Article 47 of the New Company Law provides that "the amount of capital contributed by all shareholders shall be paid in full by the shareholders within five years from the date of the establishment of the company in accordance with the provisions of the articles of association" (the "Five-Year Paid-in Contribution") With the introduction of this provision, the practical issue of five-year paid-up capital has attracted great attention from practitioners.
In this regard, Article 266 of the New Company Law expressly provides that: "If a company registered and established before the implementation of this Law has made capital contributions for a period exceeding the period prescribed by this Law, it shall gradually adjust the capital contribution period to within the period prescribed by this Law, unless otherwise provided by laws, administrative regulations or the State Council; if the capital contribution period or the amount of the capital contribution is obviously abnormal, the company registration authority may, in accordance with law, require the company to adjust the capital contribution period in a timely manner. The specific implementation methods shall be prescribed by the State Council."
Simply interpreting the provisions of the new Company Law, it seems to have the flavor of "the old ways of the old". For the implementation of the new law (July 1, 2024) before the establishment of the company, the new company law does not take a "one-size-fits-all" approach, but to allow the existence of the company, "the period of capital contribution exceeds the period specified in this law", which is not only the objective reality, but also the objective needs of the stability of the market order. This is not only due to the objective reality, but also the objective needs of the stability of the market order. However, it should be noted that the new Company Law also gives the future direction from two other aspects: (1) it should be gradually adjusted within the period stipulated in this law; (2) for the period of capital contribution and the amount of capital contribution is obviously abnormal, the company registration authority may require it to adjust in time according to the law.
Further interpretation of the above provisions, the new company law is only temporary, transitional recognition and respect for the objective existence of the "old company", for the capital contribution period of more than 5 years, the future need to be adjusted to 5 years within the specified period. At the same time, for the "capital contribution period, the amount of obvious anomalies", the company registration authority may be required by law to make timely adjustments. This "transition period" in the end how long? What will be recognized as "obvious abnormal" are to be followed by the State Council and relevant departments to make specific provisions.
For the time being, it is certain that from July 1, 2024, company registration authorities at all levels will process company registrations in accordance with the amended new Company Law and relevant administrative regulations, State Council decisions and general administrative regulations. Until then (as of June 30, 2024), registration will continue to be processed in accordance with the current Company Law. For the possibility of crossing the period of company registration, the proposed company registration of enterprises need to plan ahead, choose the appropriate time for processing, to avoid unnecessary duplication of work, after all, the convergence of the old and new company law will certainly bring about some of the provisions of the Statute and other aspects of the changes. Of course, even if the current stage of company registration, will not be mandatory on July 1, 2024 under the new Company Law to re-register, but will be unified in the subsequent amendment of the registration process to regulate.
The State Administration for Market Regulation has also issued guidelines to address this issue.
