Registered Capital Commitments against the Five Year Injection Schedule
Foreign investors must inject subscribed capital within five years under PRC Company Law Article 47 or execute capital reductions to avoid statutory fines
Capital Injection Schedule
Meaning
Official timelines for the contribution of registered capital are defined in the articles of association and recorded by the market registration authorities. Under the 2023 Company Law, the capital injection schedule must ensure that all subscribed capital is fully paid within five years of the company’s establishment. This mandatory window applies to both new entities and existing companies through a transition period.
Timeline Requirement
Shareholders must specify the exact dates and amounts of their future contributions when filing the initial registration documents. The capital injection schedule provides a public commitment that creditors rely on when assessing the financial health of the business. Failure to adhere to the schedule results in administrative penalties and may lead to the forfeiture of shareholder rights.
Compliance Audit
Regulatory bodies monitor the actual cash flows against the registered plan through the National Enterprise Credit Information Publicity System. The capital injection schedule is verified during the annual reporting cycle where the entity must disclose the amount of paid in capital. If the funds do not arrive by the specified date, the market regulator may issue a warning or place the company on a list of entities with abnormal operations.
Companies must maintain the bank advice and the accounting vouchers to prove that each installment of the schedule has been satisfied according to the law.
Statutory Amendment
Modifying the timing of payments requires a formal resolution by the shareholders and an update to the articles of association. Any extension of the capital injection schedule must still fall within the maximum five-year statutory limit unless the company is operating in a specifically exempted sector. The amendment is only effective once it has been approved and updated in the official business registration record.