According to the provisions of the Companies Act of China, the establishment of a company limited by shares should meet the following six conditions:
1. The number of initiators is in accordance with the quorum. A company limited by shares must have an initiator, who can either be a natural person or a legal person. The number of initiators should be more than 2 and less than 200. Among them, more than half of the initiators must have residence in China. If a state-owned enterprise is transformed into a company limited by shares, it shall adopt the way of stock.
2. The capital subscribed by the initiators and publicly raised by the society reaches the minimum amount of statutory capital. The Companies Act of China clearly stipulates that the registered capital of a company limited by shares should be the total actually paid capital stock as registered in the company registration authority. The total capital stock is the product of the face value of the company’s shares and the total number of shares. At the same time, it also stipulates that the minimum registered capital of the company is RMB 5 million yuan. For minimum requirement over RMB 5 million yuan, it is separately stipulated by laws and administrative regulations. In case of establishment, the initiators shall subscribe for all the shares issued by the company. In case of establishment by stock floatation, the shares subscribed by the initiators shall not be less than 35% of the shares of the company.
3. The issuance of shares and the preparatory work are in accordance with the provisions of the law;
4. Initiators formulate the articles of association and get pass in the founding meeting.
5. Have a company name and an organizational structure complying with the requirements for establishing a company limited by shares. The organizational structure of a company limited by shares consists of shareholders’ general meeting, board of directors, manager and board of supervisors. The shareholders’ general meeting is the highest authority, and shareholders present at a shareholders ‘general meeting have one vote for each share they hold. The board of directors, consisting of 5~19 members, is the executive organ of the company’s shareholders’ meeting. The manager is in charge of the daily operation and management of the company.
Conditions for the establishment of a company
Limited liability company
1. The minimum registered capital is 30 thousand.
(1) Have a quorum of more than 2 and less than 50 shareholders who jointly found the company;
(2) Shareholders’ contribution reaches the minimum amount of statutory capital.
(3) Shareholders jointly formulate the articles of association of the company;
(4) Have a company name and an organizational structure complying with the requirements for establishing a limited liability company;
(5) There are fixed places and necessary conditions for production and operation.
2. One person limited liability company: The minimum registered capital is 100 thousand yuan.
(1) The shareholder is a natural person or a legal person;
(2) A natural person can only register one person limited liability company.
(3) The registered capital of a one person limited company must be paid at one time.