Xinnuo Legal Article | Prevention of Criminal Legal Risks after the Implementation of the New Company Law

Prevention of Criminal Legal Risks after the Implementation of the New Company Law

On December 29, 2023, the revised and passed Company Law of the People's Republic of China will come into effect on July 1, 2024. After the implementation of the new Company Law, companies should mainly avoid the occurrence of criminal legal risks in the following aspects:

1. Falsely reporting registered capital crime: The new Company Law has stricter requirements for registered capital. If a company falsely reports its registered capital or submits false materials, it may violate this crime.

2. False capital contribution and embezzlement crime: This refers to the act of a company's initiators or shareholders violating the provisions of the Company Law by making false capital contributions without delivering currency, physical goods, or transferring property rights, or withdrawing their capital contributions again after the establishment of the company, with huge amounts, serious consequences, or other serious circumstances.

3. Illegal absorption of public deposits and fundraising fraud: This refers to the act of violating national financial management regulations by illegally absorbing public deposits or indirectly absorbing public deposits, disrupting financial order. If the company is suspected of this crime, the responsible personnel may be held criminally liable.

4. Violation of disclosure or non disclosure of important information crime: This refers to a company providing false or concealed financial accounting reports to shareholders and the public. Yan Si is suspected of this crime, and relevant responsible personnel may be held criminally responsible.

5. Crime of obstructing liquidation: This refers to the act of concealing property, making false records on the balance sheet or property inventory, or distributing company or enterprise property before paying off debts during the liquidation of a company or enterprise, which seriously damages the interests of creditors or others. If the company is suspected of this crime, the responsible personnel may be held criminally liable.

The above is only a part of the criminal legal risks that companies may face. In order to prevent these risks, it is recommended that companies strengthen internal management and compliance construction to ensure that their actions comply with legal and regulatory requirements. At the same time, it is recommended that companies seek the help of legal professionals in a timely manner.

For more information, please pay attention to the official account of Beijing Xinnuo (Changchun) Law Firm.