NPC Standing Committee Circulates Third Draft of Company Law Amendment

On 1 September 2023, the NPC Standing Committee circulated for public comment the Company Law (Revised Draft for Third Review). The third draft follows circulation of an initial draft in December 2021 and a second draft in December 2022.

In the September edition of GC Agenda China (subscription required), Morrison Foerster partner Paul McKenzie commented on the Draft that, “It feels like the NPC Standing Committee is close to the end of their drafting process and that we will see the Company Law amendments in their final form reasonably soon. A key focus of the amendments remains tightening requirements for shareholders to fund their subscribed share of registered capital and facilitating share transfers as well as the exercise by other shareholders of their associated pre-emptive rights. When the amendments are ultimately enacted, investors should consider amending the articles of association of their China subsidiaries to reflect new Company Law requirements and to avail themselves, where relevant, of those amendments that provide companies with greater flexibility than before.”