Capital Reduction in China

Reduction is a creditor-facing process — you cannot shrink the licence number to dodge the five-year clock without the notice steps.

Company Law capital reduction needs a shareholder resolution (typically two-thirds), a balance-sheet/asset inventory, notice to creditors and a public announcement, then SAMR registration. Creditors may require security or repayment. Using reduction to escape unpaid subscribed capital is a high-scrutiny path; SAMR has been tightening ‘reduce to dodge the five-year rule’ stories. This is not a dividend and not an exit. Follow current SAMR forms; this page does not freeze notice periods.

The classification screen

4 questions before you choose the route.

This page identifies the right question and evidence. It does not determine the legal outcome on a reader’s facts.

Why are you reducing?

Real surplus vs dodging contribution.

Why

Creditor list and notice?

Statutory sequence.

Creditors

Resolution majority?

AOA plus Company Law.

Vote

SAMR will they take this story?

Local scrutiny.

Window

Working rule: Company Law capital reduction needs a shareholder resolution (typically two-thirds), a balance-sheet/asset inventory, notice to creditors and a public announcement, then SAMR registration.

What changes the answer

The signal ledger.

These facts move the question beyond a label and into a product, money-flow and control analysis.

Signal

Ask the operating question

Why it changes the route

Silent AOA rewrite

New licence figure, no notice.

Invalid path.

Reduce unpaid capital only

To beat the five-year rule.

Expect questions.

Treat as dividend

Paying shareholders without the reduction process.

Wrong tool.

Prepare before you escalate

Bring a compact evidence docket—not a pitch deck.

Give a compliance team or counsel the operating facts that reveal the perimeter.

01Resolution and AOA draftNew figure.

02Creditor notice packWhat was sent.

03AccountsWhether there is surplus.

Common confusions

Questions people ask before they build.

Short answers for orientation. The right result can change with the service model and current rules.

Can we reduce below paid-in?

The legal and accounting story must match. Do not self-serve a number.

How long is the notice?

Statute plus current SAMR practice. Confirm the current period; do not use a stale blog.

Primary authorities

Reviewed sources support orientation, not a fact-specific assessment.

PRC Company Law (NPC laws database)

SAMR

Gov.cn

National laws database (NPC)