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The full name of the limited company later on was called "Lianhua Film Production and Processing Company, Ltd." Lianhua was formally registered in March 1930 in Hong Kong by Luo Mingyou (Law Ming-yau) and his partner, director Li Minwei (Lai Man-Wai).

Luo's plan was to build studios in Beijing, Shanghai and Hong Kong, to open a school to give up to date training for both technicians and actors, and to integrate the management of all these elements into a vertical organization on the Hollywood model.

That same year the Bright Moonlight Song and Dance Troupe, founded by Li Jinhui, would integrate with the film company.

Among the company's leading stars were the actresses Wang Renmei, Li Lili, and Chen Yen-yen, who appeared in many box office successes.

Like its competition, Lianhua employed directors who were part of the leftist film movement, and while in existence, produced and premiered many of the most significant films of the period; these included: Lianhua, like other early studios had an in-house talent pool of directors, actors, actresses, and screenwriters.

Many, in fact, had been talent under contract with one of the four branch studios while they were still independent (such as Ruan Lingyu who was with Dazhonghua Baihe).