On December 29, 1993, the Company Law was passed, and 30 years later, on December 29, 2023, we ushered in the newly revised Company Law. There are three new amendments that impress me the most, all of which are related to small and medium-sized enterprises, including the paid-in system for limited liability companies, the qualifications of legal representatives, and the horizontal legal personality denial system. Let's talk about them one by one.
Let's start with the most powerful article 47, which reads as follows.
The registered capital of a limited liability company is the amount of capital contribution subscribed by all shareholders registered with the company registration authority. The amount of capital contribution subscribed by all shareholders shall be paid in full by the shareholders within five years from the date of establishment of the company in accordance with the provisions of the articles of association.
After 2013, the registered limited liability company does not need to pay in the registered capital, so we see that some unknown companies often declare the registered capital very high in order to bluff, tens of millions, hundreds of millions, I even see billions or even tens of billions of registered capital in extreme cases, and the annual revenue of these companies may only be hundreds of thousands of yuan, and the profit is only tens of thousands of yuan.
The so-called "how bold a person is, how much registered capital he dares to report". Anyway, you don't need to actually pay, and it doesn't matter how high the report is, speaking of which, you can run a company with a registered capital of tens of millions or hundreds of millions, which is very face-saving. It doesn't matter if it's an Airbus, no one else knows about it anyway.
This can no longer be done after the passage of the new company law, which clearly stipulates that the amount of capital contribution subscribed by shareholders must be paid in full within five years from the date of incorporation of the company.
You can continue to declare hundreds of millions of registered capital, but you must put the money into the company's account within five years. Many small bosses have a working capital of only hundreds of thousands of yuan, let alone a capital contribution of hundreds of millions, and they can't make up millions of yuan. Once it is not completed in five years, sorry, the reduction may also be punished.
It is foreseeable that in the future, there will be fewer and fewer companies that falsely declare their registered capital. Will companies that have been incorporated before the five-year paid-in clause come into effect be affected?
"It shall be gradually adjusted to within the time limit specified in this Law", and "if the term and amount of capital contribution are obviously abnormal, the company registration authority may require it to adjust in a timely manner in accordance with the law".
To make it clear, there are two solutions. The second is to adjust the amount of registered capital, and if it is unable to pay in full within the grace period, the company registration authority may request a reduction in the registered capital, and "large companies" will be "small companies".
The resumption of the paid-in system will have a greater impact on small and medium-sized enterprises. To be honest, large companies are strong and do not need to make a fuss about the registered capital, even if there is no paid-in registered capital in the early stage, they have enough financial ability to pay in full. Small companies are different, originally in order to blempty or meet the requirements of bidding and deliberately declare a higher registered capital, the future of this road will not work.
In addition to the most controversial five-year paid-up clause, Article 10 of the new law clearly stipulates the qualifications of a legal representative, which can only be held by a director or manager who performs corporate affairs on behalf of the company.
In order to avoid trouble, the executives of many enterprises are reluctant to serve as legal representatives, and let ordinary employees serve as employees, and increase their salaries by a few hundred yuan every month. There are even more disgusting things, without discussing with the employees, they directly take their ID cards to the industrial and commercial bureau to change the legal representative, and the employees do not know that they represent the company, and they do not know until the company owes debts and is not restricted from high consumption.
The legal representative of the company should be a person who has a certain decision-making power and voice in the company, and the law clearly stipulates that the executive director or manager should serve to plug the loopholes in practice.
Article 23 is not mentioned much, but I think it is one of the key provisions of the new company law, and it has a great impact on the "old lai".
The law stipulates that "if a shareholder uses two or more companies under his control to carry out the acts specified in the preceding paragraph, each company shall be jointly and severally liable for the debts of either company." ”
The essence of this provision is a horizontal system of denial of corporate personality. In the past, we only had a vertical legal personality denial system, and the company's debts were irrelevant to the shareholders, but the shareholders did things that harmed the company's interests, such as using the company's money for personal consumption or transferring personal debts to the company, then the independent personality was broken, and the shareholders needed to use their personal property to repay the company's debts.
The horizontal denial of corporate personality system breaks the separation of assets and debts between different companies, which may not be easy to understand, so let me give you an example.
Suppose that Zhang San has two companies under his name, namely Company A and Company B, both of which are actually controlled by Zhang.
In order to maximize profits and avoid the denial of vertical legal personality, Zhang San asked Company A to provide accounting services to Company B and charge fees far above the market price, and at the same time borrowed money in the name of Company B or refused to pay the goods owed to suppliers, and filed for bankruptcy protection against Company B after hollowing out Company B and "fattening" Company A.
Although Company A and Company B were both controlled by Zhang San, they both had independent legal personality, and their assets and debts were independent of each other, and Zhang San made a lot of profits through Company A and left all the debts to the bankrupt Company B. After the implementation of the new law, this can no longer be played, the horizontal legal personality independence is broken, and the creditor can demand that company A repay the money for company B.
The above three points are the most important changes in the new company law. Finally, let's talk about whether small and medium-sized enterprises will usher in the "end times".
The change of the subscription system to the paid-in system will inevitably affect the companies that are ready to be registered and the companies that have already registered, as mentioned above, large enterprises will not be greatly affected because of the need to pay in, and small and medium-sized companies are different. There are currently more than 48 million companies in the mainland, 99% of which are small and medium-sized enterprises, so the scope of the change in the system is very large.
However, I don't think SMEs will have an "end times". Because the law does not stipulate that a company that cannot pay off the subscribed capital contribution within five years must be deregistered, the amount of registered capital can be reduced, which is consistent with the company's strength.
What if we can't even get 100,000 yuan out of funds to open a company? This kind of leather bag company should have left the market, and its original purpose was not pure, and it was often related to breaking the law and committing crimes, so it was a good thing not to give them room to survive.
The registered capital should be the most intuitive data for people to understand the strength of the company, and it is on the business license, and the public channels can be queried, and there is no need to check the accounts and check the business. The former subscription system had good aspects, but it was gradually broken by people who love to brag, and the change back to the five-year paid-in system stopped the unhealthy trend, and at the same time avoided the wrong judgment of the authenticity and effectiveness of investment, and reduced the probability of creditor's rights and equity disputes.