On January 27, 2011 the Supreme People’s Court of the People’s Republic of China promulgated the Interpretation of Some Issues regarding the Application of the PRC Company Law (Judicial Interpretation III), which became effective on February 16, 2011. The Judicial Interpretation III provides guidelines to people’s courts in the trial of disputes arising from company establishment, capital contribution and equity interest confirmation in order that the PRC Company Law could be correctly applied.
The main contents of Judicial Interpretation III are as follows:
1, the subject of liability before company establishment;
2, the standards for typical non-currency capital contribution and relevant remedies;
3, the effectiveness of using non-owned assets as capital contribution;
4, the recognition of nonperforming capital contribution obligation and capital contribution withdrawal, remedies and civil liabilities;
5, the conditions and methods to restrict shareholder’s rights;
6, to balance the interests among nominee shareholder, actual shareholder and creditor.