I. Establishment of the Company
The establishment of a company refers to the legal acts that the promoters of the company must take and complete in order to form a company and obtain legal personality in accordance with legal conditions and procedures. The essence of establishing a company is a legal act, which belongs to multiple legal acts, but the establishment of a one-person limited liability company and a wholly state-owned company is a unilateral legal act.
Article 6 of People's Republic of China (PRC) Company Law
To establish a company, it shall apply to the company registration authority for registration of establishment according to law. Those that meet the conditions for establishment as stipulated in this Law shall be registered as limited liability companies or joint stock limited companies respectively by the company registration authority; Those who do not meet the conditions for establishment as stipulated in this Law shall not be registered as a limited liability company or a joint stock limited company.
Where laws and administrative regulations stipulate that the establishment of a company must be approved, the approval procedures shall be handled according to law before the company is registered.
Second, the way to set up the company
There are basically two ways to register and establish a company, namely, initiating establishment and offering establishment.
1, initiate the establishment.
Initiation and establishment, also known as "simultaneous establishment" and "simple establishment", refers to the way that the promoters subscribe for all the shares of the company or the shares issued in the first phase to set up the company. A limited liability company can only be established by way of sponsorship, which is funded by all shareholders.
A joint-stock company may also adopt the method of initiating the establishment. Article 78 of China's "Company Law" clearly stipulates that a joint stock limited company may be established by means of initiation or offering. Initiating the establishment is relatively simple in procedure.
2. Issuance and establishment
The establishment by public offering, also known as "gradual establishment" or "compound establishment", refers to the way that the promoters only subscribe for the shares of the company or part of the shares issued in the first phase, and the rest are raised to set up the company.
The third paragraph of Article 78 of China's Company Law stipulates: "The establishment by offer means that the promoters subscribe for a part of the shares that the company should issue, and the rest of the shares are offered to the public or to a specific target to set up a company."
Therefore, the establishment of public offering can be established through public offering of shares to the society, or it can be established by issuing shares only to specific objects without issuing shares. This method is only applicable to the establishment of a joint stock limited company.