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Forms of Business Structure Guide

2. Limited liability company

A limited liability company may be set up by between one and 50 shareholders. The words “limited liability company” or “limited company” must be included in the company name. A limited liability company’s constitutional documents are its articles of association. A minimum capital of 30,000 RMB is required for the establishment of a limited liability company. Capital contributions may be made in the form of cash and of non-currency assets that can be appraised and denominated in currency and are legally transferable such as in-kind contributions, industrial property or land use rights.

A limited liability company is liable for its debts to the extent of its assets, while the liability of its shareholders is limited to the amount of their respective capital contributions.

The highest decision-making authority in a limited liability company is vested in the shareholders’ meeting. A limited liability company may choose to establish a board of directors and a supervisory committee.