Viewpoint... How directors avoid the risk of liquidation liability under the new Company Law.

1. Different provisions of the old and new Companies Act

2. Interpretation of the different provisions of the old and new Companies Act

(1) Liquidation obligor from "dichotomy" to "two in one"

Article 183 of the original "Company Law" did not provide for the liquidation obligor, nor did it stipulate that the liquidation obligor should bear the liquidation responsibility, that is, the liquidation group should be established in time according to law to carry out liquidation. Articles 18, 19 and 20 of the former Judicial Interpretation II of the Company Law stipulate that the shareholders of a limited liability company, the directors and controlling shareholders of a joint stock limited company, and the actual controller of the company under certain circumstances are the liquidation obligors.

Article 232 of the new Company Law stipulates that the liquidation obligor, whether it is a limited liability company or a limited liability company, is a director of the company.

(2) The liquidation liability of the liquidation obligor from the "typical list" to the inclusion of the tort liability legal system.

Articles 18, 19 and 20 of the former Judicial Interpretation II of the Company Law listed four typical liquidation responsibilities of the liquidation obligor, namely: first, the company's property losses were caused by the failure to set up a liquidation group in time to start liquidation, and the liquidation obligor was liable to the creditors within the scope of the losses; Second, the company's main property, account books and important documents were lost due to the failure to set up a liquidation group in time to start liquidation, if liquidation cannot be carried out, the liquidation obligor shall bear joint and several liability for the liquidation of the company's debts; third, after the cause of dissolution of the company, the liquidation obligor maliciously disposes of the company's property, or cancels the company's registration illegally in false liquidation, and the liquidation obligor shall bear the liability for compensation to the creditors who have suffered losses; fourth, the company shall be canceled without liquidation, resulting in the company being unable to carry out liquidation.

The new Company Law does not list the specific circumstances of liquidation liability, but provides for the constituent elements of liquidation liability according to the tort liability law, that is, after the cause of the dissolution of the company, the liquidation obligor shall take the lead in setting up a liquidation group to initiate liquidation proceedings in a timely manner. If the liquidation obligor fails to perform the liquidation obligation in time and causes losses to the company or creditors, it shall be liable for compensation.

Liquidation liability has changed from "typical listing" to being included in the legal system of tort liability, which has actually expanded the scope of liquidation liability. In company practice, many acts that are lazy or hinder the initiation of liquidation procedures can be determined according to the third paragraph of Article 232 of the new Company Law and the relevant provisions of the tort liability code of the Civil Code.

(3) Under the new Company Law, the controlling shareholder and actual controller of the company are liquidators under certain circumstances.

The third paragraph of Article 180 of the new "Company Law" stipulates that the controlling shareholder and actual controller of the company are also liquidators under specific circumstances when the company's affairs are actually executed, and shall bear liquidation responsibilities in accordance with the law.

1. Different provisions of the old and new Companies Act

2. Interpretation of the different provisions of the old and new Companies Act

(1) Liquidation group members may agree to expand the scope

Article 183 of the former Company Law stipulates that the liquidation group of a limited liability company shall be composed of shareholders, and the liquidation group of a joint stock limited company shall be composed of directors or persons determined by the general meeting of shareholders. Article 232 of the new "Company Law" stipulates that whether it is a limited liability company or a company limited by shares, the liquidation group shall be composed of directors, or other persons specified in the articles of association of the directors, the resolutions of the shareholders meeting, or the articles of association of the company or the shareholders meeting Resolutions confirmed by other persons.

(2) The liquidation liability of the members of the liquidation group is included in the legal system of tort liability.

Article 189 of the original "Company Law" and Article 23 of Judicial Interpretation 2 stipulate that the members of the liquidation team shall be loyal to their duties when performing liquidation duties, and perform liquidation duties in violation of laws, administrative regulations or the company's articles of association, or there is intentional or gross negligence. If the company or creditors cause losses, the members of the liquidation team shall be liable for compensation. Articles 11 and 15 of the judicial interpretation of the original company law also listed two typical liquidation responsibilities of members of the liquidation group, namely: first, failing to notify or announce the creditors, they shall be liable for compensation for the losses caused to the creditors; second, if the implementation of the unconfirmed liquidation plan causes losses to the company or creditors, they shall be liable for compensation.

Article 238 of the new Company Law does not list the specific circumstances of the liquidation liability of the members of the liquidation group, but stipulates the constituent elements of the liquidation liability according to the tort liability law, that is, the members of the liquidation group have the duty of loyalty and diligence in performing the liquidation duties. If the members of the liquidation group violate the duty of loyalty and diligence and neglect to perform the liquidation duties, thus causing losses to the company, they shall be compensated; if they neglect to perform the liquidation duties and are subjective and intentional or grossly negligent, thus causing losses to creditors, they shall be compensated.

(3) Under the new "Company Law", if the members of the liquidation group violate the duty of loyalty and diligence, and cause losses to the company, they shall be compensated. It is no longer necessary for the members of the liquidation group to be subjective or gross negligence.

1. If the directors fail to take the lead in setting up a liquidation group in a timely manner, they shall bear the responsibility for liquidation.

The third paragraph of Article 232 of the new "Company Law" stipulates that if a director fails to establish a liquidation group in time in accordance with the law, in accordance with the company's articles of association or the resolution of the shareholders meeting to start liquidation on his own, causing losses to the company or creditors, he shall be liable for compensation.

2. If a director fails to apply for compulsory liquidation in a timely manner in accordance with the law, he shall be liable for liquidation.

When a director is unable to take the lead in setting up a liquidation group in time to start self-liquidation, if he fails to apply to the people's court in a timely manner to appoint relevant personnel to form a liquidation group to carry out liquidation in accordance with the provisions of paragraph 1 of Article 233 of the new Company Law, he shall be liable for liquidation.

3. When the company is forced to liquidate, the directors shall bear the responsibility for liquidation.

The second paragraph of Article 233 of the new "Company Law" stipulates that if a company's business license is revoked or ordered to close or cancel, the department or company registration authority that made the decision may apply to the people's court to designate relevant personnel to form a liquidation team to conduct liquidation. Although the company is forced to liquidate, the directors, as liquidators, cannot be relieved of their liquidation liability.

4, the company is forced to write off, the directors shall bear the responsibility of liquidation.

Article 341 of the new "Company Law" stipulates that if a company has its business license revoked, ordered to close down or revoked, and has not applied to the company registration authority for cancellation of company registration for three years, the company registration authority may cancel the company registration. Although the company is forced to write off, the directors, as liquidators, should still be liable for liquidation.

5. In the event of a simple cancellation of the company, the directors are not liable for liquidation.

Article 240 of the new "Company Law" stipulates that if a company has not incurred debts during its existence, or has paid off all debts, the company registration may be canceled through a summary procedure in accordance with the provisions upon the commitment of all shareholders. The summary write-off does not require liquidation, and the director is not subject to the liquidation liability of the liquidation obligor.

1. If a director fails to perform the seven functions and powers of the liquidation group stipulated in Article 234 of the new company law on the basis of loyalty and diligence, and causes losses to the company, he shall be liable for compensation; if he causes losses to creditors due to intentional or gross negligence, he shall be liable for compensation.

2. If the company establishes a liquidation group on its own but does not liquidate, delay liquidation or illegal liquidation, and the directors fail to apply to the people's court for compulsory liquidation in time, causing losses to the company, they shall be liable for compensation; if they cause losses to creditors due to intentional or gross negligence, they shall be liable for compensation.

3. If the liquidation group finds that the company's property is insufficient to pay off its debts after cleaning up the company's property and preparing the balance sheet and property list, the directors shall be liable for compensation if they fail to apply to the people's court for bankruptcy liquidation in time and cause losses to the company; if they cause losses to creditors due to intentional or gross negligence, they shall be liable for compensation.

Articles 18, 19 and 20 of the former Judicial Interpretation of the Company Law and Article 232 of the new Company Law stipulate that directors are the liquidation obligors of joint stock limited companies.

Due to the different provisions of the old and new Company Law on the liquidation of limited companies, judging whether the directors of "stock limited companies" are liquidation obligors is actually judging whether the new Company Law can be retroactive. If the new Companies Act is retroactive, directors are liquidators, otherwise they are not.

1. The new Company Law has no retroactive effect and the directors are not liquidation obligors.

(1) Before the implementation of the new "Company Law", if the cause of dissolution of the company has occurred for more than 15 days, who is the liquidation obligor shall be determined in accordance with the original "Company Law.

Article 183 of the former Company Law and Article 232 of the new Company Law both stipulate that a liquidation group shall be established within 15 days after the cause of dissolution of the company appears to begin liquidation, that is, 15 days is the legal time limit for the liquidation obligor to establish a liquidation group to begin liquidation. If a liquidation group is not established within the statutory time limit, the liquidation obligor shall be liable for liquidation. Before the implementation of the new "Company Law", the cause of company dissolution has been more than 15 days, and the liquidation obligor and liquidation liability have been determined in accordance with the original "Company Law. Therefore, the Supreme People's Court on the application. <中华人民共和国公司法> Article 6, paragraph 1, of the Provisions on the Effectiveness of Time stipulates that the legal facts that should be liquidated occurred before the implementation of the Company Law, and if there is a dispute over the liability for liquidation, the provisions of the law and judicial interpretation at that time shall apply.

(2) Before the implementation of the new "Company Law", if the cause of company dissolution has occurred for more than 15 days, the liquidation obligor and liquidation liability have been determined in accordance with the original "Company Law", even if the company should be liquidated and the unliquidated state continues until the new "Company Law" comes into effect, and even for a long time after the implementation of the new "Company Law", the liquidation obligor and liquidation liability will not change.

2. The new Company Law is retroactive, and directors are liquidators.

If the 15-day statutory time limit for the establishment of a liquidation group crosses the critical point before and after the implementation of the new "Company Law", the new "Company Law" will come into effect before the 15-day time limit expires, and the liquidation obligor cannot be determined according to the original "Company Law" At this time, the liquidation obligor and liquidation liability cannot be determined according to the new "Company Law" because the reasons for dissolution of the company appear before the implementation. Following the legislative purpose of facilitating the liquidation work, the Supreme People's Court on the application of <中华人民共和国公司法> The second paragraph of Article 6 of several provisions on the effectiveness of time stipulates that when the legal time limit of 15 days for the establishment of a liquidation group exceeds the critical point before and after the implementation of the new company law, the new company law has retroactive effect, and the directors are the liquidation obligors of the limited company. The directors shall set up a liquidation group within 15 days from July 1, 2024 to start liquidation, otherwise they shall bear the liquidation responsibility.

The new Company Law provides for the "dual" liquidation duties of directors, whether "stock company" or "incremental company" directors, should actively perform their liquidation duties as liquidation obligors or members of the liquidation group in accordance with the law, in order to avoid the risk of liquidation liability.

In addition, according to Article 240 of the new Company Law, there is no need for liquidation, such as the simple cancellation of registration of the company, and there is no risk of liquidation liability for directors.