China’s New Measures for Company Registration Management: Key Highlights and Implications

Purpose of the Measures

The primary goals of the new measures are threefold:

1. Standardization of Registration Procedures: Ensuring uniformity and clarity in company registration processes.
2. Strengthening Transaction Security: Safeguarding the integrity of market transactions by requiring accurate and reliable registration information.
3. Optimizing the Business Environment: Supporting the development of a unified and open national market while maintaining regulatory oversight.

These measures build on the Company Law of the People’s Republic of China and other related regulations.

Key Provisions

Responsibility for Registration Information

Applicants are responsible for the authenticity, legality, and validity of all materials submitted during company registration and filing. This underscores the importance of maintaining truthful and accurate information to avoid legal repercussions. 

Enhanced Business License Requirements

The business license must now include critical details such as:

• Company name, domicile, and type.
• Registered capital and the name of the legal representative.
• Scope of business and registration authority.
• Establishment date and uniform social credit code.

This ensures transparency and improves the reliability of business licenses as a reference for stakeholders.

Regulations on Capital Contributions

Shareholders of limited liability companies are required to follow specific rules regarding capital contributions:

• Subscribed capital must be fully paid within five years from the company’s establishment.
• Capital contributions can include monetary assets, intellectual property, land use rights, data, and other assets that are legally transferable and monetarily valuable.
• Non-monetary contributions must be appraised and verified, ensuring accurate valuation and compliance with laws.

For companies established before June 30, 2024, adjustments to subscribed capital contribution timelines are mandated to align with the five-year requirement, effective by mid-2027.

Measures to Prevent Abnormal Registrations

The measures introduce safeguards to ensure the authenticity and reasonableness of company registrations. Authorities will scrutinize instances where:

• Capital contribution timelines exceed 30 years.
• Registered capital exceeds RMB 1 billion.
• Other factors raise concerns about compliance with common business practices.

Authorities are empowered to assess business conditions and require adjustments if necessary. 

Negative List and Scope of Business

The scope of business for companies must adhere to the negative list for market access, which specifies sectors subject to restrictions or prohibitions. Foreign-invested companies are also required to comply with special administrative measures for foreign investment access.

Public Disclosure of Information

To enhance transparency, companies must publicly disclose shareholder capital contributions, share subscriptions, and other relevant information via the national enterprise credit information publicity system within 20 working days of their creation. 

Streamlined Deregistration and Business Closure

For companies undergoing deregistration or business closure, the new measures promote inter-departmental coordination by sharing relevant information with tax and social security departments. This simplifies procedures and reduces administrative burdens for businesses.

Implications for Businesses

• Increased Compliance Burden: Businesses, especially foreign-invested enterprises, must ensure strict compliance with the updated registration and reporting requirements. Inaccurate or incomplete submissions can result in penalties, rejection of applications, or even deregistration.
• Enhanced Regulatory Scrutiny: Companies with unusual capital structures, extended contribution timelines, or other irregularities will face closer scrutiny. Businesses should proactively evaluate their compliance with the new standards and make necessary adjustments to avoid regulatory intervention.
• Opportunities for Foreign-Invested Companies: The measures reaffirm China’s commitment to improving its business environment and enhancing market access for foreign investors. However, compliance with the negative list and special foreign investment measures remains critical for navigating regulatory hurdles.
• Greater Transparency and Market Integrity: The emphasis on transparency and public disclosure fosters a fairer and more reliable market environment. Stakeholders, including investors and business partners, will benefit from improved access to accurate company information.

Penalties for Non-Compliance

The measures impose strict penalties for violations, including:

• Fines of up to RMB 100,000 for intermediary agencies knowingly assisting in false registrations.
• Confiscation of illegal gains and additional penalties for fraudulent submissions.
• Revocation of registration for companies that engage in malicious activities, such as evading debts or administrative penalties.

These provisions highlight the government’s commitment to maintaining market order and deterring fraudulent practices.

Conclusion

The Measures for the Implementation of Company Registration Management mark a significant step in China’s efforts to modernize and streamline its regulatory framework. By emphasizing transparency, integrity, and compliance, the new measures aim to create a more secure and efficient business environment.

Businesses operating in China must adapt to these changes by strengthening internal governance, ensuring accurate filings, and engaging with professional advisors to navigate the evolving regulatory landscape. With the effective date of February 10, 2025, now is the time for companies to prepare for compliance and seize the opportunities presented by these reforms.