Sometimes, a foreign invested company in China may want to reduce its captial at some stage, for example company owners want to change the scale of their business. Mr.Wang.JIngzhan, a lawyer from Tianjin, China, is now briefing you on the legal requirement when reducing the registered capital.

Firstly, according to the corporate law of China, When a company decides to reduce its capital, it shall be proposed by the board of directors and such decision of reducing capital shall be approved on the meeting of shareholders, getting consent by 2/3 or above shareholders who has the right of voting.

After approval by shareholders’ meeting, the company shall make a sheet of balance and list of its assets.

the company shall notify all its creditors within ten days upon decision of reducing capital, and publicize the same on newspapers within 30 days.

Creditors may require the company to clear its debit or provide security within 30 days upon geting notified, and within 45 days upon publicity.

The company shall have to go through the process of changing the registered capital