The third draft of the revised Company law was submitted to the fifth meeting of the Standing Committee of the 14th National People's Congress for deliberation on Monday. The third reading of the draft focuses on further implementing the requirements of equal protection of property rights and strengthening the norms of controlling shareholders and actual controllers.

In order to further implement the requirements of equal protection of property rights, the third reading of the draft further improves the relevant provisions on the protection of the rights of minority shareholders, providing that if the controlling shareholder abuses the rights of shareholders and seriously damages the interests of the company or other shareholders, other shareholders have the right to request the company to purchase their shares at a reasonable price. At the same time, the third review of the draft will improve the provisions for shareholders of joint stock limited companies to consult and copy relevant materials of the company; Add the requirement that the company shall not increase the shareholding ratio of the shareholders of the provisional proposal.

In order to further strengthen the norms for controlling shareholders and actual controllers, the third reading of the draft adds provisions: Where the controlling shareholders and actual controllers do not serve as company directors but actually perform company affairs, the provisions that directors have a duty of loyalty and diligence to the company shall apply.

In order to further improve the subscription registration system and maintain capital adequacy and transaction security, the third reading of the draft adds provisions on the subscription period of shareholders of limited liability companies, and clarifies that the amount of capital subscribed by all shareholders shall be paid in full within five years from the date of establishment of the company in accordance with the provisions of the articles of association.

The third draft also adds provisions: the directly responsible persons and other directly responsible persons who falsely report registered capital, submit false materials or take other fraudulent means to conceal important facts to obtain company registration shall be fined between 10,000 yuan and 50,000 yuan; Penalties for violations of the Accounting Law and the Assets Appraisal Law shall be imposed in accordance with the provisions of the Accounting Law, the Assets Appraisal Law, the CPA Law and other laws and administrative regulations.

It is understood that China's current company law was enacted in 1993, individual provisions were amended in 1999, 2004, 2013, 2018, and a comprehensive revision was made in 2005.

In order to implement the CPC Central Committee's major decisions and arrangements on deepening the reform of state-owned enterprises, optimizing the business environment, strengthening the protection of property rights, and promoting the healthy development of the capital market, the revision of the Company Law was included in the legislative plan of the Standing Committee of the 13th National People's Congress. In December 2021, the draft revision of the Company Law was submitted to the 32nd meeting of the Standing Committee of the 13th National People's Congress for initial deliberation. In December 2022, the draft revision of the Company Law was submitted to the 38th session of the Standing Committee of the 13th National People's Congress for a second review.