China’s New Company Law - Prepare for launch

January 2024

The much-anticipated new Company Law of the People's Republic of China (the ‘New Company Law’ or ‘New Law’) was formally approved by the Standing Committee of the National People’s (NPC) on 29 December 2023 and will take effect on 1 July 2024.

The New Company Law reflects the most comprehensive revision to Chinese company law since the law was first enacted in 1993, with reforms to numerous aspects of company administration in China, including corporate establishment and governance. The law essentially adopts most of the changes included in the third version of the draft amendments, and includes improvements with respect to some specific articles. These changes will not only affect all existing companies, but also investors, both foreign and domestic, who intend to set up new companies in Mainland China. In this article, we focus on some of the major changes related to the capital regime, corporate governance system, responsibilities of directors, supervisors and senior management, as well as the simplified procedures. We also highlight their corresponding implications.