Chinese lawmakers are mulling a draft revision to the country's Company Law to improve the corporate system, with rules for greater responsibility for shareholders and better corporate governance.
The draft revision was submitted on Tuesday to the ongoing session of the Standing Committee of the National People's Congress (NPC), the top legislature, for a second reading.
Compared with a draft revision submitted for deliberation in December 2021, the new draft strengthened the responsibility of shareholders in capital contribution when the company is unable to repay debts due and in other cases.
Workers at a science and technology company in Nanjing, east China's Jiangsu Province, September 16, 2022. /Xinhua
It further improves rules on the organizational structure of companies, including listed companies, to enhance corporate governance.
"Improving the modern corporate system with distinctive Chinese features and encouraging entrepreneurship" is added to stipulations on the legislative purpose, according to the new draft.
Adopted in 1993, China's Company Law has been amended several times. The current version was enacted after an amendment concerning the capital system of companies in 2018.