2023 China Company Law regulates:
- Company registered capital shall be fully injected by shareholders within 5 years after establishment.
- If a company is unable to pay off its due debts, the company or its creditors have the right to request shareholders to pay their undue capital contributions in advance.
- If the original shareholder transfers the undue capital contribution to new shareholder, in case the new shareholder is unable to pay off the capital contribution when it is due, then the original shareholder is still liable.
2023 China Company Law
Article 47 The registered capital of a limited liability company shall be the capital contribution subscribed by all shareholders registered with the company registration authority. The capital contribution subscribed by all shareholders shall be paid in full within five years from the date of establishment of the company in accordance with the provisions of the company’s articles of association.
If laws, administrative regulations and decisions of the State Congress otherwise stipulate the paid-in registered capital of a limited liability company, the minimum amount of registered capital, and the period for shareholders’ capital contribution, such provisions shall prevail.
Article 54 If a company is unable to pay off its due debts, the company or its creditors whose due claims have the right to require shareholders who have subscribed for capital contributions but not due to pay their capital contributions in advance.
Article 88 If a shareholder transfers equity for which the capital contribution has been subscribed but the capital contribution period is not due, the transferee shall bear the obligation to pay the capital contribution; if the transferee fails to pay the capital contribution in full on time, the transferor shall be liable to the transferee for failure to pay the capital contribution on time. The transferor shall bear supplemmentary liability to the capital contribution unpaid by transferee.
If a shareholder fails to pay the capital contribution in accordance with the capital contribution date stipulated in the company’s articles of association or the actual value of the non-monetary property used as capital contribution is significantly lower than the subscribed capital contribution amount, if a shareholder transfers equity, the transferor and the transferee shall be jointly and severally liable to the insufficient capital contribution; if the transferee does not know and shall not be kown that the above circumstances exist, the transferor shall bear the liability.
