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Corporate Service - China

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Q&A Regarding New Company Law of China (44)

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Q: What are the consequences of misreporting the registered capital during company registration?
A: Where a company obtains registration by falsely reporting its registered capital, the company registration authority shall order it to make corrections and impose a fine of not less than 5 percent but not more than 15 percent of the amount of the falsely reporting its registered capital; If the circumstances are serious, the business license shall be revoked; A fine of not less than 30,000 yuan but not more than 300,000 yuan shall be imposed on the persons in charge who are directly responsible and other persons who are directly responsible.

Q: What are the consequences of submitting false materials during company registration?
A: Where a company obtains registration by submitting false materials or concealing important facts by other fraudulent means, the company registration authority shall order it to make corrections and impose a fine of not less than 50,000 yuan but not more than 2,000,000 yuan; If the circumstances are serious, the business license shall be revoked; A fine of not less than 30,000 yuan but not more than 300,000 yuan shall be imposed on the persons in charge who are directly responsible and other persons who are directly responsible.

Q: What are the consequences of the company did not publish information in accordance with relevant regulations?
A: If the company fails to publicize the relevant information in accordance with the relevant regulations or does not publicize the relevant information truthfully, the company registration authority shall order it to make corrections and may impose a fine of more than 10,000 yuan and less than 50,000 yuan. If the circumstances are serious, a fine of not less than 50,000 yuan but not more than 200,000 yuan shall be imposed; A fine of not less than 10,000 yuan but not more than 100,000 yuan shall be imposed on the persons directly in charge and other persons directly responsible.

Q: What are the consequences of false capital contributions by company shareholders?
A: Where the initiators or shareholders of a company make false capital contribution, fail to deliver or fail to deliver the monetary or non-monetary property as capital contribution on time, the company registration authority shall order them to make corrections and may impose a fine of not less than 50,000 yuan but not more than 200,000 yuan; If the circumstances are serious, a fine of not less than 5 percent but not more than 15 percent of the amount of false capital contribution or of the amount not contributed shall be imposed; A fine of not less than 10,000 yuan but not more than 100,000 yuan shall be imposed on the persons directly in charge and other persons directly responsible.

Q: What are the consequences of shareholders' withdrawal of capital contribution after the establishment of the company?
A: Where the initiators or shareholders of a company withdraw their capital contributions after the establishment of the company, the company registration authority shall order them to make corrections and impose a fine of not less than 5 percent but not more than 15 percent of the amount of capital withdrawn; A fine of not less than 30,000 yuan but not more than 300,000 yuan shall be imposed on the persons in charge who are directly responsible and other persons who are directly responsible.

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