Point of View-Under the capital contribution system, is it necessary to bear joint and several liability for the company's subsequent debts after the transfer of equity by shareholders who have not actually contributed?

Published:

2023-07-10

1. brief In May 2016, Cui and Guo jointly established an ornamental fish company with a subscribed capital of 10 million yuan, of which Cui was 8 million yuan and Guo was 2 million yuan, with a subscription period of 30 years. In July 2017, Cui transferred his shares to Li. In August 2018, the ornamental fish company confirmed that it owed 1 million yuan to Wanhu Company for the decoration project, which has not been paid. In April 2019, Li and Guo canceled the company. In March 2020, Wanhu sued Li, Guo and Cui to the court, demanding that Li and Guo be liable for repayment, and Cui be jointly and severally liable for the above debts within the range of 8 million yuan. 2. Judgment Result As to whether Cui should bear the responsibility, the court of second instance made a judgment contrary to the court of first instance. The court of first instance held that Article 22 of the "Interpretation II of the Company Law" stipulates that when the company is dissolved, the outstanding capital contributions of shareholders should be regarded 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 the capital contribution and other shareholders or promoters at the time of the establishment of the company shall bear joint and several liability for the company's debts within the scope of the unpaid capital contribution. Article 18 of Interpretation III of the Company Law stipulates that the shareholders of a limited liability company transfer their equity if they fail to perform or fully perform their capital contribution obligations. The transferee knows or should know that if the company requests the shareholder to perform the capital contribution obligations and the transferee bears joint and several liability for this, the people's court shall support it. Where the creditor of the company brings a lawsuit against the shareholder in accordance with the second paragraph of Article 13 of these regulations, and requests the transferee to bear joint and, the people's court should support it. Cui, the promoter and original shareholder of the ornamental fish company, transferred the equity without fulfilling the obligation of capital contribution. Therefore, Cui should be jointly and severally liable for the company's debts within the scope of his unpaid capital contribution. The author as Cui a commissioned litigation agent in the subsequent appeal. In my opinion, under the registration subscription system, the transfer of shares by shareholders before the expiration of the subscription period is a legal and effective act, so the rights and obligations of shareholders have been broadly transferred. However, in the interpretation of the Company Law, "failure to fulfill or fully fulfill the obligation of capital contribution" should be defined as that after the expiration of the subscription period, Cui does not belong to this situation, and in addition, before the transfer of Cui's equity arises from the debts of the ornamental fish company and the reasons for the dissolution of the company, the provisions of Articles 18 and 22 of Interpretation II of the Company Law shall not apply. Cui should not be jointly and severally liable. Subsequently, the court of second instance adopted the author's point of view and revoked the judgment of the court of first instance. 3. legal analysis Summing up the case in the abstract, the question can be raised: after the shareholders transfer their shares before the expiration of the capital contribution period, are they liable for the company's subsequent debts? 1. The issue of the effectiveness of equity transfer. The validity of the equity transfer should be judged before discussing whether the shareholders of the transferred equity should bear the debt. It is generally believed that under the paid-up capital system, the shareholders of the company shall enjoy the benefits of the period of the paid-up capital during the life of the company, and the shareholders of the company shall enjoy the rights and obligations of the shareholders after paying a certain amount of capital, so that the exercise of the rights of the shareholders to transfer their own equity is valid as long as it conforms to the relevant laws on the transfer of equity. In China, the transfer of equity in accordance with the Civil Code of legal acts effective elements and the relevant provisions of the Company Law can be. The Company Law and its relevant judicial interpretations are not prohibitive. And from the essence of the equity transfer, the equity transfer is not a physical contribution, but a qualification. Anyone who has acquired the status of a shareholder in accordance with the law has the right to transfer, even if the transfer of shares is valid before the expiration of the subscription period. 2. The circumstances in which the liability for the debt is required. The transfer of shares is legal and valid, and then we will discuss the circumstances under which the original shareholders should bear the relevant responsibility for the debts of the subsequent company. Article 18 of Interpretation III of the Company Law stipulates that if a shareholder of a limited liability company fails to perform or fully perform its capital contribution obligations, the transferee knows or should know that the company requests the shareholder to perform its capital contribution obligations and the transferee knows or should know that the company requests the shareholder to perform its capital contribution obligations and the transferee bears joint and several liability for this, the people's court shall support it; where the creditors of the company file a lawsuit against the shareholder in accordance with the second paragraph of Article 13 of these provisions, and at the same time request the aforementioned transferee to bear joint and several liability for this, the people's court shall support it. According to the above provisions, the original shareholders to bear joint and several liability to meet the requirements of:(1) the transfer of equity without full performance of capital contribution obligations;(2) the transferee knew or should have known of this. The more controversial item is item (1), so only this requirement is discussed, how should the failure to fully fulfill the capital contribution obligation be defined, especially under the registered capital system, is the failure of shareholders to fulfill the capital contribution before the expiration of the period of time belong to the above situation? According to the relevant decision rules of the Supreme Court (see Part IV), it is concluded that shareholders enjoy the benefits of the term before the expiration of the subscription period, so that the failure of shareholders to pay or not fully pay the capital contribution within the subscription period is not an unfulfilled or incomplete performance of the capital contribution obligation. Shareholders who transfer their shares before the expiration of the subscription period are not required to be jointly and severally liable for the company's unliquidated debts within the scope of the unfunded principal and interest. And the Nine People's Minutes also make relevant provisions, shareholders in accordance with the law to enjoy the benefits of the term. Therefore, "failure to fully fulfill the obligation to contribute capital" should be understood in a narrow sense, and it should be interpreted as an equity transfer that has not paid the capital contribution (the capital contribution has been expired) beyond the payment period, I .e. a defective capital contribution. In summary, we can conclude that shareholders who have not actually made capital contributions are not liable for the transfer of equity under the following conditions: 1. The period of capital contribution before the transfer of equity has not expired; 2. The debt occurs after the transfer of equity; 3. There is no accelerated maturity under the Company Law. Summary of 4. referee rules On May 28, 1.2013, Anhui Holdings and China Energy Holdings signed the Equity Transfer Agreement, transferring 99% of its equity in An Investment to China Energy Holdings, and transferring the rights and obligations of shareholders together. Therefore, the transfer of equity by Anhui Holdings in the case of capital contribution obligations have not yet expired, does not belong to the expiration of the capital contribution period and does not fulfill the capital contribution obligations, Anhui Holdings should no longer bear the responsibility of capital contribution to the company. (2016) Supreme Famin Re -301 2. According to the first paragraph of Article 28 of the "the People's Republic of China Company Law", "Shareholders shall pay in full and on time the amount of capital contributions they have subscribed for as stipulated in the company's articles of association", before the expiration of the subscription period, shareholders enjoy the benefits of the period, Therefore, the failure of shareholders to pay or fully pay their capital contributions within the subscription period does not belong to the failure or failure to fully perform their capital contribution obligations. A shareholder who transfers his equity before the expiration of the subscription period is not required to be jointly and severally liable for the company's unpayable debts within the scope of the unfunded principal and interest, unless the shareholder has the bad faith of transferring the equity to evade the obligation of capital contribution, or there are exceptional circumstances such as zero paid-in capital and setting an ultra-long subscription period in the case of a low registered capital. (2021) Supreme Famin Shen No. 6421 3. In this case, Feng Liang and Feng Dakun, the former shareholders of Gansu Huahuineng Company, have a capital contribution period up to December 31, 2025. Article 28 of the the People's Republic of China Company Law stipulates that shareholders shall pay in full and on time the amount of capital contributions they have paid as stipulated in the articles of association of the company. Shareholders enjoy the "term interest" of capital contribution, and the creditors of the company have the opportunity to examine whether to conduct a transaction with the company on the basis of reviewing the credit information such as the time of capital contribution of the shareholders of the company, and the creditors' decision on the transaction shall be subject to the time of capital contribution of the shareholders. The Supreme People's Court on the application<中华人民共和国公司法>The "failure to perform or fully perform the obligation of capital contribution" stipulated in Article 13, paragraph 2, of the (III) on Certain Issues shall be understood as "failure to pay or fully pay the capital contribution", and shareholders whose capital contribution period has not expired and have not fully paid their share of capital contribution shall not be deemed as "failure to perform or fully perform the obligation of capital contribution". In this case, when Feng Liang and Feng Dakun transferred all the equity, the capital contribution period of the subscribed equity has not expired, which does not constitute Article 13, paragraph 2, of the "(III) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Company Law" The situation of "transferring equity without fulfilling or fully fulfilling the obligation of capital contribution" as stipulated in Article 18. (2019) Supreme Law No. 230 Comprehensive case 1. 2. three decision rules can be considered that the shareholders who transfer the equity before the expiration of the capital contribution period should not be considered as "not fulfilling or not fully fulfilling the obligation of capital contribution". 4. Yazer Company filed for bankruptcy liquidation in a timely manner when it had the reasons for bankruptcy. As the sole shareholder of Yazer Company at that time, Microneet Company did not actively promote Yazer Company to file for bankruptcy liquidation, nor did it actively pay capital to supplement the company's capital to pay off its debts. In this case, in order to safeguard the interests of the creditors of Yaze Company, it shall, in accordance with the provisions of Article 35 of the Enterprise Bankruptcy Law, determine that the capital contribution of the shareholders who have not reached the period of capital contribution shall be accelerated due to the bankruptcy of the company, and determine that the capital contribution obligation of the micro-network company shall be accelerated due before the transfer of equity. (2020) Shanghai 03 Minchu No. 5 Combined with the case 4 decision rules, it can be held that the period of capital contribution has not expired but there is an accelerated maturity situation under the company law. 5. In this case, Bian Xiangping's secured creditor's rights to Beijing Zhengrun Energy Company occurred after Gao Yang's transfer of capital contribution, that is, the company's creditor's rights did not exist at the time of equity transfer; Gao Yang and Guoxin Zhixi Center signed the "Capital Contribution Transfer Agreement" which stipulates that the transferee Guoxin Zhixi Center shall take over the rights and obligations of the funder, beijing Zhengrun Energy Company registered the relevant "Shareholders' Meeting Resolution" and "Investment Transfer Agreement" with the industrial and commercial department and registered the industrial and commercial change. Bian Xiangping should know that Gao Yang is no longer a shareholder when accepting the guarantee provided by Beijing Zhengrun Energy Company. The legal guarantee relationship between Beijing Zhengrun Energy Company and Beijing Zhengrun Energy Company has nothing to do with Gao Yang, and there is no expectation interest or trust interest in Gao Yang. Therefore, the judgment of the second instance found that Gao Yang's transfer of equity before the expiration of the period of capital contribution, its capital contribution obligations are transferred together, does not belong to the failure to fulfill or fully fulfill the capital contribution obligations, and there is nothing improper. Bian Xiangping applied for a retrial and held that Gao Yang's transfer of capital contribution was an expected breach of the company's capital contribution liability and had no legal basis. (2020) Supreme Law Minshen No. 5769 In conjunction with the rules of judgment in Case V, it can be held that there is no liability for claims and debts arising after the transfer of equity before the expiration of the period of contribution. Reference article: 1. Liu Min. On the liability of capital contribution after the transfer of unpaid-up equity, Law and Business Research, 2019,36(06). 2. The shareholders who have not reached the period of capital contribution shall still have the obligation to contribute after the transfer of equity, WeChat public number Shanghai High Court Research Office. https://mp.weixin.qq.com/s?__biz=MzI2ODUzMDA3MA==&amp;mid=2247499886&amp;idx=1&amp;sn=69268d6e27169ac9e21e1120d1ab481a&amp;chksm=eaecb897dd9b31811ddff7860e876a9cb4d107f947d654c527aaefbe5914c24916c2c7999f3c&amp;scene=27</中华人民共和国公司法>

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