Why they matter more than they look
SAMR keeps a company’s articles on file, and banks, courts and counterparties rely on them. If an internal shareholders’ agreement conflicts with the filed articles, the articles usually win against third parties. Anything that matters to the investor should be in the articles themselves.
What a limited liability company’s articles must contain
Article 46 of the 2024 Company Law requires:
- the company’s name and domicile
- its business scope
- its registered capital
- each shareholder’s name, the amount and form of their capital contribution, and the contribution dates
- the governance bodies, how they’re formed, their powers and their procedures
- who the legal representative is, and how that person is appointed and replaced
- any other matters the shareholders consider necessary
Contribution dates have to fit the five-year rule; see our guide to minimum registered capital.
Governance choices under the 2024 Company Law
| Body | Options |
|---|---|
| Shareholders | The shareholders’ meeting. For a single-shareholder company, written shareholder decisions |
| Board | A board of directors, or a single director for a small company |
| Supervision | A board of supervisors, a single supervisor, an audit committee of the board instead, or none for a small company if all shareholders agree |
| Legal representative | A director or manager who executes company affairs |
| Employee representation | A company with 300 or more employees must have an employee director, unless it has a board of supervisors with employee members |
Most WFOEs choose the simplest set-up that’s allowed: a single director, a single supervisor (or none) and a general manager. The articles should still say how each is appointed and removed, so the parent can act quickly if it needs to.
Clauses foreign investors should get right
- Reserved matters: decisions that need the shareholder’s approval, such as budgets, borrowing, guarantees, related-party contracts and changes to capital.
- Removal of the legal representative: a clear procedure, and a duty to hand over the company chops, licence and bank keys.
- Custody of the company chops and who may use them.
- Joint ventures: voting thresholds, deadlock, transfer restrictions and exit. Under the Foreign Investment Law, JV parties can no longer rely on the old JV-law veto rights and have to write them in. See joint ventures.
- Dividends: when profits are distributed and in what proportion.
Foreign-invested companies and the transition
The Foreign Investment Law gave companies set up under the old JV and WFOE laws until 31 December 2024 to adjust their organisational form and articles to the Company Law. Companies that didn’t adjust may find SAMR refuses later filings until they do.
Our Company Law compliance review checks existing articles against the 2024 rules and the 2027 capital deadline.