive Director
If to set up the board of directors, the board members should be at least 3 people. If not, it can set up with one executive director.
President of a board of supervisors/Supervisor
If new entity establishes the board of supervisors, members of the board of supervisors should be more than three; if no board of supervisors, can only have 1 or 2 supervisors; Supervisors shouldn’t be the legal representative, manager or another senior management person.
Doesn’t need to set up a deputy manager, the Managing Director may concurrently be the manager.
For the most detailed and updated China WFOE register information, please check The Ultimate Guide for China WFOE Formation in 2018