China to amend Company Law to relax requirements on listing candidates

SHANGHAI (AFX-ASIA) - China will amend the Company Law to reduce the requirements on companies seeking stock market listings, an official from the State Economic and Trade Commission's enterprise reform department said, according to the China Daily.

	    The official said the amendments will allow companies which have earned net profits during any three years since their establishment to qualify for a listing.

	    The law currently requires companies to earn a net profit for three consecutive years before listing.

	    This change will give a large number of growth enterprises a chance to list, the official said.

	    The amendments will also relax requirements on companies in general, reducing a company's required registered capital to 100,000 yuan from 300,000 yuan, and moving from a "paid-up capital system" for the establishment of new companies to an "authorised capital system."

	    This will mean that companies need only 30-40 pct of their authorised capital to have entered their bank accounts before they can qualify for an operating licence.

	    The amendments will also allow for greater incentive systems for company employees, allowing the issue of shares or share options to staff.

	    They will also reduce restrictions on corporate restructures, for example, lifting a ban on the establishment of wholly-owned subsidiaries, and shortening the time it takes for companies to be split and merged, and for companies to repurchase their shares.

	    Under the current law, splits, mergers and repurchases require 90 days.

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