A registered company’s knowledge point may not always be correct

A single-shareholder company’s sole shareholder bears joint and several liability for the company’s debts (in substance, unlimited liability).

When registering a company with only one shareholder, that shareholder is responsible for all of the company’s debts. Therefore, you should always have at least one other person hold shares—even just 1%. It’s best to have your parents hold that 1%. A spouse cannot be used as the second shareholder (they are treated as a single person in this context).

This is why many companies have two shareholders: one holding 99% and the other holding 1%. New Oriental’s top-level company follows the same 99%/1% structure.

This content comes from someone who claims to be a lawyer.