Article 23
The following conditions shall be fulfilled for the incorporation of a limited liability company:
(1) The number of shareholders conforms to the statutory quorum;
(2) The capital contributions of the shareholders reach the statutory minimum amount of capital;
(3) The shareholders have jointly formulated the articles of association of the company;
(4) The company has a name and an organizational structure established in compliance with the requirements for a limited liability company; and
(5) The company has a domicile.
Article 24
A limited liability company shall be incorporated by not more than fifty (50) shareholders.
Article 25
The articles of association of a limited liability company shall specify the following particulars:
(1) the name and domicile of the company;
(2) the scope of business of the company;
(3) the registered capital of the company;
(4) the names or titles of the shareholders;
(5) the method, amount and time of capital contributions by the shareholders;
(6) the organization of the company, its method of creation, functions and powers and the
rules of procedure;
(7) the legal representative of the company;
(8) other items which the shareholders deem necessary to be specified. Shareholders shall sign and execute the article of association of the company.
Article 26
The registered capital of a limited liability company shall be the amount of the paid-up capital contributions of all its shareholders as registered with the company registration authority. The amount of the initial investment contributed by all shareholders shall not be lower than twenty percent (20%) of the registered capital or the minimum amount prescribed by the law, the remaining of which shall be fully paid up within two years of the establishment of the company. In the case of an investment company, the remaining amount of the registered capital may be paid up within five years of the establishment of the company. The minimum amount of the registered capital of a limited liability company shall be RMB 30, 000. Where laws and administrative regulations provide for more than the minimum amount, such provisions shall apply.
Article 27
Except for assets forbidden to be used as contribution by laws and administrative regulations, a shareholder may make its capital contributions to a company in currency or by contributing such non-currency property as material objects, intellectual property rights and land-use rights that can be evaluated in the form of currency and transferred in accordance with the law.
The non-currency property to be contributed as capital shall undergo an asset valuation and verification, and shall not be overvalued or undervalued. Where there are other provisions of laws and administrative regulations on the valuation and verification of non-currency property, such provisions shall apply.
The amount of the capital contributions in currency shall not be lower than thirty percent (30%) of the amount of the registered capital of the limited liability company.
Article 28
Each shareholder shall make in full the amount of the capital contribution subscribed for under the articles of association of the company. Where a shareholder makes its capital contribution in currency, it shall deposit the full amount of such capital contribution in currency in the bank account opened by the limited liability company to be established. Where a shareholder makes its capital contribution in the form of non-currency property, the property rights therein shall be transferred in accordance with legally prescribed procedures.
Shareholders failing to make full capital contributions they have subscribed for in accordance with the preceding paragraph shall, they shall, in addition to making the contributions in full, be liable for breach of contract towards the shareholders who have made full capital contributions.
Article 29
After all shareholders have made their capital contributions in full, such contributions must be verified by a statutory capital verification institution which shall issue capital verification certificates.
Article 30
After the initial capital contributions of the shareholders have been verified by a statutory capital verification institution, application shall be made to the company registration authority for registration of the incorporation of the company by a representative designated by all the shareholders or by an agent jointly entrusted by them, who shall submit such documents as an application for registration, the articles of association and the capital verification certificate.
Article 31
Where, after the incorporation of a limited liability company, it is discovered that the actual value of the non-currency property contributed as capital is notably less than the value stated in the articles of association, the shareholders that made such contributions shall make up the difference. Those who are shareholders at the time of the incorporation of the company shall bear joint and several liability therefor.
Article 32
After a limited liability company has been incorporated, it shall issue capital contribution certificates to its shareholders.
A capital contribution certificates shall specify the following items:
(1) the name of the company;
(2) the registration date of the company;
(3) the registered capital of the company;
(4) the name or title of the shareholder, the amount and date of its capital contribution;
(5) the serial number of the capital contribution certificate and the date of its verification and issuance. A capital contribution certificate shall bear the seal of the company on it.
Article 33
A limited liability company shall prepare a roster of its shareholders with the following items therein:
(1) the names or titles and domiciles of the shareholders;
(2) the amounts of capital contributions of the shareholders; and
(3) the serial numbers of the capital contribution certificates.
The shareholders recorded in the roster of shareholders may claim and exercise the right of shareholders on the strength of the roster of shareholders.
The company shall register the names of shareholders and the amount of capital contributions of the shareholders with the company registration authority and, in the event of any change thereof, apply for alteration registration. Unless duly registered, the above-mentioned items and any changes thereof shall not be a defense against a third party.
Article 34
A shareholder shall have the right to view the articles of association, the minutes of shareholders meetings, resolutions of board of directors and board of supervisors and the financial and accounting reports of the company.
Shareholders may view the accounting books and reports of the company. For this purpose, they shall submit a written request and state reasons. Where the company reasonably believes that shareholders have unjust purposes in viewing the accounting books and reports which may harm the legal rights and interests of the company, the company may refuse such request and shall, within fifteen (15) days of such request, reply in written form and state reasons. Given such, shareholders may apply to the people’s court for an order under which the company shall provide the shareholders with such references.
Article 35
Unless otherwise agreed upon by all shareholders, shareholders shall draw dividends in proportion to their actual capital contributions and, where a company increases capital, shall have priority in subscription for new shares in proportion to their actual contributions.
Article 36
Once a company is registered, its shareholders shall not withdraw their capital contributions.
