Introduction
Unit 2 treats company formation as a two-track process. One track is public law: the company comes into legal existence only after formation registration, and its registered facts are made searchable through the public register. The other track is private ordering: the articles of association translate the founders’ agreement into the company’s internal constitution and continue to structure governance after registration.
The first module is company registration. The central distinction is between constitutive registration and declaratory registration. Formation registration is constitutive because an unregistered “company” has not yet acquired company legal-person status. By contrast, later items such as changes in shareholders or some amendment filings usually publicize an already existing private-law change; they matter greatly for publicity, opposability, proof, and reliance, but the filing itself is not always the source of the underlying right.
The second module is the articles of association. Under the revised Company Law, articles bind the company, shareholders, directors, supervisors, and senior managers. They are also one of the core application documents for registration. Students should therefore read articles in two ways: as a required formation document and as a continuing governance instrument.
The 2023 Company Law, effective 1 July 2024, substantially reorganized this field. It added an independent chapter on company registration, updated registration and publicity rules, required contribution dates in limited liability company articles, added category-share and no-par-value share items for companies limited by shares, and introduced compulsory deregistration for long-dormant companies. The 2025 Company Registration Administration Measures and the 2026 business-entity document standards now turn those statutory changes into day-to-day registration practice.
Key Legal Issues
- Whether a particular filing is constitutive, declaratory, evidentiary, or merely administrative.
- Which facts are registration items, which facts are filing or record items, and which facts are only internal corporate arrangements.
- How the business licence proves legal formation, business identity, and the date of establishment.
- Why the registration authority ordinarily conducts a formal review while applicants bear responsibility for the truthfulness, legality, and validity of submitted materials.
- How false registration, forged signatures, identity misuse, and template filings should be remedied without casually erasing corporate personality or destabilizing third-party reliance.
- How Article 241 compulsory deregistration fits with liquidation, creditor protection, and the continuing responsibility of original shareholders and liquidation obligors.
- Which matters must appear in LLC and company-limited-by-shares articles, and which matters may be customized.
- Where article autonomy ends because of mandatory company-law rules, creditor-protection rules, capital rules, or public-law filing requirements.
- Whether a defective resolution is invalid, revocable, non-established, internally effective but unregistered, or merely a breach of the articles.
- How Chinese articles compare with the UK, Hong Kong, Singapore, Delaware, and German approaches to constitutional documents and public filing.
Hypotheticals
- A promoter signs a long lease before registration, and after incorporation the landlord asks whether the company, the promoter, or both are liable.
- Founders use a template set of articles, but later discover that the registered contribution dates do not match their private investment timetable.
- A shareholder’s signature was forged in formation materials, but the company has operated for years, hired employees, and incurred debts to suppliers.
- A company changes its legal representative internally but never completes registration, and a lender relies on the old registered representative.
- A close company amends its articles by special resolution to require an employee-shareholder to sell shares back on leaving employment.
- A company has been revoked for three years and has not applied for deregistration; a creditor sees a compulsory deregistration announcement on the national enterprise credit information system.
- An investor asks whether a side shareholder agreement can override articles that have been filed with the registration authority.
Conceptual Map
| Theme | Core Question | Main Sources |
|---|---|---|
| Formation registration | When does the company acquire legal-person status? | Company Law arts. 29-33; Market Entity Registration Regulation |
| Publicity and reliance | What can outsiders rely on, and what cannot be asserted against good-faith counterparties? | Company Law arts. 32, 34, 40-41; registration cases |
| False registration | How should forged materials, identity misuse, and registration fraud be corrected? | Company Law art. 39; Company Registration Measures; Zhang Wen; Zhongshan notice |
| Business licence | What legal work does the business licence perform? | Company Law art. 33; Company Registration Measures art. 4 |
| Articles | What must articles contain, and whom do they bind? | Company Law arts. 5, 9, 46, 95, 104 |
| Article autonomy | Which matters may be customized, and which mandatory rules cannot be contracted around? | Guiding Case No. 96; Wan Jiayu; article-validity readings |
| Compulsory deregistration | How can the register clean up dormant companies while preserving creditor claims? | Company Law art. 241; State Council Order No. 784; SAMR Order No. 105 |
| Comparative formation | How do other systems connect constitutional documents, filing, and legal personality? | UK Companies Act; Hong Kong Companies Ordinance; Delaware DGCL; German GmbHG |
Registration Anchors
| Provision or Instrument | Teaching Point |
|---|---|
| Company Law arts. 29-41 | The revised law creates a standalone chapter on company registration, covering formation, change registration, deregistration, publicity, and facilitation. |
| Company Law art. 30 | Formation applicants submit a registration application, articles, and other documents, and submitted materials must be true, lawful, and valid. |
| Company Law art. 32 | Registered items include name, domicile, registered capital, business scope, legal representative, LLC shareholders, and company-limited-by-shares promoters. |
| Company Law art. 33 | The business licence is issued after lawful formation; its signing date is the company’s establishment date, and electronic licences have equal effect. |
| Company Law art. 34 | Unregistered or unchanged registered items may not be asserted against a good-faith counterparty. |
| Company Law art. 39 | Registration obtained through false registered capital, false materials, or other fraudulent concealment of important facts may be revoked. |
| Company Law art. 40 | Companies must publicize contribution, equity-change, administrative-permit, and other required information, and must keep it true, accurate, and complete. |
| Company Law art. 41 | Registration authorities must optimize workflow, improve efficiency, use information technology, and publicize registered items and articles. |
| Company Law art. 241 | If a company has been revoked, ordered closed, or cancelled and fails to apply for deregistration after three years, the authority may begin compulsory deregistration after public notice. |
| Company Registration Measures 2025 | Applicants bear responsibility for submitted materials; the measures add detailed rules on licences, contribution-period transition, publicity, intermediaries, false registration, and refusal or revocation of abusive filings. |
| Business Registration Document Standards 2026 | From 1 May 2026, registration authorities use the new national document and materials standards, including contribution-term collection, real-name confirmation, migration procedures, and agent information. |
The main classroom move is to separate formation from later publicity. Registration creates the company at the formation stage. Later, registration often allocates risks between insiders and outsiders. An unregistered internal change may still matter among the parties, but it may fail against a good-faith counterparty who relied on the public record.
Articles Anchors
| Provision | Teaching Point |
|---|---|
| Company Law art. 5 | Articles bind the company, shareholders, directors, supervisors, and senior managers. |
| Company Law art. 9 | Business scope is stated in the articles, and changes to business scope require amendment of the articles when necessary. |
| Company Law art. 45 | LLC shareholders jointly formulate the articles when establishing the company. |
| Company Law art. 46 | LLC articles must state name, domicile, business scope, registered capital, shareholder names, contribution amount, method and date, organs, legal-representative mechanism, and other matters the shareholders’ meeting considers necessary. |
| Company Law art. 66 | Amendment of LLC articles requires a special resolution passed by shareholders representing at least two thirds of voting rights. |
| Company Law art. 95 | Company-limited-by-shares articles must include formation method, share total, par or no-par-value arrangements, registered capital, category-share rights, promoter information, board and supervisory arrangements, profit distribution, dissolution and liquidation, notices, and other required matters. |
| Company Law art. 104 | The company must keep articles, shareholder register, meeting minutes, board and supervisory minutes, and financial reports at the company. |
Three theories help organize the doctrinal debate. The contractual theory emphasizes founder consent and the statutory contract among members. The constitutional or autonomous-law theory emphasizes the articles as the company’s internal constitution, binding through organizational law and majority decision. The mixed theory is often most useful in class: initial articles have a strong consent dimension, while later amendments work through the company’s statutory amendment procedure and majority rule, subject to mandatory law and abuse-control doctrines.
Legislation
Begin with the Company Law’s registration chapter. Articles 29-41 explain how a company comes into public legal existence, what must be registered, what must be publicized, how changes are handled, and why unregistered changes cannot be used against good-faith counterparties. Article 33 makes the business licence central: the licence date is the establishment date, and electronic and paper licences have equal legal effect.
Use the Market Entity Registration Regulation and its implementing rules for the wider market-entity framework. These materials are important because the company is only one type of market entity, and the same registration platform also handles partnerships, sole proprietorship enterprises, branches, individual industrial and commercial households, and other registered actors.
Use the 2025 Company Registration Administration Measures as the current operational text for company registration. It confirms that applicants are responsible for the authenticity, legality, and validity of submitted materials; specifies business-licence contents; implements the five-year LLC contribution period; requires public disclosure of contribution information within 20 working days; addresses registration liaison officers and intermediaries; and permits refusal or revocation of filings that facilitate debt evasion, malicious asset transfers, or public-interest harm.
Use the State Council registered-capital provisions and the Company Registration Measures together. The State Council provisions supply the transition framework for existing companies. The SAMR measures explain how registration authorities evaluate abnormal contribution periods and abnormal capital figures, including old companies with very long contribution periods or extremely large registered capital.
Use Article 241 and the 2025 Compulsory Deregistration Measures for company exit. The Company Law and State Council provisions use a public-notice mechanism for companies that have been revoked, ordered closed, or cancelled for three years without applying for deregistration. SAMR Order No. 105 implements the process with a 90-day announcement, an objection mechanism for departments, creditors, and other interested parties, a restoration mechanism in limited circumstances, and the key rule that original shareholders and liquidation obligors remain responsible.
Use the 2026 business-entity document and submission standards for current practice. From 1 May 2026, registration authorities use the new national forms and materials lists. The update is significant because it adds contribution-term collection, supplements materials for shareholder-right-loss and loss-covering capital reduction filings, strengthens real-name confirmation, improves migration filings, and requires clearer identification of agents and intermediaries.
For articles, use Company Law Articles 5, 9, 46, 95, and 104 as anchors. Limited liability company articles now must include each shareholder’s contribution date. Company-limited-by-shares articles must deal with category shares and par or no-par-value arrangements where relevant. Listed companies should also use the current CSRC listed-company articles guidelines, while remembering that securities-law and exchange rules do not replace the Company Law baseline.
For business scope, use Company Law Article 9, Civil Code Article 505, the Contract Book Interpretation, and the negative-list materials. Students should not collapse business scope, capacity, internal authority, and legal-representative authority into one concept. Business scope is stated in the articles and registered publicly, but the consequences of exceeding it depend on contract law, approval requirements, counterparty knowledge, and mandatory public-law limits.
Cases
Wan Jiayu is the best starting point for the internal and external effects of article amendments. The case treats the shareholder consensus behind amended articles as internally effective even before registration, while registration performs the publicity function and matters for good-faith third-party reliance.
Guiding Case No. 96, Song Wenjun v. Xi’an Dahua Catering, supplies the leading “people leave, shares stay” example. The Supreme People’s Court approved an initial-articles arrangement in a restructured company that linked employee status, transfer limits, and reasonable repurchase, because the clause reflected all-shareholder consent and did not violate mandatory law. Use it to ask why initial articles may be easier to justify than a later majority amendment that strips an existing shareholder’s rights.
Zhang Wen v. Qixia Administrative Approval Bureau and Shanghai Aijiu show the remedial side of defective registration. Zhang Wen emphasizes targeted correction of misused identity information rather than overbroad denial of corporate personality. Shanghai Aijiu shows judicial caution toward belated attacks on formation documents after the company has operated and insiders have relied on those documents.
The Zhongshan Changjin false-registration notice gives a current administrative example. The market regulation authority’s June 2026 hearing notice states that the company allegedly submitted formation documents containing false identity information and signatures for the shareholder and legal representative, including the application, articles, appointment documents, lease, and domicile materials. It is a hearing notice rather than a final judicial judgment, so it should be used to illustrate registration-authority practice and due process, not as a final adjudication.
The director-qualification case and Guiding Case No. 10 help students classify defective resolutions. A resolution that violates mandatory law may be invalid; a resolution that violates meeting procedure, voting method, or the articles is often revocable within the statutory challenge period; and some defects may mean no resolution was ever established. That classification prevents every article breach from becoming automatic invalidity.
The legal-representative registration cases connect Unit 2 to Unit 5. They show how internal removal, nominee arrangements, expungement, and public registration interact when a person remains on the register after losing any real role in the company. These cases are especially useful after Article 10 of the revised Company Law, which connects the legal representative to directors or managers who execute company affairs on behalf of the company.
The Merchants Bank/Zebon guarantee case and related ultra vires materials belong here because articles often allocate approval authority for external guarantees. The teaching point is not simply that a legal representative signed a document. Students must ask whether the articles or law required organ approval, whether the counterparty made a reasonable review, and whether the matter is governed by company law, contract law, or both.
The Raffles Hotel v. Malayan Banking comparative material shows the long-running common-law debate over whether articles are only a statutory contract among members or also a constitutional document that structures company organs. It is useful beside the Chinese debate among contractual theory, autonomous-law theory, and mixed theory.
Comparative Materials
Comparative law helps students separate three questions that often blur together: what document creates or evidences the company, what document governs internal relations, and what information must be public.
In the United Kingdom, incorporation is handled through Companies House. The Companies Act 2006 keeps the memorandum as a formation document but makes the articles the central continuing constitutional document. The certificate of incorporation performs strong public-proof work. The UK also has administrative strike-off and restoration mechanisms that are useful comparators for China’s compulsory deregistration system.
Hong Kong and Singapore are close common-law comparators because both systems emphasize incorporation filings, public registers, and articles or constitutions as internal governance documents. Their modern statutes have also simplified older memorandum-and-articles structures, so students should treat “two-document model” as a historical common-law starting point, not as a universal current rule.
Delaware separates the public certificate of incorporation from bylaws. The certificate is filed with the Secretary of State and contains charter-level matters; bylaws usually regulate more detailed internal procedure. Delaware is therefore a strong comparator for the division between publicly filed constitutional terms and flexible internal governance design.
Germany illustrates a civil-law formation model. A GmbH comes into existence as a limited liability company only upon registration in the commercial register, and the articles have a formal role in formation. This is a useful comparison for China’s constitutive registration model, although German doctrine has its own rules for the pre-registration company.
Across systems, one trend is convergence toward easier incorporation, searchable registers, electronic filing, and greater article or bylaw customization. The countertrend is stricter anti-fraud, beneficial ownership, capital, disclosure, and deregistration control. Unit 2 sits exactly at that point of tension.
Readings
Use the readings in five clusters. The first cluster covers the revised Company Law, the company-registration measures, the 2026 document standards, and practical registration compliance. These materials help students see how formation rules become administrative workflows.
The second cluster covers defective registration. Read the materials on formal review, false documents, registration revocation, and civil liability with Zhang Wen and the Zhongshan notice. The key question is whether the law should favor speed and reliance, deeper authenticity review, or stronger after-the-fact correction.
The third cluster covers articles. Pair the Chinese scholarship on mandatory rules, optional article clauses, and the nature of articles with Guiding Case No. 96 and Wan Jiayu. Students should ask which clauses are merely private bargains, which are organizational rules, and which cannot bind because they violate mandatory law.
The fourth cluster covers business scope, legal representatives, and ultra vires acts. Use Wolff’s comparative work, the Contract Book Interpretation, and the Chinese scholarship on representative overreach to separate company capacity, internal authority, apparent authority, and counterparty review.
The fifth cluster covers capital registration, foreign-invested company formation, and negative-list controls. Formation problems involving foreign investors often require three separate analyses: company-law formation, market-entity registration, and foreign-investment access or reporting rules.
For first preparation, students should read the Company Law registration chapter, Articles 5, 46, and 95, the Company Registration Measures, Guiding Case No. 96, Wan Jiayu, Zhang Wen, and one comparative statute such as the UK Companies Act or the Delaware General Corporation Law.
Core Statutory Index
| Topic | Core Source |
|---|---|
| Company registration chapter | Company Law arts. 29-41 |
| Formation application files | Company Law art. 30 |
| Registration items | Company Law art. 32 |
| Business licence and establishment date | Company Law art. 33 |
| Good-faith counterparty protection | Company Law art. 34 |
| False registration revocation | Company Law art. 39 |
| Information publicity | Company Law arts. 40-41 |
| Articles binding force | Company Law art. 5 |
| Business scope in articles | Company Law art. 9; Civil Code art. 505 |
| LLC articles | Company Law arts. 45-46 |
| LLC amendment voting | Company Law art. 66 |
| Company-limited-by-shares articles | Company Law art. 95 |
| Document custody | Company Law art. 104 |
| Compulsory deregistration | Company Law art. 241; State Council Order No. 784; SAMR Order No. 105 |
| Registration forms and materials | SAMR Notice Guo Shi Jian Zhu Fa [2026] No. 5 |
| Registration archives | Market-Entity Registration Archives Measures |
Teaching Notes
Teach the unit as one sequence: formation registration creates the company, the business licence evidences that creation, public registration allocates reliance risks, and the articles then organize the company’s internal life.
The constitutive-declaratory distinction should be made early. Students often assume every registration entry creates the underlying right. That is too simple. Formation registration creates corporate legal-person status, while later registration may instead publicize, prove, or make an already effective change opposable to outsiders.
Use template articles as a practical warning. Templates are useful starting points, but the revised law makes contribution dates, legal-representative mechanisms, organ design, category shares, and exit arrangements too important to leave on autopilot.
Emphasize the time points. The revised Company Law has applied since 1 July 2024. The Company Registration Measures have applied since 10 February 2025. The Compulsory Deregistration Measures apply from 10 October 2025. The 2026 document and materials standards are used by registration authorities from 1 May 2026.
Keep legal-representative authority and ultra vires guarantees introductory here. They are registered and article-based issues, but the deeper fiduciary, organ-power, and controller-duty questions belong in later units.