Recently, the Company Law of the PRC has been revised and adopted at the 7th Session of the Standing Committee of the Fourteenth National People's Congress of the PRC. The revised Company Law of the PRC will come into force on 1 July 2024. The key points of the revision include:

1. Cancel the Restriction on One-Person Company
   
   The Current Company Law: One natural person is allowed to establish a one-person limited liability company only, which shall not establish any more one-person limited liability company.
   
   The new Company Law has cancelled the above restrictions on one-person limited liability company and the establishment of a one-person joint stock limited company is allowed as well.
   
   
2. Simplify the Organization Structure of Limited Company
   
   The Current Company Law: A limited liability company shall set up a board of supervisors. For a small-scale limited liability company or a limited company with small number of shareholders, it may have 1 or 2 supervisors and does not have to establish a board of supervisors.
   
   The New Company Law: (1) With the unanimous consent of all shareholders, a small-scale limited liability company or a limited company with small number of shareholders does not have to appoint supervisor(s). (2) A limited liability company is not required to have a board of supervisors or supervisors if it has established an audit committee composed of directors of the board of directors which exercises the functions of the board of supervisors.
   
   
3. Expand the Scope of Candidate for Legal Representative
   
   The Current Company Law: The legal representative of a company shall be assumed by the chairman of the board of directors, executive director or manager.
   
   The New Company Law: The legal representative of a company shall be assumed by the director or manager of who represents the company to execute company affairs.
   
   
4. Lift the Cap on Board Members
   
   The Current Company Law: The board of directors of a limited liability company shall be composed of 3 up to 13 members, while the board of directors of a joint stock limited company shall be composed of 5 up to 19 members.
   
   The New Company Law: The board of directors for a limited liability company or a joint stock liability company shall be composed of 3 or more members. There is no cap on the board members.
   
   
5. Amend the Statutory Liquidator for Limited Company
   
   The Current Company Law: The liquidation group of a limited liability company shall be composed of the shareholders, while that of a joint stock limited company shall be composed of the directors or any other persons as determined by the shareholders' meeting.
   
   The New Company Law: The directors of the company shall serve as liquidators in the case of liquidation. The liquidation group of a limited liability company or a joint stock limited company shall be composed of the directors, unless otherwise provided by the articles of association of the company or otherwise decided by the shareholders' meeting. If the statutory liquidators fail to perform the liquidation obligation in time and causes losses to the company or creditors, they shall be liable for compensation.
   
   
6. Shorten the Capital Contribution Period
   
   The Current Company Law: There is no restrictions on the capital contribution period for the registered capital subscribed by the shareholders of a limited liability company or the share capital subscribed by the promoters of a joint stock limited company.
   
   The New Company Law: (1) The registered capital subscribed by the shareholders shall be fully contributed within 5 years upon the establishment of the company. If the shareholders fail to pay the registered capital within the prescribed time and grace period, they may lose the equity of the unpaid registered capital. (2) The promoters of a joint stock limited company shall pay the share subscription in full before the establishment of the company. (3) Companies established before 1 July 2024 shall adjust their contribution periods accordingly if their capital contribution period are not in line with the new Company Law.

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