In China (中国), a single founder has two main legal forms: register an individual business (个体工商户) under the State Council's Regulations on Promoting the Development of Individual Businesses (State Council Order No. 755), or set up a limited liability company with a single shareholder under the Company Law as revised on 29 December 2023 (中华人民共和国公司法, NPC). The company route is the only one of the two that offers limited liability — and even that protection has an exception you need to plan for.
Who can use each route
A limited liability company in China is formed by "one or more but fewer than fifty" shareholders (《公司法》第四十二条), so a single person is enough. An individual business may be operated by an individual or by a family (《促进个体工商户发展条例》第六条).
For non-mainland founders, the regulation we verified addresses one group only: Chinese citizens who are permanent residents of Hong Kong or Macao, and residents of Taiwan, may apply to register as individual businesses under relevant national rules (《促进个体工商户发展条例》第三十七条). We found no official text on eligibility for other foreign individuals, so this page does not state one.
Liability: the rule that decides most cases
For the company, the default rule is limited liability: shareholders of a limited liability company are liable to the extent of their subscribed capital (《公司法》第四条).
The exception sits in Article 23, paragraph 3: where a company has only one shareholder and that shareholder cannot prove the company's property is independent of their own, the shareholder bears joint liability for the company's debts. In practice this is a documentation question, not a registration question — keeping company money, accounts and records separable from your personal ones is what the rule turns on.
For individual businesses, the official sources verified for this page do not state the debt-liability rule, so we do not give one here.
Capital: how much, and by when
The revised Company Law requires that the total subscribed capital contributions of all shareholders be paid in full within five years of the company's establishment, as provided in the articles of association (《公司法》第四十七条). The revised law took effect on 1 July 2024 (《公司法》第二百六十六条); it was adopted at the 7th session of the 14th NPC Standing Committee on 29 December 2023.
No equivalent capital requirement for individual businesses appears in the regulation.
Running a one-person company without a board or meetings
The 2023 revision removes most of the corporate machinery that used to make a solo company awkward to run:
- No shareholders' meeting. A single-shareholder LLC does not have one; the shareholder's decisions on the matters listed in the preceding article must be in writing, signed or sealed by the shareholder, and kept at the company (《公司法》第六十条).
- One director is enough. A small LLC or one with few shareholders may have a single director instead of a board, exercising the board's functions; that director may also serve as the manager (《公司法》第七十五条).
- Supervisor optional. Such a company may have one supervisor instead of a board of supervisors, or none at all if all shareholders agree unanimously (《公司法》第八十三条).
Annual financial reporting
Every company must prepare a financial and accounting report at the end of each fiscal year, audited by an accounting firm in accordance with the law (《公司法》第二百零八条). This is a general rule in the Company Law, not a one-person-company rule.
Worth stating plainly, because older guides still repeat it: the 2023 revision no longer contains a separate "one-person limited liability company" section, and we found no one-person-specific annual audit requirement in the NPC text. The Article 208 obligation above is what we could verify.
What the State Council regulation says about individual businesses
The Regulations on Promoting the Development of Individual Businesses (促进个体工商户发展条例) was adopted at the 190th executive meeting of the State Council on 26 September 2022 and took effect on 1 November 2022. Beyond the points above, the provision most relevant to growing founders is Article 13: an individual business may voluntarily change its operator or convert into an enterprise (《促进个体工商户发展条例》第十三条). That is the written route from the individual business form into a company form.
Side-by-side, on what is verified
| One-shareholder LLC (China) | Individual business (个体工商户, China) | |
|---|---|---|
| Governing text | Company Law, revised 2023-12-29, effective 2024-07-01 | State Council Order No. 755, effective 2022-11-01 |
| Owners allowed | One to fifty shareholders | An individual, or a family |
| Liability | Limited to subscribed capital; joint liability if company property cannot be shown to be independent (Art. 23(3)) | Not stated in the official sources verified here |
| Capital | Subscribed capital payable in full within five years of establishment | No equivalent requirement in the regulation |
| Internal governance | No shareholders' meeting; one director and no supervisor are possible for small companies | Not addressed in the provisions verified |
| Annual reporting | Financial and accounting report each fiscal year, audited by an accounting firm (Art. 208) | Not addressed in the provisions verified |
| Changing form | — | May voluntarily change operator or convert into an enterprise (Art. 13) |
What this page does not cover
Three things readers usually expect are missing here on purpose, because we could not verify them against official pages: the debt-liability rule for individual businesses, the tax treatment of either form, and eligibility for foreign individuals other than the Hong Kong, Macao and Taiwan provision in Article 37. Treat those as open questions to check with the relevant Chinese authorities rather than as settled answers.