Jan. 2026 - A year and a half under the new Company Law: navigating top 3 compliance challenges

To assist you in understanding the compliance requirements under the revised Company Law effective from July 2024, we have outlined some key compliance priorities for limited liability enterprises below for your reference.

Resignation of legal representative: a new legal representative must be appointed within 30 days

• Article 10 of the Company Law specifies that a director or manager acting as legal representative, upon tendering resignation, shall be deemed to have resigned from such role simultaneously.
• The company must appoint a new legal representative within 30 days of the resignation and complete the relevant registration formalities promptly.
• Non-compliance may give rise to legal disputes. During the period from the resignation of the former legal representative to the completion of registration changes, the company shall remain liable for civil acts conducted by the former legal representative in the company's name.

Capital contribution period: adhere strictly to statutory requirements

• For companies established after 1 July 2024: shareholders must fully pay the registered capital within 5 years of the company’s establishment.
• For existing companies registered on or before 30 June 2024: a “5+3” transition period applies. Such companies are required to adjust the deadline for outstanding capital contributions to within 5 years by 30 June 2027
• if a company would adjust the capital contribution terms, shall:

        - update the adjusted details in the Article of Association first, and then;

        - disclose the adjusted information to the competent authority within 20 working days from the date of relevant information adjusted.

Capital contribution verification: board of directors must fulfil its obligations

·         After the company's establishment, its Board of Directors shall verify the capital contributions made by shareholders.

·         If any shareholder is found to have failed to make timely and full contributions in accordance with the Articles of Association, the company shall issue a written demand notice to that shareholder.

·         If the company incurs losses arising from delayed performance of capital contribution obligations, the responsible director shall compensate the company accordingly.

Actions recommended

To ensure compliance and a smooth transition, it is recommended that enterprises:

• Conduct a comprehensive review of the current Articles of Association
• Improve and adjust internal rules and procedures as necessary to align with the provisions of the revised Company Law and the draft judicial interpretation

We remain available should you have any questions. Please do not hesitate to reach out to your Forvis Mazars point of contact.