1

The revised version of the Company Law comes into effect today, on 1 July 2024. Just yesterday, on 30 June 2024, China’s Supreme People’s Court emphasised that, in case of disputes, if the facts of the case were established prior to 1 July, the previous version(s) of the Company Law shall be applied - with exceptions, however.

2

Two official implementation rules or interpretations have already been released with respect to the revised Company Law:

• the above-mentioned provisions of China’s Supreme People’s Court on the time of the effectiveness of the revised Company Law (法释〔2024〕7号) and

• the provisions of the State Council on the implementation of the registered capital registration management system of the Company Law (国务院关于实施〈中华人民共和国公司法〉注册资本登记管理制度的规定).

8

Since its enactment in July 1994, the longest period that the Company Law went without an amendment (修正) or a comprehensive revision (修订) was 8 years, between 1 January 2006 and 1 January 2014. Outside of this period, the Company Law was amended or revised on average every 6 years.

25

The revision of the Company Law this time around is the biggest since the revision that occurred shortly after China’s accession to the WTO in 2005. Comparing the percentage of textual changes, approximately 25% of the text of the Company Law was changed this time around, while 39% were changed in 2005.

99

As per China’s State Administration for Market Regulation (SAMR), 99% of the companies currently existing in China are small and micro enterprises.

281

References in the Company Law to the directors of companies have increased from 216 under the previous version to 281 under the revised Company Law. This is mainly due to the plethora of new duties, obligations, and responsibilities attached to the position of directors under the revised Company Law.

300

Companies with a headcount of more than 300 will now need to establish employee co-determination either in their management boards or their supervisory boards.

48 390 000

The number of companies in China has increased from roughly 13 million in 2014 to more than 48 million in 2023.