The amended Company Law of China (the New Company Law) took effect on July 1, 2024, making substantial changes to existing rules in a wide range of areas including, among others, new timeline requirements for capital contribution, streamlined corporate registration and filing procedures, enhanced corporate governance, and strengthened shareholder rights protections. The law applies to all companies and other covered business in mainland China, including foreign-invested enterprises (FIEs).
Following the effectiveness of the New Company Law, the State Council, the Supreme Court of China, and the State Administration for Market Regulation (SAMR) promulgated a series of regulations and rules to support its effective implementation. Most recently, to further clarify rules on corporate registration, the SAMR promulgated the Implementing Measures for the Administration of Company Registration (the Measures) on December 30, 2024, which entered into force on February 10, 2025.
The New Company Law also introduced changes that may impact the articles of association (AoA) of FIEs. For companies that were established before January 1, 2020, when the Foreign Investment Law of China came into effect, they were required to adjust their AoA in conformity with the Foreign Investment Law before January 1, 2025. Companies that have not yet done so shall act immediately to conduct a thorough review of their AoA and make necessary adjustments for the AoA to conform to the New Company Law and, as applicable, the PRC Foreign Investment Law.
We have prepared this report focusing on the latest developments in legislation, insights, and impacts for all companies of all sizes and industries to help foreign investors and FIEs, in particular, familiarize themselves with the New Company Law. We stand ready to help companies analyze the impact of the New Company Law on their operations in China and assist with any related questions.
There are two types of companies with limited liability in China: limited liability companies (LLCs, in Chinese 有限责任公司 or 有限公司), which are private companies, and joint stock limited companies (JSLCs, in Chinese 股份有限公司) which can be either private or public companies. This report gives more focus on LLCs as it is the most popular corporate structure form of FIEs.