What is Paid Up Capital in a Chinese Company?
What: Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock.
Why: Understanding the differences between paid-up capital and registered capital is an important step in your research and due diligence process.
Paid-up capital is the amount of money a company has received from shareholders in exchange for stock shares. A company realizes paid-up capital when it sells its shares on a primary market or stock exchange directly to investors. If shares are bought and sold among investors on the secondary market, no additional paid-up capital is created as proceeds in those transactions go to the selling shareholders, not the issuing company.
Paid-up capital is distinct from a company’s registered capital. Note that as recently as 2014, regulators amended the laws governing the paid-up capital system in an attempt to simplify the company registration system for companies in Mainland China.
Questions? We can help. At Nuna Network we offer a variety of valuable guides, tips, and other practical information to help you navigate the sometimes complex landscape with Chinese businesses. We remain the partner of choice for small- and medium-sized businesses seeking guidance in researching, developing, and launching relationships with companies in China. We are your go-to resource for valuable information in navigating the sometimes complex landscape of business operations in China.
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