On The Value Of A System Of Limited Liability Companies In China

On Jan.1, 2006, China began to implement the newly-revised Corporations Law.With inspecting the legislation of one-member company in other countries and areas,we establish the regulations of one-member company on the basis of the actualsituation of economic development in China. In order to prevent one-membercompany abusing limited liabitilty, we stipulate that one-member company shouldabide by the statutory capital system, carry out relatively strict supervision onone-member company by making registration, demonstrating to the public, recordingin written form and regulating that one natural person should only establish onecompany of this kind, and introduce the theory of"disregard of corporate personality". We adopt these measures to protect thelimited liability of the company and make one-member company to developvigorously. Still, the legislation of one-member company should also make progressin the aspects of capital system, financial supervision, administration structures,legislation techniques and etc.