The difference between the new capital subscription dispute and the shareholder's capital contribution dispute and the cause of the company's capital increase dispute.
Published:
2020-12-07
In 2011, the Supreme People's Court issued the "On Amending<民事案件案由规定>The notice of the "Decision of the Company" (Law [2011] No. 41) added "246 and new capital subscription disputes" under the second-level cause of action "22. Disputes related to the Company". Compared to common company-related disputes such as shareholder capital contribution disputes and company capital increase disputes, new capital subscription disputes are rare. As of December 1, 2020, a search on the Handle Case Online with the keyword "New Capital Subscription Dispute" has retrieved 2367 judgment documents, including 80 judgment documents of the High People's Court and 12 judgment documents of the Supreme People's Court. It can be seen that new capital subscription disputes are rare in practice, and there are few practical articles on related issues, resulting in many disputes in dealing with such cases in practice, and the determination of the cause of the new capital subscription dispute is one of them.
According to the Provisions on the Cause of Action in Civil Cases, a dispute over the subscription of new capital refers to a dispute arising from the subscription of new capital by a limited liability company and the issuance of new shares by a limited liability company, and is a dispute arising from an objection to the act of capital increase itself. In practice, some lawyers and courts often confuse new capital subscription disputes with shareholder capital contribution disputes and company capital increase disputes, so it is very useful to clarify the difference between them in practice to correctly determine the cause of the new capital subscription dispute.
Selected Cases]
Case 1: Case of Dispute over New Capital Subscription between Guangyuan Economic Development Zone Ronghua Microfinance Co., Ltd., Guangyuan Xinghe Construction Co., Ltd. and Wang Peiming and Guo Wanhe [Guangyuan Intermediate People's Court (2016) Chuan 08 Min Zhong No. 333]]
With regard to the cause of the case, the Court is of the view that shareholder capital contribution refers to the act of the shareholders of the company in the establishment or increase of capital of the company, in accordance with the provisions of the law, the articles of association of the company and the agreement of the share recognition agreement, to deliver property to the company or perform other payment obligations in order to obtain equity. The plaintiff in this case is not a shareholder of the defendant company at the time of capital contribution, its capital contribution is as the defendant company's new capital contribution, the dispute between the new investor and the company, is the new capital subscription dispute between the new investor and the company, the cause of the case should be the new capital subscription dispute. The plaintiff filed a lawsuit with the court over the shareholder's capital contribution dispute, and its claim is inconsistent with the nature of the civil legal relationship it claims. According to Item 5 of Article 3 of the Notice on Printing and Distributing the Revised Provisions on the Cause of Civil Cases of the Supreme People's Court, "If the legal relationship sued by the parties is inconsistent with the legal relationship of the actual litigation, the people's court shall close the case according to the nature of the actual legal relationship between the parties found by the court, the Court confirmed that the cause of the case was a dispute over the subscription of new capital.
Case 2: Hu Jianxin and Wang Kanghua's New Capital Subscription Dispute and Sale Contract Dispute [Supreme People's Court (2017) Supreme Law Minshen No. 1412]]
On the determination of the cause of the case. New capital subscription disputes regulate the company's new capital, in addition to shareholder contribution disputes related disputes. Since this case only involves the performance of the parties' capital increase obligations, the cause of the case found in the original judgment is indeed inappropriate. However, in view of the fact that the original judgment did not deal with the entity of the case properly, the dispute related to the equity transfer of Wuzhishan emerald city Company was not related to the determination of the cause of the case, and the issue of the cause of the case was not the cause of retrial stipulated in Article 200 of the Civil Procedure Law, Hu Jianxin applied for retrial on the grounds that the cause of the case was determined incorrectly, and the court did not support it.
Case 3: Fu Zhiyan, Huang Aiqing and Hu Jianxin, Wang Kanghua and other new capital subscription disputes, sales contract disputes [Hainan Provincial Higher People's Court (2015) Qiongmin Er Zhong Zi No. 21]]
The Court held that the original trial court determined that the cause of the case was a shareholder capital increase dispute, and after investigation, the Supreme People's Court's Provisions on the Cause of Civil Cases provided for a shareholder capital contribution dispute, a company capital increase dispute, and a new capital subscription dispute, and there was no shareholder capital increase dispute. According to the Agreement and Supplementary Agreement in this case, Hu Jianxin and Wang Kanghua, as new investors, invested in Emerald City to increase the company's capital, Hu Jianxin acquired 65% of the company's equity and Wang Kanghua acquired 10% of the company's equity. Prior to the signing of the agreement between the two parties, the Emerald City Company already existed, rather than a newly established joint venture between the two parties. Judging from the contents of the Agreement and the Supplementary Agreement, the main legal relationship of this case is the dispute caused by the subscription of the company's new capital by other people other than the shareholders of the company instead of the original shareholders. The case should be determined as a dispute over the subscription of new capital in accordance with the provisions of the Supreme people's Court on the cause of Civil cases, and the original court determined that the cause of this case was a dispute over capital increase by shareholders.
Lawyer's View]
From the above, it can be seen that in practice, lawyers and courts often confuse new capital subscription disputes with shareholder contribution disputes and company capital increase disputes, and how to distinguish them clearly is critical. First of all, the new capital subscription dispute is obviously different from the shareholder's capital contribution dispute, the shareholder's capital contribution dispute is applicable to the shareholder's violation of the capital contribution obligation, and the new capital subscription dispute is the company's new registered capital, in addition to the shareholder's capital contribution dispute related disputes. A shareholder's capital contribution dispute is a dispute arising from the loss of the company or other contributors who have fulfilled their capital contribution obligations due to the breach of their capital contribution obligations by the shareholders of the company. New capital subscription disputes are disputes arising from the subscription of new capital by a limited company and the issuance of new shares by a limited company. The new capital subscription dispute is aimed at the company's new registered capital, while the shareholder capital contribution dispute is aimed at the shareholder's breach of capital contribution obligations.
In addition, attention should be paid to the difference between the cause of the company's capital increase dispute and the new capital subscription dispute. New capital subscription disputes mainly occur between the new investor and the company and between the original shareholders and the company, while the company's capital increase disputes are mainly civil disputes caused by the company's capital increase in the process of capital increase. The following circumstances apply to the company's capital increase disputes: shareholders claim that the company's capital increase is invalid in violation of procedures, and shareholders claim to exercise the subscription priority of new capital. The new capital subscription dispute mainly applies to the shareholders of a limited liability company or a limited liability company who claim the equity of the new capital, and the shareholders of a limited liability company who claim the right to subscribe for the new capital.
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