Liabilities of Contributed Capital Surreptitiously Withdrawn in New China Corporate Law

 (By You Yunting) In the end of 2013, China issued a revised Corporate Law updating the provisions about the contributed capital, as discussed in our previous post the Amendment to the Corporate Law. Today we will discuss the legal liabilities of promoters and shareholders with regards to the required contributed capital being surreptitiously withdrawn.

Assumption of liability

Pursuant to the updated Corporate Law, any shareholder who fails to make full payment of the capital contributions at the establishment of the company shall be jointly and severally liable for refunding the paid-in capital – in accordance with the amount of registered capital. As such, it is when the company is unable to pay its debts that the shareholders shall assume the liability of surreptitiously withdrawing the contributed capital.


What Legal Risk May Come to Companies Enrolled in the Non Bank Loan in China?

(By Albert Chen) The capital shortage is inevitable during the company operation, and many operators could be head aching with the financing. Due to the strict demands and procedures for the credit approval in the banks, the company may suffer from the refusal of loan application or delay in lending. At that time, the non-bank loan could play another main role in the company financing. Then what risks may come to foreign invested companies as they enrolled in the non-bank loan when running business in China? Please check today’s post for the answer.