A larger amount of registered capital means a stronger company?
It's a common thought. So many people might tend to set a quite large amount when opening a company. But don't do that in China!
The newly revised Company Law will take effect on July 1, 2024, stipulating that the total amount of registered capital subscribed by all shareholders must be paid within five years.
In the past, many companies' paid-in capital was not the amount of registered capital. However, after the implementation of the new company law, these companies will have to consider adjusting the registered capital amount.
If the current registered capital is suitable, it can be paid in one or multiple instalments within a specified period; If the registered capital cannot be paid, it is advisable to consider reducing the registered capital. A capital reduction generally requires a public notice period of 45 days.
Besides, companies can choose to contribute capital in the form of currency, or assets such as tangible property, intellectual property rights, land use rights, equity, and debt. When using non-monetary contributions, the transfer procedures of property rights should be completed by the law.
If the shareholders make a false contribution or fail to make a full contribution on time, they will be fined 50,000 to 200,000 yuan by the company registration authority;
If the circumstances are serious, a fine of 5% to 15% of the amount of false contribution or non-contribution shall be imposed; Those responsible will be fined 10,000 to 100,000 yuan.
All in all, the registered capital must be filled in according to your actual ability!
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