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Up to 270 sole proprietorships have been registered since the new Company Law came into effect on January 1, according to He Qingcai, director of the Register Office of the Beijing Municipal Administration of Industry and Commerce, at a press conference yesterday.

Among these, 252 are limited companies registered by natural persons; the other 18 companies by other legal entities.

The new Company Law for the first time affirms the legal status of sole proprietorships or the one-man company. It allows one natural person or one artificial person to set up a limited company. Minimum registered capital is 100,000 yuan (about US$12,422.36).

Previously, the law required companies to be registered in the names of at least two natural persons, or one natural person and one artificial person, or two artificial persons.

Further, liability was not limited to the amount of registered capital. In bankruptcy cases, this resulted in the seizure of personal assets, including family property, to clear debts.

Commenting on the large number of registrations in the space of one month, He said that one-man companies have their own advantages. They not only avoid problems such as shareholder bickering and debt disputes, but also tend to have more flexible management styles and systems. 

(China.org.cn by Li Xiaohua, February 7, 2006)