Viewpoint... The practical analysis of the path of accelerating the maturity of shareholder capital contribution.

Article 35 If, after the people's court accepts the bankruptcy petition, the contributor of the debtor has not fully fulfilled the obligation of capital contribution, the administrator shall require the contributor to pay the capital contribution paid, without being limited by the time limit of the capital contribution.

Article 22 When a company is dissolved, the capital contributions not yet paid by the shareholders shall be treated as liquidation property. The outstanding contributions of shareholders, including the outstanding contributions due and payable, as well as the contributions that have not yet expired in instalments in accordance with the provisions of Articles 26 and 80 of the Company Law.

When the company's property is not sufficient to pay off the debts, the people's court shall support the creditor's claim that the shareholders who have not paid their capital contributions, as well as other shareholders or promoters at the time of the establishment of the company, shall bear joint and several liability for the debts of the company within the scope of the unpaid capital contributions.

6. [Whether the shareholder's capital contribution should be accelerated to expire] Under the registered capital subscription system, shareholders enjoy the benefits of the term in accordance with the law. The people's court shall not support the creditor's request that the shareholders of the outstanding capital contribution period bear supplementary liability for the debts that the company cannot pay off within the scope of the unfunded capital contribution on the grounds that the company cannot pay off the debts due. However, the following circumstances are excluded:

(1) In the case of the company as the person subject to execution, the people's court has exhausted the enforcement measures and has no property to enforce, and has the reasons for bankruptcy, but does not apply for bankruptcy;

(2) After the company's debts are incurred, the company's shareholders (general) will decide or otherwise extend the period of shareholders' capital contribution.

Article 17 As a profit-making legal person of the person subject to execution, the property is not enough to pay off the debts determined by the effective legal documents, and the applicant for execution applies for changes, additional shareholders, investors who have not paid or have not paid the capital contribution in full, or in accordance with the provisions of the Company Law If the promoter who bears joint and several liability for the capital contribution is the person subject to execution, the people's court shall support it.

Article 13, paragraph 2, where the creditors of the company request the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations to bear supplementary compensation liability for the unpayable part of the company's debts within the scope of the principal and interest of the unfunded capital contribution, the people's court shall support it; the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations have already assumed the above-mentioned responsibilities, and other creditors make the same request, the people's court shall not support.

Article 18 If a shareholder of a limited liability company fails to perform or fully performs the obligation of capital contribution, the transferee knows or should know that if the company requests the shareholder to perform the obligation of capital contribution and the transferee bears joint and several liability for it, the people's court shall support it; if the creditor of the company brings a lawsuit against the shareholder in accordance with the second paragraph of Article 13 of these provisions, At the same time, the people's court shall support. If the transferee, after assuming liability in accordance with the provisions of the preceding paragraph, recovers from the shareholder who has not fulfilled or has not fully fulfilled the obligation of capital contribution, the people's court shall support it. However, unless otherwise agreed by the parties.

According to Article 17 of the Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement (hereinafter referred to as the "Additional Provisions on Changes"), the elements for adding shareholders to the person subject to execution are "the property is insufficient to pay off the effective legal documents" "The debts determined by the shareholders have not paid or have not paid their capital contributions in full":

1. On "insufficient property to pay off debts established by legal instruments in force"

There are two common criteria for identification, one is that the person subject to execution has the conditions for bankruptcy, and the other is that the court exhausts enforcement measures to find that there is no property available for enforcement.

2, on "shareholders have not paid or not paid in full capital contribution"

In practice, there is considerable controversy as to whether the term "shareholders who have not paid or have not paid their capital contributions in full" in this provision includes shareholders whose capital contributions have not yet expired, and there are two main different views:

Point one:The "shareholders who have not paid or have not paid their capital contributions in full" as stipulated in Article 17 of the Additional Provisions on Changes only refers to the fact that they have not fulfilled their capital contribution obligations within the time limit for performance, excluding the situation where the time limit for performance has not yet expired, and the creditor's application for additional capital contribution is not supported if the shareholder whose time limit has not yet expired is the executed person. [Case 1, 2]]

Point two:In accordance with the "National Court Civil and Commercial Trial Work Conference Minutes" (Law [2019] No. 254) (hereinafter referred to as the "Nine People's Meeting Minutes"), the shareholders who apply for additional capital contribution that has not expired in accordance with Article 17 of the "Additional Provisions for Changes" and Article 6 of the "Nine People's Meeting Minutes" shall be supported. Cases 3 and 4]

[Case 1] Yao Yuchen and Zhang Liyong's Application for Execution of Objection(Case No.:(2019) Jin 02 Min Zhong No. 3715, Tianjin No.2 Intermediate People's Court)

Summary of the trial:Article 17 of the Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement stipulates that if the company's property is not sufficient to pay off the debts determined by the effective legal documents, the creditor may apply for additional shareholders who have not paid or have not paid the capital contribution in full to be executed and shall be liable within the scope of the unpaid capital contribution. Among them, "unpaid or underpaid capital contribution" refers only to the fact that the obligation of capital contribution has not been fulfilled within the period of performance, and does not include the situation where the period of performance has not been fulfilled. This is because the contribution system is designed to encourage entrepreneurship, reduce investment costs, give shareholders the benefit of capital contribution, and the time of capital contribution has been publicized, creditors should review the comprehensive determination of transaction risk, the company should apply for bankruptcy when insolvent to protect the interests of all creditors. In the absence of subjective malice by the shareholders, the capital contribution obligation shall not be accelerated. The creditor's application for additional shareholders who have not paid or have not paid the full amount of capital contribution has no legal basis and should not be supported.

[Case 2] Objection between a Jiangsu Foundation Company and a Zhongjian Foundation Company (Case No.:(2022) Zhejiang 0213 Zhiyi No. 26, Trial Court: Fenghua District People's Court of Ningbo City)

The Court held that:First of all, the execution case has ended this execution procedure, which shows that the property of a basic company of China Construction is not enough to pay off the debts determined by the effective legal documents. According to the law, the property of the enterprise legal person is not enough to pay off the debts determined by the effective legal documents. In the execution procedure, the shareholders who have not fulfilled the obligation of capital contribution can be added as the executed person, but the shareholders of the company enjoy the benefit of the period of capital contribution, and only the expiration of the period, in order to be deemed to have failed to meet the obligation to contribute. Secondly, with regard to the applicant's proposal that, according to the 2019 Minutes of the National Court Civil and Commercial Trial Work Conference, shareholders may be requested to accelerate the expiration of their contributions, thereby adding that they are the subject of execution. The court held that the above-mentioned "minutes of the meeting" is the guiding opinion for such situations encountered in the trial of the case, and the judgment result of the case can be used as the basis for execution. However, it is against the basic principle of separation of trial and execution to decide on the accelerated expiration of shareholders' capital contribution directly at the execution stage without trial. Therefore, the applicant's opinion is not accepted.

[Case 3] Li Jiaxian, Huang Xiaofang and Other Disputes over the Implementation of Loan Contract (Case No.:(2021) Yue 0115 Zhiyi No. 120, Trial Court: Guangzhou Nansha District People's Court)

The Court held that:According to the relevant provisions of Article 6 of the Minutes of the National Civil and Commercial Trial Work Meeting of the Courts [Fa (2019) No. 254]... In this case, under the circumstances that Guangzhou Singer Company had already had the reasons for bankruptcy and did not apply for bankruptcy, the capital contributions of the shareholders Chen Qian, Huang Xiaofang and Xie Bing should be due at an accelerated rate. Article 17 of the Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement stipulates that as an enterprise legal person subject to enforcement, its property is insufficient to pay off the debts determined by the effective legal documents, and the applicant for enforcement applies for change or addition. Shareholders, investors or promoters who have not paid or fully paid their capital contributions in accordance with the provisions of the Company Law are the persons subject to enforcement, if the liability is assumed in accordance with the law to the extent that the contribution has not been paid, the people's court shall support it. In this case, Chen Qian, Huang Xiaofang and Xie Bing, shareholders of Guangzhou Singer Company, the executor, failed to fulfill the obligation of capital contribution. The applicant requested to add Huang Xiaofang and Xie Bing as the executor of this case, and bear the responsibility within the scope of not contributing capital according to law. This court supports the above-mentioned laws and judicial interpretations.

[Case 4] Chen Mou v. Lu Moulong and Zhang Shareholders in Dispute over Liability for Damage to the Interests of Creditors of the Company (Case No.:(2020) Min 02 Min Zhong No. 2131, Trial Court: Xiamen Intermediate People's Court of Fujian Province)

The Court held that:Hou Zhenjun and Zhang Zhan Zhu are shareholders of Heqing Company and have not yet fully fulfilled the capital contribution obligations of Heqing Company, and the corresponding capital contribution period expires on December 30, 2020. At present, Heqing Company has not fulfilled the debts to Jinlong Company as determined in the effective judgment document, and has not been paid off after being enforced by the court. However, Heqing Company has made a resolution at the shareholders' meeting to extend the time limit for shareholders Zhang Zhanzhu and Hou Zhenjun to subscribe for capital contributions, thus damaging the legitimate rights and interests of creditor Jinlong Company. According to the provisions of Article 17 of the Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement, Jinlong Company has the right to add Zhang Zhanzhu and Hou Zhenjun as the person to be executed, and require them to be responsible within the scope of the outstanding capital contribution.

Some judicial opinions hold that Article 6 of the Minutes of the Ninth People's Meeting provides for two situations in which shareholders' capital contribution obligations are accelerated, but it does not explicitly apply to the situation in which additional shareholders are executed. Whether the shareholder's capital contribution is accelerated and whether the shareholder should bear the responsibility within the scope of the outstanding capital contribution shall be determined by the trial procedure, and shall not be dealt with through the non-litigation procedure of changing or adding the executed person. After the creditor's application for adding the shareholders of the executed company as the executed person in the execution procedure is rejected, the creditor may bring a remedy by filing an execution objection.

[Case] Implementation Review of Zhoushan Putuo Ocean Fishery Co., Ltd. and Zhoushan Baineng Optoelectronic Technology Co., Ltd. (Case No.:(2021) Zhejiang 72 Zhiyi No. 29, Trial Court: Ningbo Maritime Court)

The Court held that:Article 6 of the Minutes of the National Court Conference on Civil and Commercial Trial Work stipulates: "Under the registered capital contribution system, shareholders shall enjoy the benefits of the term in accordance with the law. The people's court shall not support the creditor's request that the shareholders of the outstanding capital contribution period bear supplementary liability for the debts that the company cannot pay off within the scope of the unfunded capital contribution on the grounds that the company cannot pay off the debts due. However, the following circumstances are excluded:(1) in the case of the company as the executed person, the people's court exhausts the enforcement measures and has no property to enforce, and has the reasons for bankruptcy, but does not apply for bankruptcy;(2) after the company's debts are incurred, the company's shareholders (The General Assembly) will resolve or otherwise extend the period of shareholders' capital contributions." Ocean Company claims that according to this provision, Zeng Guozhu's capital contribution accelerated maturity. In this regard, the Court is of the view that the provision does not explicitly apply to the situation where the additional shareholder is the executed person, and that under the registered capital contribution system, the shareholders of the company enjoy the benefits of the term in accordance with the law, whether the shareholders' capital contribution is accelerated and whether the shareholders should bear the responsibility within the scope of the outstanding capital contribution, subject to the trial procedure. Therefore, the claim of COSCO is also untenable.

According to the Supreme People's Court on the application<中华人民共和国公司法>Article 13, paragraph 2, of the (III) of Provisions on Certain Issues stipulates that "if the creditors of the company request the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations to bear supplementary compensation liability for the unpayable part of the company's debts within the scope of the principal and interest of the unfunded capital contribution, the people's court shall support it; if the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations have already assumed the above responsibilities, the people's court shall not support the same request", in accordance with the two circumstances of accelerated maturity of shareholders' contributions as stipulated in Article 6 of the Minutes of the Ninth People's Meeting,CreditorsShareholders may be sued separately to require shareholdersSupplementary liability for the unliquidated portion of the company's debts to the extent of the unfunded principal and interest,Most of the creditors.Damage to the interests of the company's creditors liability disputes as a case.To file a lawsuit. (Note: With regard to the specific criteria for determining the two situations in which the accelerated maturity of shareholder contributions is stipulated in Article 6 of the Minutes of the Ninth People's Meeting, the author has detailed in the article "Practical Analysis of the Application of the Accelerated Maturity of Shareholder Contributions", which will not be repeated here)

[Case 1] A science and technology company sued shareholders A and B for a dispute over liability for damaging the interests of the company's creditors (trial court: Beijing Tongzhou District People's Court)

The Court held that:The people's court shall not support the creditor's request that the shareholders of the outstanding capital contribution period bear supplementary liability for the debts that the company cannot pay off on the grounds that the company cannot pay off the debts due. However, the following circumstances are excluded: 1. In the case of the company as the person subject to execution, the people's court has exhausted the enforcement measures and has no property to enforce, and has the reasons for bankruptcy, but does not apply for bankruptcy; 2. After the company's debts are incurred, the company's shareholders (general meeting) Resolve or extend the period of shareholder capital contribution by other means. In the event that the company has any of the exceptions, the creditor shall have the right to require the shareholders of the outstanding capital contribution period to bear supplementary liability for the company's unliquidated debts within the scope of the unfunded capital contribution. This case mainly involves the first case, that is, whether the water treatment company has a cause for bankruptcy but does not file for bankruptcy. Whether the company has the cause of bankruptcy, should be based on the enterprise bankruptcy law, the first paragraph of Article 2 of the review, that is, the enterprise legal person can not pay off the debts due, and the assets are insufficient to pay off all the debts or obvious lack of solvency ...... The court held that the water treatment company belongs to the situation of unable to pay off the debts due and obvious lack of solvency, has the cause of bankruptcy, but did not file for bankruptcy. The capital contribution paid by A and B meets the conditions of accelerated maturity, and shall bear supplementary liability for the debts that the water treatment company cannot pay off within the scope of its unfunded contribution.

[Case 2] Dispute over Liability between Zhao Feixuan and Wu Binyu and Other Shareholders for Damage to the Interests of Creditors of the Company (Case No.:(2022) Shanghai 0107 Minchu No. 10004, Trial Court: Shanghai Putuo District People's Court)

The Court held that:Article 6 of the Minutes of the National Court Conference on Civil and Commercial Trials stipulates that the case meets the above two exceptions at the same time. Especially after the debt involved in the case, the shareholders of the balance company amended the articles of association to extend the period of capital contribution, malicious obvious. According to the articles of association of Tianping Company, each shareholder should have paid up his capital contribution before February 1, 2020. If he failed to make his capital contribution on time, he has breached the contract (for convenience of expression, he is temporarily referred to as "each shareholder". If Wu Binyu transfers his shares before that date, whether he should bear the responsibility or not will be discussed below in conjunction with the relevant equity transfer). By March 2020, Zhao Feixuan filed arbitration on the creditor's rights involved in the case, and applied to the court for enforcement in January 2021. When Tianping Company reported to the court that there was no property available for enforcement, if Tianping Company's shareholders made capital contributions on schedule, it would be enough to pay off the debts to Zhao Feixuan. However, it not only failed to faithfully fulfill its capital contribution obligations, but also extended the capital contribution period to 2050 by amending the articles of association, it is clearly to avoid the liability that shareholders will be required to make up their capital contributions if the company is unable to meet its debts. Such acts that harm the interests of the company's creditors shall have the right to request revocation and require the shareholders to perform their capital contribution obligations in accordance with the originally agreed period of capital contribution. Based on the above, the shareholders of Tianping Company cannot oppose the creditor Zhao Feixuan on the ground that the period of capital contribution has not yet expired, and the time of capital contribution of each shareholder shall still be February 1, 2020 as recorded in the original articles of association, and shall be used as the interest starting point for the corresponding amount of capital contribution for which each shareholder shall bear supplementary compensation liability to Zhao Feixuan.

If the debtor has the conditions for bankruptcy liquidation, the creditor may apply to the court for bankruptcy liquidation of the debtor. If the court accepts the bankruptcy application, the bankruptcy representative shall claim that the obligation of the company's shareholders to contribute capital shall be accelerated and the contributor shall be required to pay the capital contribution paid. It should be noted, however, that the interests of all creditors are protected in insolvency proceedings, individual liquidation is prohibited, and the legitimate claims of creditors will be paid fairly in the legal order.

[Case] Chuzhou Zhongxin Packaging Co., Ltd. v. Zhao Moumou, Zheng Moumou and others over the dispute over the recovery of unpaid capital contributions (Case No.:(2019) Wan 11 Min Zhong No. 3138, Trial Court: Chuzhou Intermediate People's Court, Anhui Province)

The Court held that:By the time the court of first instance ruled to accept the bankruptcy liquidation case of Zhongxin Packaging Company, Zhao Moumou and Zheng Moumou had not fulfilled their capital contribution obligations. Although the articles of association of Zhongxin packaging company set the time limit for capital subscription to be paid in full before November 12, 2034, according to Article 35 of the the People's Republic of China enterprise bankruptcy law, if the investor of the debtor has not fully fulfilled the obligation of capital contribution after the people's court accepts the bankruptcy application, the administrator shall require the investor to pay the capital contribution without being limited by the time limit of capital contribution, The time limit for the two parties to subscribe for capital shall be accelerated according to expire.