Basic Concept of Registered Capital Verification

Registered capital reflects the amount of property granted by the state for the operation and management of the enterprise legal person or the self-owned property of the enterprise legal person. There is a significant difference between the concepts of registered capital and registered funds. The registered capital reflects the right to manage the enterprise; whereas, the registered capital reflects the proprietary rights of the corporate legal person, and all capital invested by shareholders may not be withdrawn, and the company exercises the proprietary rights. The registered capital is the total of the actual assets of the enterprise, while the registered capital is the total of the capital actually contributed by the investors. The registered capital increases or decreases with the increase or decrease of the actual funds, i.e., when the actual funds of the enterprise exceed or fall short of the registered capital by more than 20%, a change of registration must be made. However, the registered capital may not be arbitrarily increased or decreased without going through the statutory procedures.

Registration Requirements - Registered Capital Verification

2006 Company Law minimum registered capital

After the implementation of the new Company Law in 2006, the minimum registered capital for a company is:

The minimum registered capital for a limited liability company is 30,000 RMB, as stipulated in Article 26 of the new "Company Law."

The minimum registered capital for a sole proprietorship is 100,000 yuan, and shareholders must pay the full capital contribution in one installment. Article 59-64 of the new Company Law.

The minimum registered capital for a joint-stock company is 5 million yuan, as stipulated in Article 81 of the new Company Law.

After the amendment to the new company law in 2006, the provision that differentiated the minimum registered capital based on the company's business scope was abolished. The minimum registered capital for limited liability companies was unified from 100,000 to 500,000 yuan to 30,000 yuan, and for joint-stock companies, it was reduced from the original 10 million yuan to 5 million yuan. Although the authorized capital system was not adopted later for various reasons, it was permitted that both types of companies could pay the capital in installments rather than in one lump sum. However, it was required that the initial contribution of all shareholders not be less than 20% of the registered capital (the initial installment contribution not less than the minimum registered capital limit), and the remaining portion must be paid in full within two years. For investment companies, the full payment can be made within five years.

In terms of the capital contribution structure, there are two key changes: first, expanding industrial property rights to encompass all intellectual property rights; second, removing the limit on the proportion of intangible property contributions. It now only stipulates that the amount of monetary contributions must not be less than 30% of the registered capital. The most significant modification is the fundamental shift in the legislative approach to shareholder contributions. It replaces the previous rigid, listed regulations with a flexible abstract standard: "non-monetary property that can be valued in currency and legally transferred." This not only substantially broadens the scope of shareholder contributions but also fully utilizes various investment resources and social wealth, maximizing the satisfaction of shareholders' and the company's investment needs.

Regulations for Verification of Registered Capital

Article 1: In order to strengthen the registration and management of the company's registered capital and paid-in capital, and standardize the company registration procedures, in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the "Regulations on the Administration of Company Registration in the People's Republic of China" (hereinafter referred to as the "Company Registration Regulations"), and other relevant provisions, these regulations are formulated.

Article 2: The registered capital of a limited liability company is the total amount of contributions subscribed by all shareholders, as legally registered by the company registration authority.

The registered capital of a corporation established by the发起设立 method is the total amount of shares subscribed by all the founders, as legally registered by the company's registration authority.

The registered capital of a corporation established by way of fund-raising shall be the total amount of the actual subscribed capital legally registered with the company registration authority.

Article 3: The actual paid-up capital of the company is the amount of capital or total share capital actually delivered by all shareholders or promoters and legally registered by the company's registration authority.

Article 4 The company registration authority shall register the registered capital and the actual paid-in capital of the company in accordance with laws, administrative regulations, and relevant national regulations. For those that meet the requirements, registration shall be granted; for those that do not meet the requirements, registration shall not be granted.

Article 5: The registered capital and the amount of actual paid-in capital of the company, as well as the time and method of contribution by shareholders or founders, shall comply with the relevant provisions of laws and administrative regulations.

Article 6: The initial contribution of shareholders or founders at the time of company establishment, as well as any changes to the registered and actual capital, must be verified by a legally established capital verification agency and a capital verification certificate must be issued.

Article 7: Non-monetary properties contributed by shareholders or founders as capital shall be appraised and valued by an asset evaluation institution with qualification, and then verified by a capital verification institution.

Article 8: Shareholders or initiators may contribute capital in currency, as well as in non-monetary properties such as physical assets, intellectual property rights, land use rights, etc., that can be appraised in monetary terms and legally transferred.

Shareholders or initiators who contribute capital in forms other than currency, physical assets, intellectual property rights, and land use rights should comply with the relevant regulations jointly formulated by the State Administration for Market Regulation and relevant departments of the State Council.