Chinese Mainland Ltd. vs WFOE

A company limited by shares (股份有限公司) is a legal entity formed by shareholders who jointly contribute capital, with each shareholder being liable for the company's obligations up to the amount of their capital contribution. Shareholders of a company limited by shares can participate in the ownership and profit distribution of the company by purchasing shares. In mainland China, a company limited by shares is under the system of mixed ownership, whereby the state, collective entities, and individuals jointly own the company. A company limited by shares has one to two hundred promoters, at least half of them domiciled in China. Its board has three or more directors, or a small company or one with few shareholders may have one director, and no director needs to be a mainland resident. A company limited by shares must appoint one legal representative, and it needs a board secretary only if it is listed. There is no general minimum registered capital; promoters pay in full for the shares they subscribe before the company is established, and no minimum cash share applies. Shareholders can make contributions in the form of currency, intangible assets, etc., which must be evaluated. A company limited by shares in mainland China is a legal entity participating in the open market, and can raise funds by issuing shares.