A limited liability company (hereinafter referred to as a limited company) refers to an economic organization registered in accordance with the Regulations of the People's Republic of China on the Administration of Company Registration, which is established by shareholders with less than 50 employees. Each shareholder shall bear limited liability to the company with the amount of capital subscribed, and the company shall be liable for its debts with all its assets. Limited liability companies include wholly state-owned companies and other limited liability companies.
The term "limited liability company" as mentioned in the Company Law refers to a company established within the territory of China, and the shareholders of the company are liable to the company to the extent of their subscribed capital contribution.
Limited company is the most important organizational form for Chinese enterprises to implement corporate system, which refers to registration according to the Regulations of the People's Republic of China on the Administration of Company Registration. Its advantage is that the establishment procedure is relatively simple, and there is no need to issue an announcement or account number. In particular, the company's balance sheet is generally not open, and the company's internal institutions are flexible. Its disadvantage is that it is impossible to issue shares publicly, and the scope and scale of funds raised are generally small, which is difficult to meet the needs of large-scale production and operation activities. Therefore, this form of limited liability company is generally suitable for small and medium-sized enterprises.