On December 29, 2023, the the People's Republic of China Company Law (hereinafter referred to as the "New Company Law") was revised and adopted at the 7th meeting of the Standing Committee of the 14th National People's Congress, and will come into force on July 1, 2024. According to the statistics of Professor Liu Bin from the Institute of Commercial Law of China University of Political Science and Law, this revision has deleted 16 provisions, added and revised 228 provisions, of which 112 provisions have been substantially revised, which is the largest scale of the Company Law in the past 30 years. A revision. From a legal point of view, the promulgation of the new company law will undoubtedly have a significant impact on the governance rules of tens of millions of companies in China, and many discussions have been seen recently. The author takes another path and puts forward some business opportunities that the new company law may bring for the reference of entrepreneurs and entrepreneurs.

1. ESG (Environmental, Social and Corporate Governance) Evaluation and Industrial Services

The new company law adds provisions (Article 20): When a company engages in business activities, it shall fully consider the interests of the company's employees, consumers and other stakeholders, as well as social and public interests such as ecological and environmental protection, and assume social responsibilities. The State encourages companies to participate in public welfare activities and publish social responsibility reports.

This provision is put forward for the first time from the perspective of legislation: corporate operations should fully consider environmental, social, corporate governance and other responsibilities, and there is a high probability that benchmark enterprises such as central state-owned enterprises, industry leaders, listed companies, etc. will be driven to improve ESG construction and issue social responsibility reports (in fact, some companies have already done it before promulgation), and gradually transmit it to private enterprises, small and medium-sized enterprises, etc. Due to work reasons, the author daily contacts a large number of entrepreneurs and entrepreneur friends in various industries, many of whom are very willing to practice ESG standards and assume corporate social responsibility, but at the practical level, apart from donations, I do not know what to do and how to do it, and need professional institutions to intervene in counseling.

In addition, on the one hand, due to the late start of China's ESG evaluation system, and scattered in various regulations, fragmentation. For example, in 2010, the Ministry of Environmental Protection's Guidelines for Environmental Information Disclosure of Listed Companies (Draft for Comments) regulated the time and scope of information disclosure of annual environmental reports and interim environmental reports by listed companies. In 2018, the CSRC revised the Governance Guidelines for Listed Companies and added a chapter on "Stakeholders, Environmental Protection and Social Responsibility". In July 2022, Shenzhen Stock Exchange launched the ESG evaluation method for national certificates, the ESG benchmark index and ESG leading index of the Shenzhen core index based on this evaluation method are published. On the other hand, internationally, ESG has not yet had a globally uniform definition and disclosure standard. Therefore, for the general trend of ESG landing, in addition to providing a feasible path, it is also necessary to provide evaluation services.

2. Asset Restructuring and Corporate Capital Management Services

The revised provisions of the new company law (article 48): shareholders may make capital contributions in money, or in kind, intellectual property rights, land use rights, equity, creditor's rights and other non-monetary property that can be valued in money and can be transferred according to law.

The current round of amendments to the Company Law, for the first time, clearly defines equity and debt as a form of statutory capital contribution for non-monetary property. Although there was a general provision before the revision that "non-monetary property that can be valued in currency and transferred in accordance with the law can be used as capital contribution", at the practical level, the practice is not completely uniform in various places. After the revision, the legal status of equity and creditor's rights can be used as capital assets, and it is believed that the relevant national judicial and administrative rules can be unified at the operational level, which will also give birth to a number of "equity, creditor's rights" capital contribution of the company. Considering the limitations of the five-year payment period under article 47 of the new company law and its series of consequences, there will be a large number of enterprises that have paid-in demand, but it is neither realistic nor necessary for thousands of companies to pay-in capital in the form of cash. The capital contribution or partial capital contribution at the price of equity and debt can not only revitalize the stock of assets, but also solve the problem of shareholders' paid-in liability, or can become a new type of asset management business. On the other hand, in practice, some equity and creditor's rights assets have been reduced or even become non-performing assets. If they can be reborn through capital injection and compliance restructuring according to law, they can be said to be "well-funded". Of course, in practice, there may still be some "gray demand" whose boundaries are not yet clear through asset contributions as a channel to solve, which is not shown in this article, let alone encouraged.

3. conversion, capital reduction, cancellation and other industrial and commercial agency services.

Amendments to the New Company Law (Article 47): The registered capital of a limited liability company shall be the amount of capital contribution paid by all shareholders registered with the company registration authority. The amount of capital contribution subscribed by all shareholders shall be fully paid by the shareholders within five years from the date of establishment of the company in accordance with the provisions of the articles of association.

The revised provisions of the new company law (Article 252): if the promoters and shareholders of the company make false capital contributions, fail to deliver or fail to deliver the monetary or non monetary property as capital contribution on schedule, the company registration authority shall order them to make corrections and may impose a fine of not less than 50000 yuan but not more than 200000 yuan; if the circumstances are serious, they shall be fined not less than 5% but not more than 15% yuan for the amount of false capital contribution or the unpaid amount of capital contribution; A fine of not less than 10,000 yuan but not more than 100,000 yuan shall be imposed on the person-in-charge and other persons directly responsible.

In 2014, the Company Law started the trend of subscription system. A large number of "zombie companies" with large registered capital have been generated in the market. There are even 1-2 natural persons whose shareholders are but whose registered capital is as high as 30000000000.00 yuan (not counting, it is 0.3 billion, specially written for you to feel the degree of exaggeration). Investors obviously do not have the possibility of actual payment, which is ironic. With the expiration of the transition period for the entry into force of the new company law, all companies must move closer to the paid-in capital within 5 years. Otherwise, in addition to legal risks, they may also face administrative penalties of real money. It is conceivable that there will be a large number of companies within the period. Market demand for company transfer, capital reduction, and even cancellation. However, a series of problems such as tax, debt and procedures need to be solved in the process of capital reduction and cancellation. Some companies do not have the ability to handle them by themselves and can only entrust agency companies to handle them. Although the unit price of customers is not high (according to the author's understanding, the service fee price of capital reduction agency for small and micro companies in Beijing market is generally around 1,000 yuan), based on the huge base of tens of millions of companies nationwide, even 5% of companies, the overall market is also impressive.

In addition to the above three points, the first major demand brought about by the revision of the law is often the demand for legal services. The comprehensive adjustment and optimization of the new company law for the legislative and judicial concepts, corporate governance structure, company management requirements, the rights and obligations of directors and supervisors, etc., will undoubtedly cause some companies that ignore or lag behind the requirements of the new law to produce a large number of litigation and arbitration disputes, and poor handling may bring significant economic losses. Companies that respond quickly and are flexible will generate a large number of non-litigation needs such as legal counsel and training. However, in view of the special nature of the lawyer's profession, it is not appropriate to simply regard the relevant needs as "business opportunities". What lawyers can do is to constantly improve their profession, improve their position, safeguard the legitimate rights and interests of the enterprises concerned, safeguard the correct implementation of the law, and safeguard social fairness and justice in accordance with the requirements of the lawyer Law. Realize the organic unity of political attributes, market attributes, public welfare attributes and social attributes.

Lawyer Presentation

Arbor Lawyer

Member of the Communist Party of China, undergraduate majoring in law at China University of Political Science and Law, and postgraduate majoring in finance at Renmin University of China. He is currently a member of the Party Branch of Beijing Huixiang Law Firm, the director of the Young Lawyers Working Committee, and the director of the Digital Economy and Compliance Management Legal Professional Committee. He has successively served as a selected student of the municipal Party committee of a municipality directly under the central government, a civil servant of judicial organs, a legal director of film and television culture group, and a legal director of financial state-owned enterprises. In addition, Mr. Qiao Mu also served as a practice tutor of China University of political science and law, an off campus tutor of Beijing Foreign Studies University Law School, an expert member of the lawyer expert database of the rule of law daily, deputy director of the external liaison office of the rights and interests Office of China Association of small and medium-sized commercial enterprises, member of the science and Technology and Digital Economy Committee of Beijing Chaoyang Law Association, and executive director of Beijing Liaoning enterprise chamber of Commerce, It has the qualification of state-owned enterprises; securities, funds, futures, accounting and other qualifications. Many times to accept the rule of law daily, Beijing News, entertainment capital and other media interviews to express their views.

Areas of Expertise:

Commercial litigation and consulting, digital economy and compliance management, major civil and criminal cases, etc;

Typical performance:

He has provided high-quality litigation and non-litigation legal services to nearly 100 enterprises and institutions and high net worth individuals such as Chinese Film and Television, Huachuang Animation, Qingshan Yi Media, Dust Planet, Big Peach Culture, Xinghe Power Technology, Atworth Technology, Hengmeng Technology, Longzang Digital Technology, Anjia Wenchuang, Mingfa Youth, Zhongcai Huibang Fund, Weiguang Dingchuang Fund, Measurement Fund, etc; specific areas include, but are not limited to, litigation and arbitration, digital economy, cultural media, intellectual property, financial securities, private equity, real estate, financial leasing and factoring, government and corporate consultants.