Corporate Litigation Study... The shareholder register of the company's litigation rules records disputes.

A dispute over the record of the register of shareholders is a dispute arising from the failure to make timely changes to the register of shareholders after the transfer of shares or the error of the record of the register of shareholders due to various other reasons, which in turn leads to the inability of shareholders to claim their rights on the basis of the records in the register of shareholders. In practice, disputes recorded in the register of shareholders are often litigated together with disputes over the confirmation of shareholders' qualifications and disputes over requests to change the registration of the company. By combing the relevant laws, supplemented by monographs and typical cases, this paper tries to clarify the relevant legal provisions and judicial rules for reference.

(I) related laws

1. the People's Republic of China Civil Procedure Law

Article 26 Litigation arising from disputes over the establishment of a company, confirmation of shareholder qualifications, distribution of profits, dissolution, etc., shall be under the jurisdiction of the people's court of the place where the company is domiciled.

2. Companies Act of the People's Republic of China

Article 23The establishment of a limited liability company shall meet the following conditions: (1) the number of shareholders shall meet the quorum; the (II) shall have the amount of capital contribution paid by all shareholders in accordance with the provisions of the articles of association; the (III) shareholders shall jointly formulate the articles of association of the company; the (IV) shall have the name of the company and establish an organizational structure that meets the requirements of the limited liability company; the (V) shall have the domicile of the company.

Article 24A limited liability company shall be established by less than fifty shareholders.

Article 25The articles of association of a limited liability company shall specify the following matters: (1) the name and domicile of the company; the business scope of the (II) company; the registered capital of the (III) company; the name or name of the (IV) shareholder; the mode, amount and time of capital contribution of the (V) shareholder; the organization of the (VI) company and its method of formation, powers, and rules of procedure; the legal representative of the (VII) company; (VIII) other matters deemed necessary by the shareholders' meeting.

The shareholders shall sign and seal the articles of association.

Article 32A limited liability company shall keep a register of shareholders, which shall record the following matters: (1) the name or names and domicile of the shareholders; the amount of capital contribution of the (II) shareholders; and the number of the certificate of capital contribution of the (III).

Shareholders recorded in the register of shareholders may claim to exercise their rights in accordance with the register of shareholders.

The company shall register the names of the shareholders with the company registration authority; if the registration items are changed, the change registration shall be carried out. If the registration is not registered or the registration is changed, it shall not be used against a third party.

(II) relevant judicial interpretation

1. (III) of the Provisions of the Supreme People's Court on Several Issues concerning the Application of the the People's Republic of China Company Law

Article 22If there is a dispute over the ownership of equity between the parties, and one party requests the people's court to confirm its ownership of equity, it shall prove one of the following facts: (1) it has contributed or subscribed to the company in accordance with the law, and does not violate the mandatory provisions of laws and regulations; the (II) has been transferred or inherited the company's equity in other forms, and does not violate the mandatory provisions of laws and regulations.

Article 23After the parties have fulfilled their capital contribution obligations in accordance with the law or acquired equity in accordance with the law, the company has not issued a certificate of capital contribution in accordance with the provisions of Articles 31 and 32 of the Company Law, recorded in the register of shareholders and registered with the company registration authority, and the parties request the company to perform The above obligations shall be supported by the people's court.

2. Interpretation of the Supreme People's Court on the Application of the the People's Republic of China Civil Procedure Law

Article IIIThe domicile of a citizen refers to the place where the citizen's household registration is located, and the domicile of a legal person or other organization refers to the place where the main office of the legal person or other organization is located.

If the location of the principal office of a legal person or other organization cannot be determined, the place of registration or registration of the legal person or other organization shall be the place of domicile.

Article 22Jurisdiction shall be determined in accordance with the provisions of Article 26 of the Civil Procedure Law for litigation arising from disputes over records in the register of shareholders, requests for changes in company registration, shareholders' right to know, company resolutions, company mergers, company division, company capital reduction, company capital increase, etc.

Provisions issued by regional courts in (III)

1. (I) of the Higher People's Court of Shanghai Municipality on Several Issues Concerning the Trial of Cases Involving Company Disputes

If the shareholders of a limited liability company transfer their shares to others, they shall obtain the consent of more than half of the shareholders of the company according to the provisions of Article 35 of the Company Law. If the shares are transferred without consent and other shareholders of the company do not approve the shares after the contract is signed, the equity transfer contract shall not be effective for the company, and the transferor shall bear the liability for breach of contract to the transferee, if other shareholders of the company do not approve, the transferor shall not bear the liability for breach of contract. After the equity transfer contract is signed with the consent of other shareholders, the company shall go through the formalities of changing the registration of shareholders, and the transferee shall exercise its rights to the company as a shareholder. If the company fails to go through the relevant formalities, the transferee may bring a right confirmation lawsuit for the defendant and may not claim cancellation of the contract from the transferor.

2. Guidelines of the Guangxi Higher People's Court on Several Issues Concerning the Trial of Company Dispute Cases

19. [The situation where the equity transfer contract clearly stipulates the time point of equity change] Once the equity transfer contract is established and effective, it can bind both parties to the contract. If the parties expressly agree on the point in time of the equity change, generally speaking, the point in time may be the performance of the contract such as the payment of shares or the payment of a certain period of shares, or it may be consistent with the company's confirmation of the transfer of shares, such as the company's change of the register of shareholders and the registration of industrial and commercial changes. If the parties agree that the time point of the change of equity is earlier than the company confirms the transfer of equity, then only a certain transfer of equity effect occurs between the parties to the contract, at which time the specific effect of the equity transferee can obtain includes:(1) the right to request the change procedures. That is, the right to request the company to change the register of shareholders, issue a certificate of capital contribution and register the industrial and commercial change;(2) the right to equity income. That is, a request is made to the equity transferor for payment of the property interest that the transferor has acquired from the company after the point in time at which the interest is transferred.

3. Opinions of Shandong Higher People's Court on Several Issues Concerning the Trial of Company Dispute Cases

41. If the shareholders request the company to issue a certificate of capital contribution, record it in the register of shareholders and the articles of association of the company, and go through the procedures for the change of industrial and commercial registration, the company refuses to do so, and the people's court shall support the shareholder's lawsuit requesting the company to perform its obligations.

1. Zhang Shuanggen: "On the Determination of Shareholder Qualification of Limited Liability Company-Centered on the Construction of the Shareholder Register System"

The shareholder register system refers to the situation in which there is a dispute over whether the subject recorded in the shareholder register is a true shareholder. Such disputes are in the category of litigation and belong to the confirmation of shareholder qualification. As mentioned above, in the internal operation of the company, shareholder qualification is a prerequisite for shareholders to claim their rights and the operation of the corporate governance structure, to a large extent belongs to the scope of the company's program, so based on the above principle, can be solved by using the formal shareholder roster standard. However, in the dispute over shareholder qualification, shareholder qualification is the core and focus of the dispute, and what is questioned is precisely the record of the shareholder roster, so at this time the consideration is the probative force of the evidence cited by the parties. However, there are no more than two kinds of disputes: either the evidence presented by the doubters is not sufficient to prove that there is an error in the record of the register of shareholders, the record of the register of shareholders is still maintained; or the evidence has proved that there is an error in the record of the register of shareholders, the record of the register of shareholders is overturned, thus initiating the correction procedure of the register of shareholders and correcting the error.

2. Xu Hao: Discussion on the Relationship between Equity Transfer of Company Law and Shareholder Qualification-Based on Judgment No. 0011 of Wan Min Er Zhong Zi (2009)

After the transfer of shares occurs, the transferee of shares notifies the company of the fact of the transfer of shares, and the company is obliged to change the register of shareholders and the industrial and commercial registration. The register of shareholders has the effect of confrontation, and the shareholders recorded in the register of shareholders may claim to exercise the rights of shareholders in accordance with the register of shareholders.

3. Song Limei: Study on the Register of Shareholders of Limited Liability Companies in China

The register of shareholders, as a statutory and necessary book of a limited liability company (hereinafter referred to as a "limited liability company"), is an internal document of the company. The shareholder register system plays a very important role in the field of corporate law system. In the case of a company, the company may determine the members of the company through the register of shareholders and maintain the status of a limited company as an independent legal person, and in the case of shareholders, shareholders may claim shareholders' rights by virtue of the presumptive role of the register of shareholders.

[Plaintiff]]:Shareholders

[Defendant]]:Company

Third Person]:Other interested parties

Jurisdiction]:Under the jurisdiction of the people's court of the company's domicile

[Claim]]:

1. Order the defendant to record the name and address of the plaintiff, the amount of capital contribution and the number of the capital contribution certificate in the register of shareholders and to register the name of the plaintiff (shareholder) with the company registration authority;

2. The costs of litigation in this case shall be borne by the defendant.

[Case 1: Chen Weixian and Guangxi Zhuang Autonomous Region Guigang Food Co., Ltd. Register of Shareholders Record Dispute No. (2019) Gui 0802 Minchu No. 447]]

The People's Court of Gangbei District, Guigang City, Guangxi Zhuang Autonomous Region held that: Article 32 of the Company Law stipulates that a limited liability company shall keep a register of shareholders, which shall record the following matters: (1) the name or domicile of the shareholders; the amount of capital contribution of the (II) shareholders; (III) the number of the capital contribution certificate; shareholders who record the register of shareholders may claim to exercise their rights in accordance with the register of shareholders. The company shall register the names of the shareholders with the company registration authority; if the registration items are changed, the change registration shall be carried out. If the registration is not registered or the registration is changed, it shall not be used against a third party. This case is a food company in the government-led restructuring, due to the confirmation of the company's shareholder qualifications and disputes. In this case, in order to confirm the shareholder qualification of the limited liability company, in addition to the relevant provisions of the company law, it is also necessary to comprehensively consider the relevant policies and regulations of government departments on the restructuring of state-owned enterprises. According to the approval of Guigang Municipal People's Government, Chen Weixian subscribed for 3000 yuan of state-owned assets of Guigang Food Corporation. After Guigang Food Corporation was restructured and renamed as a food company, Chen Weixian should be recognized as the actual investor and shareholder of the food company. As the law stipulates that the registered shareholders of a limited liability company are less than 50 and the provisions of food companies, only those with a capital contribution of more than 30000 yuan are registered as shareholders of the company. When the food company was established, the actual funder reached 286, Chen Weixian's capital contribution was 3000 yuan, according to the internal regulations of the food company, Chen Weixian failed to register as a nominal shareholder of the food company, but the food company should record Chen Weixian as a shareholder of the company in the register of shareholders. According to the industrial and commercial registration information, the nominal shareholders registered by the food company are Ning Yuanming and Guigang Bandung Building Materials Trading Co., Ltd. In the case of no more than 50 nominal shareholders, the food company shall apply to the industrial and commercial registration department for registration of Chen Weixian as a shareholder of the company. Therefore, Chen Weixian's request is supported.

[Summary of the Referee]]:

In the process of restructuring a state-owned enterprise into a limited company, it should be affirmed that the shareholders who contribute less have the status of actual investors. In the event that the number of shareholders of a limited liability company exceeds the quorum, the shareholder representatives may be elected on the basis of the autonomy of the company, but the relevant information of other shareholders who are not representatives of shareholders shall still be fully recorded in the internal register of shareholders. Where the number of shareholders of a limited liability company does not exceed a quorum, the claim of other shareholders who are not representatives of shareholders to register their names with the company registration authority should be supported.

[Case 2: Changchun Friendship Store Co., Ltd. and Chi Yang and Zhang Xifang's Shareholder Register Record Dispute No. (2017) Ji 0104 Min Chu No. 4108]]

The People's Court of Chaoyang District, Changchun City, Jilin Province held: 1. The original shareholders of Changchun Friendship Department Store Co., Ltd. were 166. When the company was changed from a joint-stock cooperative company to a limited company, a general meeting of shareholders should be held in accordance with the provisions of the Company Law, but the defendant failed to show the resolution of the general meeting of shareholders, and the change in the form of the company was flawed. During the period, although the majority of shareholders entrusted 11 shareholders' representatives to hold the shares on their behalf, and the board of directors of the company decided to handle the remaining shareholders who did not sign the power of attorney as holding on behalf of the decision, but in the case of the two plaintiffs without the consent of the majority of shareholders or in the name of the board of directors, the shareholders who did not have the intention to be anonymous cannot be changed into anonymous shareholders. Afterwards, the board of the two plaintiffs, therefore, the decision made by the board of directors on behalf of the plaintiff is invalid, and Changchun Friendship Store Co., Ltd. shall restore the shareholder qualification of the two plaintiffs. 2. Because there is no share holding agreement between the two plaintiffs and the share holder Yang Chunguang, Changchun Friendship Store Co., Ltd. claims to apply the provisions of Article 24, paragraph 2, of the "Interpretation III of the Company Law", and other shareholders of the existing company do not agree. For the reason, the shareholder qualification of the two plaintiffs is not recognized. Since the shareholders of the present limited company knew from the beginning that the two plaintiffs were the actual contributors of the company, in the absence of a proxy agreement, the actual contributors should enjoy the status of shareholders in accordance with the law, and the defendant's justification could not be established.

[Summary of the Referee]]:

1. When the company is restructured, the general meeting of shareholders shall be held in accordance with the relevant provisions of the Company Law. If the general meeting of shareholders is not held, there are procedural defects in the change of the form of the company.

2. Without the knowledge or consent of the shareholders, a shareholder who has no hidden will cannot be forced to become a hidden shareholder with the consent of a majority of other shareholders or in the name of the board of directors.

3. There is no agreement on the holding of shares between the shareholders and the holders of shares, and the actual contributors shall enjoy the status of shareholders in accordance with the law. In the absence of a valid proxy agreement and in the case that the shareholders of an existing limited company know from the beginning that a shareholder is the actual investor of the company, they shall not, in accordance with the provisions of Article 24, paragraph 2, of the Judicial Interpretation III of the Company Law, on the grounds that other shareholders of the existing company do not agree, do not recognize their shareholder qualifications.

[Case 3: Shanghai Lintongyan Li Guohao Civil Engineering Consulting Co., Ltd. and Tongji Engineering Group Co., Ltd. recorded dispute case No. (2018) Shanghai 02 Minzong No. 82]]

The court of first instance, Shanghai Chongming District Court, held that Lin Li Company recognized that the company had a register of shareholders and issued a certificate of capital contribution to the four shareholders registered in industry and commerce.

The equity transfer contractual relationship between Tongji Engineering Company and Tongji Innovation Company is legal and valid. Tongji Engineering Company has acquired 30% of the shares of Lin Li Company originally held by Tongji Innovation Company through bidding for a fee, and has paid off all the shares transfer funds, which has replaced Tongji Innovation Company as a shareholder of Lin Li Company. According to the law, a limited liability company shall issue a certificate of capital contribution to its shareholders, which shall state the name of the company, the date of establishment, the registered capital of the company, the name or name of the shareholder, the amount of capital contribution paid and the date of capital contribution, the number of the capital contribution certificate and the date of issuance. The company shall keep a register of shareholders, recording the names and domiciles of the shareholders, the amount of capital contribution of the shareholders and the number of the certificate of capital contribution. The company shall register the names of the shareholders with the company registration authority, and shall register the change in the registration matters. Now Tongji Engineering Company requires Lin Li Company to record Tongji Engineering Company in the register of shareholders and handle the application for change registration, which is in line with the law and supported by the court of first instance. Lin Li Company has issued a certificate of capital contribution to Tongji Innovation Company, the equity transferor, and after Tongji Engineering Company has transferred the equity held by Tongji Innovation Company, Lin Li Company shall cancel the original shareholder's capital contribution certificate and issue a capital contribution certificate to the new shareholder and Tongji Engineering Company. Accordingly, the court of first instance also supported the application of Tongji Engineering Company.

Judgment of first instance: 1. Linli Company shall issue a capital contribution certificate to Tongji Engineering Company within 10 days from the effective date of the judgment; 2. Linli Company shall record Tongji Engineering Company in the company's shareholder register within 15 days from the effective date of the judgment; 3. Linli Company shall assist Tongji Engineering Company to register the shareholder change registration of Shanghai Tongji Asset Management Co., Ltd. to Tongji Engineering Company within 15 days from the effective date of the judgment. The first instance case acceptance fee of 80 yuan shall be borne by Lin Li Company.

In the second instance, the parties did not submit new evidence. After trial, the court of second instance found that the facts found in the first instance were true, and the court of second instance confirmed them.

The court of second instance, the Shanghai Second Intermediate People's Court, also found that Shanghai Tongji Asset Management Co., Ltd. was approved by the Shanghai Yangpu District Market Supervision Administration to change the name of the company to Tongji Innovation and Entrepreneurship Holdings Co., Ltd. on September 15, 2017.

Shanghai No.2 Middle School believes that Tongji Engineering Company has become a shareholder of Lin Li Company through the transfer of shares, and its acquisition of shareholder qualification is legally based. There is no effective judgment to exclude Tongji Engineering Company from its shareholder qualification. It should enjoy the right to be recorded in the register of shareholders of Lin Li Company, to obtain a certificate of capital contribution, and to be changed and registered as a shareholder of Lin Li Company. Lin Li Company's appeal for refusal to perform the above obligations is unfounded in law and will not be supported by this court. Regarding Lin Li Company's appeal that it should be the subject of equity change registration instead of assisting Tongji Engineering Company to handle the change registration, Shanghai Second Intermediate People's Court held that the court of first instance had clearly stated in the judgment that Lin Li Company should register the name of the shareholder with the company registration authority. Although the main text of the judgment of the court of first instance stated to assist Tongji Engineering Company to handle the change, the content of the judgment was also the payment behavior that Lin Li Company should perform, there is no contradiction with the content of the application of Tongji Engineering Company, so the Shanghai Second Intermediate People's Court rejected the appeal of Lin Li Company.

[Summary of the Referee]]:

The method of acquiring the company's equity through transfer is legal and valid, and the shareholder has the right to be recorded in the register of shareholders, to obtain a certificate of capital contribution, and to change the registration as a shareholder of the company.

[comment]]:

In practice, disputes recorded in the register of shareholders mainly include the following two types: 1. Disputes arising from the failure of the transferor's shareholders to fulfill their obligation to register changes. Generally speaking, the registration of changes in the register of shareholders must be applied to the company by the transferor's shareholders, and the company shall register the changes; if the transferor's shareholders slack or fail to apply to the company for registration of changes due to negligence, a dispute over the register of shareholders may arise. 2. Disputes arising from the company's failure to fulfill its obligation to record. The register of shareholders shall be kept and maintained by the company, which shall be responsible for registration. Thus, when a company fails to change the register of shareholders because of slack or negligence or for various other reasons, a dispute over the record of the register of shareholders arises.

In accordance with the provisions of Articles 32 and 130 of the Company Law, a limited liability company and a joint stock limited company that issues registered shares shall keep a register of shareholders. Generally speaking, the register of shareholders mainly records the following matters: the name or name and domicile of the shareholders, the number of shares held by each shareholder or the amount of capital contribution, the number of shares held by each shareholder or the number of the certificate of capital contribution, and the date on which each shareholder acquired the shares. Therefore, in the event of a change of shareholding, the company should promptly fulfill its legal obligation to change the register of shareholders to avoid such disputes.