China Releases Draft Revisions to PRC Company Law

On 24 December 2021, draft revisions to the PRC Company Law (“Draft Revisions”) were released for public comments. The proposed revisions touch on the corporate governance, potential legal liability faced by directors, supervisors, senior officers and shareholders, processes for liquidation and deregistration, and numerous other aspects of potentially every kind of PRC company (including foreign-invested ones). Although several of the revisions represent only a high-level codification of already existing judicial rules or practices and administrative regulations, others could, if and when passed substantially as currently drafted, result in changes to how companies in China are run. The key revisions proposed for limited liability companies (the corporate form for most foreign investment) are summarized below.