Excerpts from People's Republic of China (PRC) Company Law
Chapter II Establishment of a Limited Liability Company
Section 1 Establishment
Article 19 To establish a limited liability company, the following conditions shall be met:
(1) Shareholders meet the quorum;
(2) The capital contribution of shareholders reaches the minimum statutory capital;
(3) Shareholders * * * agree to formulate the Articles of Association;
(4) Having a company name and establishing an organization meeting the requirements of a limited liability company;
(5) Having a fixed place for production and business operation and necessary conditions for production and business operation.
Article 20 A limited liability company shall be established by more than two shareholders and less than fifty shareholders.
State-authorized investment institutions or state-authorized departments may independently invest in the establishment of wholly state-owned limited liability companies.
Article 21 A state-owned enterprise established before the implementation of this Law meets the requirements for the establishment of a limited liability company as stipulated in this Law. If there is a single investor, it may be transformed into a wholly state-owned limited liability company in accordance with this Law. If there are multiple investors, it can be transformed into a limited liability company as stipulated in the first paragraph of the preceding article.
The implementation steps and specific measures for the transformation of state-owned enterprises into companies shall be formulated separately by the State Council.
Article 22 The articles of association of a limited liability company shall specify the following items:
(1) Name and domicile of the company;
(2) The business scope of the company;
(3) The registered capital of the company.
(4) Names of shareholders.
(5) Rights and obligations of shareholders.
(6) The mode and amount of capital contribution of shareholders;
(7) Conditions for shareholders to transfer their capital contribution;
(8) The organizational structure of the company, its formation methods, powers and rules of procedure;
(9) The legal representative of the company;
(10) Reasons for the dissolution of the company and liquidation methods.
(eleven) other matters that shareholders think need to be stipulated.
Shareholders shall sign and seal the articles of association.
Article 23 The registered capital of a limited liability company is the paid-in capital contribution of all shareholders registered with the company registration authority.
The registered capital of a limited liability company shall not be less than the following minimum:
(1) RMB 500,000 yuan for a company mainly engaged in production and operation;
(2) 500,000 yuan for companies mainly engaged in commodity wholesale;
(3) RMB300,000 for a company mainly engaged in commercial retail;
(4) Technology development, consulting and service company100,000 yuan.
Where the minimum registered capital of a limited liability company in a specific industry needs to be higher than that stipulated in the preceding paragraph, it shall be stipulated separately by laws and administrative regulations.
Article 24 Shareholders may make capital contributions in cash or in kind, industrial property rights, non-patented technology and land use rights. Physical objects, industrial property rights, non-patented technologies or land use rights as capital contributions must be appraised and valued, and the property must be verified, and the valuation shall not be overestimated or underestimated. The evaluation and pricing of land use rights shall be handled in accordance with the provisions of laws and administrative regulations.
The amount of investment with industrial property rights and non-patented technology at a fixed price shall not exceed 20% of the registered capital of a limited liability company, unless the state has special provisions on the adoption of high-tech achievements.
Article 25 Shareholders shall pay their respective subscribed capital contributions in full in accordance with the Articles of Association. Where shareholders make capital contributions in cash, they shall deposit their capital contributions in full into the temporary account opened by the limited liability company in the bank; If the investment is made in kind, industrial property rights, non-patented technology or land use rights, the transfer procedures of its property rights shall be handled according to law.
Where a shareholder fails to pay the subscribed capital contribution in accordance with the provisions of the preceding paragraph, he shall be liable for breach of contract to the shareholder who has paid the capital contribution in full.
Article 26 After all the capital contributions are made by shareholders, the capital must be verified by a statutory capital verification institution and a certificate must be issued.
Article 27 After all the capital contributions of shareholders have been verified by a statutory capital verification agency, the representatives designated by all shareholders or the agents entrusted by all shareholders shall apply to the company registration authority for registration of establishment, and submit the company registration application, articles of association, capital verification certificate and other documents.
Where laws and administrative regulations require the approval of relevant departments, the approval documents shall be submitted when applying for establishment registration.
The company registration authority shall register those who meet the requirements stipulated in this law and issue a business license to the company; Those who do not meet the requirements stipulated in this law shall not be registered.
The date of issuance of the company's business license is the date of establishment of a limited liability company.
Article 28 After the establishment of a limited liability company, if it is found that the actual price of the physical objects, industrial property rights, non-patented technologies and land use rights contributed is obviously lower than the amount stipulated in the company's articles of association, the contributing shareholders shall make up the difference, and other shareholders at the time of the establishment of the company shall be jointly and severally liable for it.
Article 29 Where a limited liability company is established and a branch company is established at the same time, it shall apply to the company registration authority for branch company registration and obtain a business license.
If a limited liability company establishes a branch after its establishment, its legal representative shall apply to the company registration authority for registration and obtain a business license.
Article 30 After the establishment of a limited liability company, it shall issue a capital contribution certificate to the shareholders.
The capital contribution certificate shall specify the following items:
(1) Name of the company;
(2) Date of registration of the company;
(3) The registered capital of the company.
(4) The name, amount and time of contribution of the shareholders.
(5) The serial number and date of issuance of the capital contribution certificate.
The capital contribution certificate shall be sealed by the company.