State Council: The annual inspection system will be changed to the annual reporting system
On October 25, the State Council executive meeting decided to make major changes to the registered capital registration system of Chinese companies to reduce the cost of entrepreneurship and stimulate the vitality of social investment.
This is another major historical change in the legal system of Chinese companies following the revision of the Chinese company law in 2005. According to the deployment of the State Council, the keynote of the future reform of the company's capital registration system is to further relax government regulation, reduce the company's entry barriers to a greater extent, and encourage the entrepreneurial passion of society. There are two main points in the content: First, relax the registration conditions for registered capital. Except as otherwise stipulated by laws and regulations, the minimum registered capital of a limited liability company shall be 30,000 yuan, the minimum registered capital of a one-person limited liability company shall be 100,000 yuan, and the minimum registered capital of a company limited by shares shall be 5 million yuan; The initial contribution ratio of the (initiator) and the time limit for the paid contribution. The company's paid-in capital is no longer a business registration. At the same time, the promotion of registered capital was changed from the paid-in registration system to the subscription registration system, which reduced the cost of starting a company. On the basis of promptly improving relevant laws and regulations, the company shall implement a system in which the company's shareholders (sponsors) independently agree on the amount of capital contribution, the method of capital contribution, the time limit for capital contribution, etc., and are responsible for the authenticity and legitimacy of the payment. The second is to change the annual inspection system of the enterprise to the annual reporting system. Any unit or individual can inquire and make the relevant information of the enterprise transparent.
After these two major changes, China’s corporate legal system has undergone revolutionary changes in the “born†system, and this change has brought about the nirvana of the company’s legal temperament. Taking the capital registration system as an example, China’s first company law introduced in 1993 completely implemented the “legal capital system†and adhered to the three principles of determining, maintaining and maintaining the company’s capital. Under this kind of capital system, a company must be established not only to require registered capital once in place, but also to ensure that the company's assets are in line with the registered capital. This rigid capital system not only makes the company's setting threshold too high, but also ignores the enthusiasm of private investment. The institutional environment that led to China's entrepreneurship is extremely strict. The company's capital system and real life constraints and shortcomings are well known to the world, and the Chinese corporate legal system is not attractive and competitive internationally. Suffering from rickets. In 2005, the company law reform, with the concept of breaking government regulation and realizing company and shareholder autonomy, made major innovations in the capital system of Chinese companies, which was appreciated by all walks of life and wrote a great deal in the history of changes in the legal system of Chinese companies. Reasonable definition of the power boundary between government regulation and enterprise autonomy has greatly reduced the unnecessary interference of administrative power and national will to the company's life, publicizing the company's autonomy, promoting the spirit of the company's contract, and expanding the company's autonomy. In law, the statutory capital system is abolished and a compromised capital system is implemented. The shareholders of the company do not require a one-time payment of capital, and at the same time substantially reduce the minimum registered capital of the company, and reduce the minimum registered capital of limited liability companies and joint stock companies respectively. For the RMB 30,000 and RMB 5 million, the threshold for the establishment of the company has been greatly reduced, and the investment enthusiasm of social capital has been encouraged.
However, from now on, although the company law reform at that time should be considered successful, it still retains many provisions for government regulation and suppression of corporate shareholder autonomy. For China without a corporate law tradition, the choice of value for safety and efficiency. Legislation generally tends to sacrifice efficiency at a safe level. Although the revised company's capital registration system in 2005 has made significant progress compared to the previous ones, the threshold is still too high to adapt to the current changes in the Chinese economy and the entrepreneurial environment, especially the growth requirements of small and micro enterprises and innovative enterprises. Whether it is a limited liability company of 30,000 yuan or a one-person company of 100,000 yuan, setting the capital limit not only does not have any value and significance in terms of security, but more importantly, it creates the most for the development of small and innovative enterprises in all countries. In the case of a good institutional environment, an excessively high threshold has in fact become an obstacle to entrepreneurship. According to one statistic, the number of companies per thousand people in China is about 12, while in Japan and South Korea, there are more than 50, and most of the emerging markets are around 30. In addition to the big business environment, the company law sets too high a threshold. I am afraid that the number of Chinese companies is far lower than that of Japan and South Korea. As stated by the State Council executive meeting, the threshold for lowering the company's capital, "not only conforms to the eager expectations of the broad market players, but also helps to expand social investment, consolidate the steady development of the economy, and is in line with new technologies, new industries, and new formats. The requirements for the development of emerging productive forces are conducive to building a service-oriented government and reducing micro-intervention to the market. This is a true institutional dividend. After the minimum threshold is lifted, some small enterprises will suffer from false investment and withdrawal of capital. Walk into history.
In addition to major changes in the company's capital system, another major institutional change was the abolition of the company's annual inspection system. Frankly speaking, from the practice of company law for so many years, the company's annual inspection system is basically not necessary. In some places, the annual inspection system is basically a tool for generating income for the industrial and commercial departments and a legal way to toss enterprises. The abolition of the company's annual inspection and the implementation of the company's credit system is a major change in the concept of government regulation, which is conducive to further clarifying the relationship between the government and the company.
Friedman once said: "There is a strong ideological activity behind the Code." The company's legal system, as an important part of a national institutional system, affects to a certain extent the competitiveness of a country, offshore companies such as Cayman. The rise, to a certain extent, is the competitive advantage of an institution. A country that is competitive in the economic and entrepreneurial environment must be a country with a strong competitive advantage in the company's legal system. On this issue, Europe and the United States have given proof of eloquence, and the change of corporate system as a breakthrough point of reform reflects to some extent the management's determination to correct the distorted relationship between the government and the market. For those who are too strong and lose their entrepreneurial enthusiasm, it is undoubtedly a great institutional advancement.
This is another major historical change in the legal system of Chinese companies following the revision of the Chinese company law in 2005. According to the deployment of the State Council, the keynote of the future reform of the company's capital registration system is to further relax government regulation, reduce the company's entry barriers to a greater extent, and encourage the entrepreneurial passion of society. There are two main points in the content: First, relax the registration conditions for registered capital. Except as otherwise stipulated by laws and regulations, the minimum registered capital of a limited liability company shall be 30,000 yuan, the minimum registered capital of a one-person limited liability company shall be 100,000 yuan, and the minimum registered capital of a company limited by shares shall be 5 million yuan; The initial contribution ratio of the (initiator) and the time limit for the paid contribution. The company's paid-in capital is no longer a business registration. At the same time, the promotion of registered capital was changed from the paid-in registration system to the subscription registration system, which reduced the cost of starting a company. On the basis of promptly improving relevant laws and regulations, the company shall implement a system in which the company's shareholders (sponsors) independently agree on the amount of capital contribution, the method of capital contribution, the time limit for capital contribution, etc., and are responsible for the authenticity and legitimacy of the payment. The second is to change the annual inspection system of the enterprise to the annual reporting system. Any unit or individual can inquire and make the relevant information of the enterprise transparent.
After these two major changes, China’s corporate legal system has undergone revolutionary changes in the “born†system, and this change has brought about the nirvana of the company’s legal temperament. Taking the capital registration system as an example, China’s first company law introduced in 1993 completely implemented the “legal capital system†and adhered to the three principles of determining, maintaining and maintaining the company’s capital. Under this kind of capital system, a company must be established not only to require registered capital once in place, but also to ensure that the company's assets are in line with the registered capital. This rigid capital system not only makes the company's setting threshold too high, but also ignores the enthusiasm of private investment. The institutional environment that led to China's entrepreneurship is extremely strict. The company's capital system and real life constraints and shortcomings are well known to the world, and the Chinese corporate legal system is not attractive and competitive internationally. Suffering from rickets. In 2005, the company law reform, with the concept of breaking government regulation and realizing company and shareholder autonomy, made major innovations in the capital system of Chinese companies, which was appreciated by all walks of life and wrote a great deal in the history of changes in the legal system of Chinese companies. Reasonable definition of the power boundary between government regulation and enterprise autonomy has greatly reduced the unnecessary interference of administrative power and national will to the company's life, publicizing the company's autonomy, promoting the spirit of the company's contract, and expanding the company's autonomy. In law, the statutory capital system is abolished and a compromised capital system is implemented. The shareholders of the company do not require a one-time payment of capital, and at the same time substantially reduce the minimum registered capital of the company, and reduce the minimum registered capital of limited liability companies and joint stock companies respectively. For the RMB 30,000 and RMB 5 million, the threshold for the establishment of the company has been greatly reduced, and the investment enthusiasm of social capital has been encouraged.
However, from now on, although the company law reform at that time should be considered successful, it still retains many provisions for government regulation and suppression of corporate shareholder autonomy. For China without a corporate law tradition, the choice of value for safety and efficiency. Legislation generally tends to sacrifice efficiency at a safe level. Although the revised company's capital registration system in 2005 has made significant progress compared to the previous ones, the threshold is still too high to adapt to the current changes in the Chinese economy and the entrepreneurial environment, especially the growth requirements of small and micro enterprises and innovative enterprises. Whether it is a limited liability company of 30,000 yuan or a one-person company of 100,000 yuan, setting the capital limit not only does not have any value and significance in terms of security, but more importantly, it creates the most for the development of small and innovative enterprises in all countries. In the case of a good institutional environment, an excessively high threshold has in fact become an obstacle to entrepreneurship. According to one statistic, the number of companies per thousand people in China is about 12, while in Japan and South Korea, there are more than 50, and most of the emerging markets are around 30. In addition to the big business environment, the company law sets too high a threshold. I am afraid that the number of Chinese companies is far lower than that of Japan and South Korea. As stated by the State Council executive meeting, the threshold for lowering the company's capital, "not only conforms to the eager expectations of the broad market players, but also helps to expand social investment, consolidate the steady development of the economy, and is in line with new technologies, new industries, and new formats. The requirements for the development of emerging productive forces are conducive to building a service-oriented government and reducing micro-intervention to the market. This is a true institutional dividend. After the minimum threshold is lifted, some small enterprises will suffer from false investment and withdrawal of capital. Walk into history.
In addition to major changes in the company's capital system, another major institutional change was the abolition of the company's annual inspection system. Frankly speaking, from the practice of company law for so many years, the company's annual inspection system is basically not necessary. In some places, the annual inspection system is basically a tool for generating income for the industrial and commercial departments and a legal way to toss enterprises. The abolition of the company's annual inspection and the implementation of the company's credit system is a major change in the concept of government regulation, which is conducive to further clarifying the relationship between the government and the company.
Friedman once said: "There is a strong ideological activity behind the Code." The company's legal system, as an important part of a national institutional system, affects to a certain extent the competitiveness of a country, offshore companies such as Cayman. The rise, to a certain extent, is the competitive advantage of an institution. A country that is competitive in the economic and entrepreneurial environment must be a country with a strong competitive advantage in the company's legal system. On this issue, Europe and the United States have given proof of eloquence, and the change of corporate system as a breakthrough point of reform reflects to some extent the management's determination to correct the distorted relationship between the government and the market. For those who are too strong and lose their entrepreneurial enthusiasm, it is undoubtedly a great institutional advancement.
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