Company Law amendment

At a glance

• The Company Law of the People’s Republic of China was revised in December 2023.
• The revised law will come into effect on 1 July 2024.
• It requires that limited liability companies with more than 300 employees have employee representatives among the board members (unless the company has a board of supervisors and there are employee representatives on this), and these employee representatives should be democratically elected.
• It also emphasises the duties of loyalty and diligence of directors, supervisors, and senior managers to the company.
• It also states that if directors and senior managers cause damage to others whist performing their duties, the company must bear the liability for compensation.