According to the new Corporate Law, the registered capital of a limited company shall be paid-in by all shareholders within five years since the date of its establishment in accordance with the provision of the articles of association of the company. For companies already registered for establishment before the date on which the new Corporate Law enters into force, if the capital contribution period exceeds the period required by the law, it shall be gradually adjusted to the period specified by the law, unless otherwise provided by any other laws, administrative regulations, or the State Council; in cases where the contribution period of amounts is significantly abnormal, the company registration authority may, in accordance with the law, require a timely adjustment. The specific implementation measures shall be provided by the State Council. On July 1, 2024, the new Corporate Law officially came into effect, and on the same day, the Premier of the State Council signed the Order of the State Council, publishing the <Regulations of the State Council on the Implementation of the Capital Registration Management System under Corporate Law of PRC >(hereinafter referred as the “Regulation”), which will provide an important legal basis for the arrangement of the companies established before the implementation of the Corporate Law during the transition period.

According to the Regulation, for the limited liability companies established before June 30, 2024, if the remaining subscription period exceeds five years since July 1, 2027, the remaining subscription period shall be reduced to within five years before June 30, 2027, and the adjustment shall be recorded in the articles of association. The shareholders shall pay the amount of the capital contribution in full within the adjusted period. For the stock limited companies, the promoters shall pay the full amount of shares they subscribed for before June 30, 2027. In the case that the production and operation of a company involves the interests of the State or major public interests, the Market Supervision and Administration Department of the State Council may, based on the opinions issued by relevant competent departments under the State Council or provincial governments, agree to make the capital contribution within the original period.

In the Regulation, it also stipulates the obligation of companies to disclose the status of subscripted and paid-up of the registration capital through the National Enterprise Credit Information Publicity System, the system of inspection by registration authorities and relevant legal responsibilities of companies, which provides legal basis for the enforcement of administrative authorities and also guidance for compliance of the companies.