On July 1, 2024, the State Council issued the Provisions of the State Council on Implementing the Registration Management System for Registered Capital under the Company Law of the People's Republic of China (hereinafter referred to as the "Provisions"), which shall come into force on the date of issuance. The Provisions consist of 13 articles, as follows.

First, the Provisions have clarified the transitional period arrangement for adjusting the subscribed capital period of existing companies. For companies registered and established before June 30, 2024, if the remaining subscribed capital period of limited liability companies exceeds five years from July 1, 2027, they shall adjust their remaining subscribed capital period to within five years before June 30, 2027, and record it in the company's articles of association. Shareholders shall pay their subscribed capital in full within the adjusted subscription period. The initiators of joint stock companies shall pay the full amount of their subscribed shares before June 30, 2027. If the production and operation of the company involve national interests or major public interests, and the relevant competent department of the State Council or the provincial people's government proposes an opinion, the State Administration for Market Regulation may agree to allow the company to contribute capital according to the original subscription period.

Second, the Provisions have stipulated measures on the handling of abnormal capital contributions by companies. If there are significantly abnormal activities in a company's capital contribution period and registered capital, the company registration authority may make a judgment based on the company's business scope, operating status, shareholders' financial capacity, main projects, and asset scale. If the authority affirms that the company violates the principles of authenticity and reasonableness, it may require the company to adjust them in a timely manner according to law.

Third, the Provisions have refined the supervision measures. When a company adjusts the amount, method and term of capital contribution subscribed and paid by its shareholders, or the number of shares subscribed by its initiators, it shall disclose to the public in accordance with the law. The company registration authority may conduct supervision and inspection over the company's announced subscription and paid-in capital, and implement classified regulation based on companies' credit risk status. Companies that fail to adjust their capital contribution period and registered capital in accordance with regulations shall be requested to make corrections by the company registration authority. For those who have failed to make corrections within the prescribed period, the company registration authority shall make special annotations and publicly disclose them in the National Enterprise Credit Information Publicity System.

In addition, the Provisions require that the company registration authority should strengthen guidance on adjusting the capital contribution period and registered capital of the companies, develop specific operational guidelines, optimize the processing procedures, and improve the level of registration convenience.