The situation: A founder registers a company with a declared capital of one million yuan to look strong to clients, but actually pays in very little. Debts pile up and a lawsuit follows.
Applicable law: The system is 'subscription-based': a shareholder undertakes to pay the subscribed amount within a set period. The subscribed sum is the limit of liability, but he is fully liable to pay it. On insolvency a creditor or liquidator may demand the shareholder accelerate payment of the entire unpaid subscribed capital.
Outcome: The founder was ordered to inject the rest of the subscribed million to repay creditors — the declared capital became a real debt he owed.
🏢 Contracts & trade · Awareness case
'Registered' Capital Is Not 'Paid-Up' Capital · Yalla China
🤝 Governing law: 公司法 / Company Law
If you register a big capital but never pay it in, what do you owe when debts come?
Illustrative, general educational examples — not real specific facts and not legal advice; for awareness only. For an actual situation, consult a licensed lawyer.
🎓 The lesson / takeaway
Lesson: Don't inflate registered capital to look big; every yuan subscribed is a debt that may be called someday. Register a realistic figure you can actually pay.
🕒 Updated: 16 March 2026