One-person limited liability company as stipulated in the Company Law of the PRC refers to a limited liability company with only one natural person shareholder or legal person shareholder. Since there is only one shareholder in a one-person limited liability company, it is easy for the shareholder to abuse the independent status of corporate legal person and shareholder’s limited liability to evade debts. The Company Law of the PRC sets forth special rules in a separate section to regulate one-person limited liability company accordingly. The details are as follows:
Investment Restriction for Natural Person
One natural person is only allowed to establish a one-person limited liability company, which shall not establish any more one-person limited liability company.
No Shareholders Meeting
Since there is only one shareholder in a one-person limited liability company, it has no shareholders meeting. The shareholder can directly exercise its shareholder functions and powers by signing a written form decision. The convening procedures of shareholders' meeting, shareholders' voting procedures and other relating provisions as stipulated in the Company Law of the PRC shall not be applied under this circumstance.
Statutory Audit
A one-person limited liability company shall make a financial report by the end of every fiscal year and have the report audited by an accounting firm.
Joint and Several liability of the Shareholder
If the shareholder of a one-person limited liability company is unable to prove that the property of the one-person limited liability company is independent from its own property, it shall bear joint liabilities for the debts of the company.
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Intangible assets refer to identifiable non-monetary assets owned or controlled by an enterprise that have no physical form, usually including patent rights, non-patented technologies, trademark rights, copyrights, concessions, land use rights, etc. The following is a brief introduction to several tax-related issues of mixed intangible assets.
Individual industrial commercial defines as individuals or families who are involved in industrial and commercial activities within lawful areas, registered and recorded as law. Individuals attends in industrial and commercial activities should pay individual income tax, Actual and reasonable payment for employees as wages and salaries, allowing for deduction. Employers’ pre-tax deduction for salaries would not be allowed.
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An enterprise needs to pay enterprise income tax in advance on a quarterly basis for its business and need to declare and paid the yearly income tax within five months after the completion of a tax year and carry out "more refund and less paid", that is, the tax settlement and payment.
