Where the establishment is initiated, the promoters subscribe for all the shares of the company. Therefore, in the establishment stage, investors can subscribe for shares of joint-stock companies as sponsors. After the promoters have paid in full the subscribed shares, the joint-stock company may raise shares from others.
Where a joint stock limited company is established by offering, the promoters shall subscribe for not less than 35% of the shares of the joint stock limited company. If the company is not listed, it means that the remaining shares cannot be publicly issued to the public, but the company can still issue shares to specific objects, such as the company's executives subscribing for some shares of the company.
Legal basis: People's Republic of China (PRC) Company Law.
Article 77 A joint stock limited company may be established by means of initiation or offering.
A promoter refers to a company established by the promoters who subscribe for all the shares that should be issued by the company.
The establishment by public offering means that the promoters subscribe for part of the shares that should be issued by the company and raise the remaining shares to the public or specific objects to establish the company.
Article 80 Where a joint stock limited company is established by means of sponsorship, the registered capital shall be the total share capital subscribed by all sponsors registered at the company registration authority. Before the shares subscribed by the promoters have been paid in full, they may not raise them from others.
Where a joint stock limited company is established by offering, the registered capital shall be the total paid-in share capital registered with the company registration authority.
Where laws, administrative regulations and decisions of the State Council have other provisions on the paid-in amount of registered capital and the minimum amount of registered capital, those provisions shall prevail.
Article 84 Where a joint stock limited company is established by offering, the shares subscribed by the promoters shall not be less than 35% of the total shares of the company. However, if there are other provisions in laws and administrative regulations, those provisions shall prevail.