Viewpoint... New Company Law Research: The establishment of a company needs to be cautious-on the capital enrichment responsibility of the promoter shareholders and risk prevention.

As the main body that provides the initial conditions for the establishment of the company, the promoter and its behavior play a decisive role in the establishment of the company, and the new Company Law does not elaborate on the basic legal concept of the promoter. Article 1 of the (III) of the Provisions of the Supreme People's Court on Certain Issues Concerning the Application of the the People's Republic of China Company Law states: "A person who signs the articles of association for the purpose of establishing a company, subscribes for capital contributions or shares to the company and performs the duties of establishing the company shall be recognized as the promoter of the company, including the shareholders at the time of the establishment of the limited liability company." As a result, those who meet the above three criteria can be identified as promoters, as is currently the case with the courts in practice. The promoter's capital enrichment responsibility is actually a horizontal guarantee responsibility between the promoter's shareholders, in order to ensure the adequacy and reliability of capital, to ensure the company's legal integrity, by the promoter mutual guarantee of the performance of the capital contribution obligations, so as to ensure that the paid-in capital is consistent with the capital stipulated in the articles of association of the civil liability.

From the current Company Law to the new Company Law, the changes in the capital enrichment responsibilities of the promoter are mainly reflected in:

First, the expression is more precise, from "after the establishment of a limited liability company" to "when a limited liability company is established", effectively paying attention to the difference between the two time points of "establishment" and "establishment;

Second, the rules of capital enrichment liability for promoters of limited liability companies and limited liability companies have been unified, and the capital enrichment liability of promoters and shareholders of limited liability companies has been expanded, covering both monetary and non-monetary property in the same way as limited liability companies.

Responsibility comes from the obligation, the obligation of capital contribution is the premise of the responsibility of capital contribution, the obligation of capital contribution is legal and contractual obligation. As mentioned earlier, Article 50 of the newly revised "Company Law" stipulates the capital enrichment responsibility of the promoter of a limited liability company, and Article 99 stipulates the capital enrichment responsibility of the promoter of a company limited by shares. We discuss the application of the capital enrichment responsibility of the promoter shareholders from different subjects.

1. Applicable situation

In conjunction with Article 50 of the new Company Law, the capital enrichment liability of the promoter of a limited liability company applies as follows:

(1) The promoter has not actually paid the capital contribution in accordance with the provisions of the articles of association. The situation includes the complete failure to perform the capital contribution obligation at the expiration of the capital contribution period and the failure to perform the capital contribution obligation at the expiration of the capital contribution period.

(2) The actual value of the non-monetary property actually contributed by the promoter is significantly lower than the amount of the contribution paid. The definition of a significant undervalue of non-monetary property in this case requires consideration of both timing and extent. From the point of view of the time factor, the time of judging the value of the non-monetary property contribution shall be based on the time of the actual capital contribution of the shareholders, and if the promoter devalues the property due to other non-subjective factors after the capital contribution of the qualified non-monetary property, it shall not be deemed to be significantly lower than the amount of capital contribution paid. From the point of view of the degree factor, what is "significantly lower" is not clearly defined in the law and falls within the scope of judicial discretion, but it is generally believed that if the actual value of the non-monetary property is less than 30% of the amount of capital contribution paid, it may be considered "significantly lower".

2. Restrictions

It should be noted that there is also a prerequisite for the above-mentioned application, that is, the paid-in capital contribution at the time of the establishment of the company. The capital enrichment liability of the promoter applies to the paid-in capital contributions of other promoters at the time of establishment and does not include the contribution. That is, the promoter is only jointly and severally liable for the capital contributions that other promoters are required to pay before the establishment of the company as stipulated in the articles of association, and is not required to bear joint and several liability for the capital contributions that other promoters are required to pay after the establishment of the company as stipulated in the articles of association. As for the responsibility of other promoters to subscribe for capital contributions, Articles 51 and 52 of the new "Company Law" stipulate the system of collection and loss of power, and the board of directors shall bear this part of the obligation of trust.

3, after the transfer of shares, is it necessary to continue to bear the capital enrichment responsibility of the promoter shareholders?

Article 88 of the new Company Law clarifies the rules for the obligation and liability of capital contribution after the transfer of unpaid capital shares, specifically divided into the transfer of shares with an unexpired capital contribution period and the transfer of defective capital contribution shares. Among them, in the case of the transfer of the shares of the outstanding capital contribution period, the transferee shall bear the obligation to pay the capital contribution, and the transferor shall bear supplementary liability for the capital contribution that the transferee fails to pay on time. If the defective capital contribution shareholder transfers the defective capital contribution, the transferor and the transferee shall bear joint and several liability within the scope of insufficient capital contribution; if the transferee does not know and should not know of the existence of the above-mentioned circumstances, the transferor shall bear the liability.

The identity of the promoter's shareholders is fixed with the establishment of the company, and their capital enrichment responsibilities are not lost or relieved with the transfer of equity. The same is true of judicial practice.

In combination with the law, we can see that the capital enrichment liability of the promoter of a limited company is applicable in two cases: insufficient monetary capital contribution and insufficient non-monetary capital contribution. The so-called insufficient monetary contribution, that is, the promoter does not pay in accordance with its subscription shares; the so-called insufficient non-monetary contribution, that is, the actual value of the non-monetary property contributed by the promoter as a contribution is significantly lower than the subscribed shares, in both cases the other sponsors are jointly and severally liable within the scope of the insufficient contribution. Other circumstances are the same as those of a limited liability company and will not be repeated here.

The mainstream doctrine holds that there is a partnership between the promoters and that the promoters have all the powers related to the preparation of the company. When the establishment of the company fails, the promoters need to be jointly liable to the third party. It is on the basis of this principle of civil law that the promoters are jointly and severally liable for mutual supervision of capital enrichment. The withdrawal of capital contributions usually occurs after the successful establishment of the company, when the rights of the company have been transferred from the promoter to the shareholders' meeting, board of directors, managers and other organizations. The essence of the withdrawal is the shareholder's infringement of the company's property rights, which is a tort. According to the institutional arrangements of the new "Company Law", after the establishment of the company, the obligation and responsibility of supervising shareholders not to withdraw capital has been transferred to the board of directors. Therefore, the promoter should not be made to bear the responsibility of capital enrichment in the event of the withdrawal of capital contributions from other promoters.

As mentioned earlier, the capital enrichment liability between the promoters is limited to the time of establishment of the company. If the capital increase occurs after the establishment of the company, at this time, either from the decision of the capital increase, the implementer, or the person responsible for the supervision of the capital contribution obligations may no longer be the promoter of the company. Therefore, the promoter should not be required to assume the corresponding capital enrichment responsibilities.

The fulfillment of shareholders' capital contribution obligations involves the capital enrichment of the companies they invest in, and the capital enrichment of corporate legal persons such as companies is the basic element and guarantee for the orderly operation of the market economy. It not only involves the interest relationship between shareholders and shareholders, but also involves the relationship between the company and its creditors, the company's ability to fulfill its debts, and the interests of the company's employees, it can be said that the subject of interest involved is quite extensive. Based on the consideration of maintaining the social and economic order and the internal closure of the company, the statute of limitations shall not apply to the litigation of the company, other shareholders and third parties requesting the shareholders who violate the obligation of capital contribution to fully perform the obligation of capital contribution.

When a company is established with multiple promoters, a written promoter agreement or investment agreement can effectively prevent the legal risks arising from the failure of the company's establishment.

In the process of establishing a company, it is often necessary to authorize one or some of the promoters to enter into various types of contracts with third parties in order to serve the establishment of the company. For example, there may be a need to lease office space as a registered address, to purchase office supplies, to hire the necessary staff, etc. The authorized promoter may also infringe upon the legitimate rights and interests of third parties in the course of performing the company's preparatory duties. If the establishment of the company is successful, the corresponding legal consequences shall be borne by the company; if the establishment of the company fails, the corresponding legal consequences shall be borne by the promoter at the time of the establishment of the company.

If the establishment of the company fails, the following risks may be faced without a written promoter agreement: 1. There is a risk that the promoter is difficult to determine. Promoters who do not actually participate in the preparation may refuse to recognize themselves as promoters, thus avoiding the responsibility of promoters;

2. Due to the unclear agreement, the authorized promoter and other promoters have a huge internal dispute over the subject and proportion of responsibility after the failure of the establishment of the company. Therefore, when establishing a company, it is recommended that all promoters sign a promoter agreement to clarify the corresponding rights, obligations and responsibilities. At the same time, it is also possible to agree in the agreement that special arrangements are not included in the articles of association, thus avoiding disputes after the establishment of the company.

As mentioned earlier, the necessary expenses are generally incurred in the preparatory process of the company. If the company is established without an agreed paid-in capital contribution, it is generally advanced by some of the promoters. If the establishment of the company fails, liquidation and even recovery between the promoters will occur. At the same time, according to the principle of capital enrichment of the company, the establishment of the company in the absence of funds to carry out business, will undoubtedly make the individual shareholders directly face a relatively large external risk. Whether it is from the risk of avoiding the failure of the establishment, verifying the capital contribution ability of the promoter, or ensuring the business ability of the company after the establishment, the necessary capital contribution of the promoter at the time of establishment is conducive to the risk avoidance.

The new Company Law applies the expansion of the capital enrichment responsibility of the promoter of a limited company to the situation where other promoters fail to pay their monetary contributions in full and on time, which may be clearly excessive and unfair to some promoters who have a low shareholding ratio, do not control the company and do not actually participate in the establishment of the affairs. At present, under the premise that the law and judicial interpretation do not restrict the interpretation of the system, it is likely that an initiator holding only 1% of the shares will bear the extreme situation of joint and several liability for 100 of the registered capital. The system is also likely to be used by promoters with ulterior motives in order to pull the tiger's skin and pass on the risk to other promoters. Therefore, in order to prevent such risks, the necessary due diligence should be carried out on the promoter before the establishment of the company, the source of funds for the investment should be implemented, the necessary credit enhancement measures should be agreed in the promoter or investment agreement, the establishment of phased capital contribution arrangements and liability for breach of contract, in order to prevent the occurrence of such risks.

Non-monetary property must be valued in order to be used as a form of shareholder's capital contribution, and the judgment of "significantly lower" shall be based on the difference between the assessed amount of the non-monetary asset and the amount of capital contribution at the time of the shareholder's capital contribution. Generally speaking, if the assessed amount is less than 30% of the subscribed capital contribution, it can be regarded as "significantly less than" as stipulated in this article ". It should be noted that if the promoter makes a capital contribution with non-monetary property that meets the statutory conditions, the contribution property depreciates due to market changes or other objective factors, even if the value of the non-monetary property is significantly lower than the promoter's contribution, the promoter is not liable to make up the contribution. This is because, at the moment when the promoter completes the contribution, the non-monetary contribution is matched with the amount of its contribution. However, if the promoter uses the non-monetary asset to make capital contributions at the time of the establishment of the company, other promoters should pay special attention to the fairness and reasonableness of the assessed value of the non-monetary asset.