Interpretation of the main points of the latest amendments to the Companies Act 2026

In 2026, China's Company Law underwent significant amendments focusing on optimizing corporate governance structures and effectively protecting shareholder rights.

First, at the corporate governance level, the new law further clarifies the duties of directors, supervisors, and senior management while strengthening the role of the board audit committee.

A well-designed equity structure is the foundation for startup governance stability, balancing control rights, incentives, and future financing needs.

Finally, in terms of corporate compliance, the new law significantly increases penalties for violations and reforms the pre-procedure for shareholder derivative actions.

Building a corporate compliance system requires establishing a compliance management structure, implementing compliance risk assessment mechanisms, and fostering a compliance culture.