What is Paid Up Capital in a Chinese Company?
Paid-up capital is the amount of money a company has received from shareholders in exchange for shares of stock.
Understanding the differences between paid-up capital and registered capital is an important step in your research and due diligence process.
Paid-up capital is the amount of money a company has received from shareholders in exchange for stock shares. A company realizes paid-up capital when it sells its shares on a primary market or stock exchange directly to investors. If shares are bought and sold among investors on the secondary market, no additional paid-up capital is created as proceeds in those transactions go to the selling shareholders, not the issuing company.
Paid-up capital is distinct from a company’s registered capital. Note that as recently as 2014, regulators amended the laws governing the paid-up capital system in an attempt to simplify the company registration system for companies in Mainland China.
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We know verifying Chinese business certificates and licenses is difficult and time-consuming… especially when you don’t know where to start. Nuna Network helps you navigate the complexities of partnering with Chinese companies, providing information on everything you need to know before you do business together.