Liabilities of Contributed Capital Surreptitiously Withdrawn in New China Corporate Law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legal liabilities of promoters and shareholders with regards to the required contributed capital being surreptitiously withdrawn.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.


Signals from Latest Company Law Amendment

(By Bai Lituan) On December 28, 2013, the 6th Meeting of the Standing Committee of the Twelfth National People’s Congress approved the Amendment to the Company Law of the People’s Republic of China. The Amendment has three highlights: replaced the paid-in system with the registered capital to-be-paid-in system, decreased requirements for capital registration and simplified registration items and files. No doubt amendment to laws aims at meeting the demand of economic development, then what did this Amendment to the Company Law positively signal?


What’s the Difference in the 2014 version of Company’s Business License in China?

(By You Yunting) Our previous post introduced that recently China revised the Company Law. All Company’s business license will be changed in China to cooperate with this revision. In today’s post, we would like to introduce some leading reform measures in Shanghai and Guangdong Province which will be implemented all over the China. The following are the differences between the 2014 version of Company’s business license and the preceding one.

  1. All companies shall renew its new business license

The prosperous coastal regions in China will fully renew its business license of commercial registration Since January 1, 2014. Enterprises registered in Shanghai and Guangdong province shall renew its business license before December 31, 2013. Failure to renew its business license will be fined.


The Amendment to the Corporate Law of the People’s Republic of Law

Notice: On December 28, 2013, China adopted a new amendment to the Corporate Law which will come into force on March 1, 2014. Combining with our original 2005 version of the Corporate Law, Ms Wang translates the new amendment to the Corporate Law into English and posts it today. If anyone needs to reprint our translated revision on web, please note the following content on the reprint page: This amendment is translated by Bridge IP Law Commentary

 To help foreign friends better understanding of Chinese laws, today we would first publish a comparison between the 2005 version of the Corporate Law and the 2013 amendment.


A Dispute and Settlement involving Technology Investments

Comments on a Shareholder’s Qualification Case Arising out of Technology Investments

(Steven Wang) Recently, the author has represented parties in a shareholder’s lawsuit, with the dispute centering on IPR investment. The court has already heard the case. The property value involved in the lawsuit totaled as high as RMB 300 million Yuan, and the laws applied in its hearing involved IPR law, contract law, and corporate law. The focus of the dispute referred to the patent, exclusive technology, contribution, revocation of shareholder qualification and the application of law when a number of conflicts arise among these different areas of the law.  These conflicts have caused a lot of discussion regarding these legal conflicts, and several conclusions have been reached regarding issues presented in the case.


What do the First Valuation Adjustment Mechanism (VAM) Lawsuits in China Tell Us?

Analysis on the HF Fund’s lawsuits against Gansu Shiheng and Hong Kong Dia

(By Bai Lituan & Zhang Qianlin) In December 2012, HF Fund Management Co., Ltd. (the “HFF”) filed a lawsuit against Gansu Shiheng Nonferrous Metals Co., Ltd (the “GSNM”), and after being heard by the Supreme People’s Court, the Court stated that the valuation adjustment Mechanism (VAM) would be considered partially valid. This particular case has been seen ups and downs, and now that it has finally been heard, we would like to share our opinions on it within a framework of legal analysis, and hope that it will help clarify any issues presented in the case and thus help to reduce the risks investors typically face.


China’s Latest Laws and Regulations in January 2013 (I)

I.  The Standing Committee of the National People’s Congress Adopted the Decision on Amending the Labor Contact Law.

On December 28, 2013, the Standing Committee of the National People’s Congress adopted and issued the Decision on Amending the Labor Contact Law of the People’s Republic of China, which will take effect on July 1, 2013. Four articles were revised, all relating to labor dispatch. The changes include an increase in the minimum registered capital of labor dispatching companies and administrative licensing to initially engage in the labor dispatch business; emphasizing the dispatched worker’s right of “equal pay for equal work;” declaring labor dispatch is a supplementary arrangement of employment and limiting the usage of labor dispatch; and imposing more serious liabilities on labor dispatching companies and the companies receiving the dispatched workers.


Tips for Share Contribution with Copyright in China

By Luo Yanjie

Recently, Shanghai Laofengxiang Gift Company finished registration at Huangpu branch of industrial and commercial administration. The company is established by Shanghai Laofengxiang Company and ARTURO UGO DI MODICA , the designer of ” Wall Street financial bull”,” the Bund financial bull”. ARTURO UGO DI MODICA invests the company by the copyright of “the Bund financial bull” which is evaluated 4100000 yuan. This is the first foreign company invested by copyright inShanghai.