Difference between paid-in capital and share capital

Legal analysis: share capital is an account used by a joint stock limited company to calculate the money received by issuing shares. The accounting treatment is: borrowing: bank deposits and other subjects, and lending: share capital. Paid-in capital is an account used by a limited company to calculate the investment money received from shareholders. Accounting treatment: debit: bank deposits and other subjects, credit: paid-in capital.

Legal basis: People's Republic of China (PRC) Company Law.

Article 27 Shareholders may make capital contributions in cash or in kind, intellectual property rights, land use rights and other non-monetary properties that can be valued in money and can be transferred according to law. However, except for the property that cannot be used as capital contribution as stipulated by laws and administrative regulations.

Non-monetary property as capital contribution shall be evaluated and verified, and its value shall not be overestimated or underestimated. Where there are provisions in laws and administrative regulations on evaluation and pricing, those provisions shall prevail.

Article 28 Shareholders shall pay their respective subscribed capital contributions in full and on time in accordance with the Articles of Association. Where the shareholders make capital contributions in cash, they shall deposit their capital contributions in full into the account opened by the limited liability company in the bank; Where non-monetary property is used as capital contribution, the formalities for the transfer of property rights shall be handled according to law.

Where a shareholder fails to pay the 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 and on time.

Article 29 After a shareholder has paid the capital contribution specified in the Articles of Association in full, the representative designated by all shareholders or the agent entrusted by all shareholders shall submit the application for company registration, the Articles of Association and other documents to the company registration authority to apply for registration of establishment.

Article 135 When a company issues new shares, it may determine the issue price according to the company's operating and financial conditions.

Article 136 After issuing new shares and fully raising shares, a company must register the change with the company registration authority and make a public announcement.