The registered capital is also called legal capital, which is the
amount of capital contribution or the total amount of equity subscribed
by all the shareholders or sponsors as stipulated in the articles of
association of a company system, and is registered in accordance with
the law of the company registration authority. If you feel awkward, you
can simply understand the assets that the company has at the very
For example, the registered capital of 10 million yuan, in general,
can be considered that the company was initially set up when the
account has 10 million yuan (patent, land, technology and so on can be
used as capital, this we will say later).
The significance of registered capital to the company
Many people do not understand the use of registered capital when they are registered. It must be wrong to think so.
To some extent, the size of registered capital affects the
willingness and trust of business partners. Everyone is more willing to
cooperate with companies with relatively large registered capital. Why?
The reason is simple. The newly revised Company Law in 2014 has such a
provision that the shareholders of a limited liability company take
responsibility for the company with the limited amount of their
contribution, and the shareholders of the Limited by Share Ltd are
liable to the company by the share of the shares they subscribe. "What
does it mean?" The shareholders of a limited company need to undertake
the limited liability in accordance with the amount of the capital
contribution they have paid and the shareholders of the joint stock
company. That is, the size of the registered capital still determines
the capital strength of the company and the ability to bear civil
liability to the outside world.