Perspective | Disagreements in Judicial Practice Regarding the Addition of Shareholders Whose Capital Contribution Deadline Has Not Yet Arrived as Enforced Parties, and Jurisdictional Changes in Filing Separate Lawsuits for Accelerated Maturity of Shareholders’ Capital Contributions Under the New Civil Cause of Action

Article 17 of the “Provisions of the Supreme People’s Court on Several Issues Concerning the Modification and Addition of Parties in Civil Enforcement (Revised in 2020)” states: “If a for-profit legal person that is the party subject to enforcement has insufficient assets to satisfy the debts determined by the effective legal instrument, and the applicant for enforcement requests to modify or add as the party subject to enforcement shareholders, investors who have not yet paid their contributions or have not fully paid their contributions, or promoters who, pursuant to the Company Law, bear joint and several liability for such contributions, and if these individuals are liable within the scope of their unpaid contributions in accordance with law, the people’s court shall support such request.”

The “Minutes of the National Conference on Civil and Commercial Trial Work of Courts” [Fa (2019) No. 254] stipulates: “6. Under the subscribed capital system, shareholders enjoy statutory time benefits. If a creditor requests that shareholders whose contribution deadlines have not yet arrived bear supplementary compensation liability for the company’s debts that cannot be repaid, on the ground that the company is unable to pay its due debts, the people’s court shall not support such a claim. However, the following circumstances are exceptions: (1) In cases where the company is the party subject to enforcement, and after the people’s court has exhausted all enforcement measures but found no assets available for execution, the company has already met the conditions for bankruptcy but has not filed for bankruptcy; (2) After the company’s debts have arisen, the shareholders’ (general) meeting of the company resolves or otherwise extends the deadline for shareholders’ contributions.”

“Answers to Difficult Legal Issues in Enforcement by the Shandong Provincial Higher People’s Court (No. 3)” (Published on December 22, 2020): “33. If a company shareholder who has not fully fulfilled his/her capital contribution obligation applies for adding such shareholder as an enforced party before the expiration of the subscribed capital contribution period, should the court support such application? Answer: According to the ‘Minutes of the National Courts’ Meeting on Civil and Commercial Trial Work’ [Fa (2019) No. 254], it is stipulated that ‘6. Under the subscribed capital system, shareholders enjoy statutory time benefits. If a creditor requests that a shareholder whose capital contribution period has not yet expired bear supplementary compensation liability within the scope of the unpaid contribution amount on the ground that the company cannot pay its due debts, the people’s court shall not support such request. However, the following circumstances are exceptions: (1) In cases where the company is the enforced party, the people’s court has exhausted all enforcement measures but found no assets available for execution, and the company has already met the conditions for bankruptcy but has not applied for bankruptcy; (2) After the company’s debt arises, the shareholders’ (general) meeting of the company resolves or otherwise extends the shareholders’ capital contribution period.’ Referring to the above-mentioned opinion, if a company shareholder has not fully fulfilled his/her capital contribution obligation and the subscribed capital contribution period has not yet expired, the court may not add such shareholder as an enforced party, except in the aforementioned exceptional circumstances.”

Article 2, Paragraph 1 of the Enterprise Bankruptcy Law of the People’s Republic of China provides: “If a corporate legal person is unable to pay its due debts and its assets are insufficient to cover all its debts or it clearly lacks the ability to pay, its debts shall be cleared in accordance with the provisions of this Law.” Article 1, Paragraph 1 of the Supreme People’s Court’s Provisions on the Application of the Enterprise Bankruptcy Law of the People’s Republic of China (I) stipulates: “If a debtor is unable to pay its due debts and meets any one of the following conditions, the people’s court shall determine that the debtor has grounds for bankruptcy: (1) its assets are insufficient to cover all its debts; (2) it clearly lacks the ability to pay.” Article 4 provides: “Even if a debtor’s book assets exceed its liabilities, if any of the following circumstances exist, the people’s court shall determine that the debtor clearly lacks the ability to pay: (1) due to severe lack of funds or inability to convert assets into cash, the debtor is unable to pay its debts; (2) the legal representative’s whereabouts are unknown and no other person is available to manage the debtor’s property, making it impossible to pay its debts; (3) despite compulsory enforcement by the people’s court, the debtor remains unable to pay its debts; (4) the debtor has sustained long-term losses and finds it difficult to turn its business around, making it impossible to pay its debts; (5) other circumstances that cause the debtor to lose its ability to pay.”

1. (2023) Supreme People's Court Min Shen No. 2920 (Judgment Date: December 13, 2023) The Supreme People's Court held: “...First, according to Article 17 of the ‘Provisions of the Supreme People's Court on Several Issues Concerning the Amendment and Addition of Parties in Civil Enforcement,’ if a for-profit legal person serving as the enforced party has insufficient property to satisfy the debts determined by the effective legal instrument, and the applicant for enforcement requests that shareholders, investors who have not yet paid their contributions or have not fully paid their contributions, or promoters who bear joint and several liability for such contributions under the Company Law, be added as the enforced party and held liable within the scope of their unpaid contributions in accordance with law, the people’s court shall support such request. In this case, Peng*’s capital contribution to a certain Xinxin Company was a subscribed contribution with a subscription deadline set for before December 31, 2037, and he transferred the equity involved in the case to Guan* in 2021. To date, the subscription deadline has not yet arrived. Under the subscribed capital system, shareholders enjoy statutory time benefits; failing to pay the contribution before the subscription deadline does not constitute a violation of the contribution obligation. Therefore, the phrase ‘not having paid or not having fully paid the contribution’ stipulated in the aforementioned provision does not cover the situation where shareholders have not yet paid their subscribed contributions because the subscription deadline has not yet arrived. Second, the addition of new parties as the enforced party in enforcement proceedings must follow statutory principles, meaning that any addition of an enforced party must be explicitly provided for by law or judicial interpretations. At present, there is neither law nor judicial interpretation that permits adding a shareholder as the enforced party on the ground that the shareholder’s subscribed contribution should be accelerated and become due before the subscription deadline has arrived. Therefore, regardless of whether the shareholder’s subscribed contribution deadline should be accelerated, the shareholder should not be directly added as the enforced party in the enforcement proceedings.”

2. In Case No. 4443 of the Supreme People’s Court’s Civil Application (2020), the Supreme People’s Court held: “The primary issue in the retrial review of this case is whether Yang should bear responsibility for the debts involved in the case of Zhongqing Huili Company within the scope of his unfulfilled capital contribution obligations. Article 1 of the ‘Provisions on Amendment and Addition’ provides: ‘During the execution process, the applicant for enforcement or their heirs or successors in rights may apply to the people’s court to amend or add parties. If the application meets the statutory conditions, the people’s court shall grant it.’ This provision clearly stipulates that any amendment or addition of parties in the execution procedure must follow statutory principles, and the grounds for such amendment or addition are strictly limited to circumstances explicitly prescribed by law and judicial interpretations, thereby clarifying the fundamental boundary between trial and execution and safeguarding the procedural rights of the parties. In this case, Li applied pursuant to Article 17 of the ‘Provisions on Amendment and Addition’ to add Yang, who had yet to make his capital contribution, as an enforced party. The phrase ‘shareholders who have not paid or have not fully paid their capital contributions’ in this article refers to shareholders who have failed to pay their subscribed capital contributions in full and on time. However, when Yang acquired the equity involved in the case on April 27, 2017, his deadline for making the capital contribution was January 1, 2044, and he thus enjoyed a legitimate time benefit for fulfilling his capital contribution obligation; therefore, he did not fall under the category of failing to pay his capital contribution in full and on time. Consequently, the original trial court’s rejection of Li’s claim was entirely appropriate.”

Cases holding this view include No. 5769 of the Supreme People's Court Min Shen (2020), No. 10546 of the Second Instance Civil Judgment of the People's Court of Jinan City, Shandong Province (2021), and No. 10546 of the Second Instance Civil Judgment of the People's Court of Jinan City, Shandong Province (2021), among others.

1. (2023) Yue 06 Min Zhong No. 10135 (Judgment Date: September 27, 2023) [One of the typical civil cases released by the Supreme People's Court in its crackdown on debt evasion through false litigation; included in the Case Database of the People's Courts (Database Entry No. 2025-07-2-472-001)] The trial court held: “Article 17 of the ‘Provisions of the Supreme People's Court on Several Issues Concerning the Amendment and Addition of Parties in Civil Enforcement’ provides: ‘If a for-profit legal person serving as the enforced party has insufficient property to satisfy the debts determined by the effective legal instrument, and the applicant for enforcement requests to change or add shareholders, investors who have not yet paid up their contributions or have not fully paid up their contributions, or promoters who bear joint and several liability for such contributions pursuant to the Company Law as the enforced party, and if these parties are liable within the scope of their unpaid contributions in accordance with law, the people’s court shall support such request.’ In this case, the articles of association of the enforced party, Company B, stipulated that the deadline for shareholders’ subscribed capital contributions was June 9, 2050, and shareholder Chen was entitled to the benefit of this extended deadline under the law. However, on April 18, 2022, the enforcing court found that Company B had no assets available for enforcement and was unable to pay off its outstanding debts, and accordingly ruled to terminate the current enforcement proceedings. As a result, the shareholders of Company B lost the benefit of the extended contribution deadline, and the contribution deadline should now be accelerated and become due immediately. Therefore, shareholder Chen of Company B, having failed to fully pay up his contribution, should be added as an enforced party and shall bear responsibility within the scope of his unpaid contributions in accordance with law.”

2. (2022) Lu Min Zhong No. 300 (Judgment Date: May 25, 2022) The Shandong Provincial Higher People’s Court held: “Regarding the question of whether shareholder Zhang can be added as an enforced party: Under the subscribed capital system, shareholders enjoy a statutory time benefit. However, in this case, the principal amount of debt that Mingmou Company, as the enforced party, is unable to repay has reached over 3.8 million yuan. The executing court has been unable to locate any executable assets belonging to Mingmou Company, such as vehicles, real estate, bank deposits, or marketable securities. In some cases, the court has already ruled to terminate the current enforcement proceedings. Moreover, Zhang has failed to submit any evidence demonstrating that Mingmou Company still possesses any executable assets. Therefore, this case falls under the category where the court has exhausted all available enforcement measures and the company has no assets available for execution. Although Zhang’s subscription period has not yet arrived, his statutory time benefit cannot impair the legitimate rights and interests of creditors. Hence, the original trial court’s finding that Zhang should bear supplementary compensation liability within the scope of his unfulfilled contribution for the debts that Mingmou Company is unable to repay is entirely justified.”

Cases holding this view include, among others, (2025) Jing 02 Min Zhong 14463, (2023) Hu Min Zhong 890, (2025) E Min Zai 24, (2021) Lu 01 Min Zhong 1350, (2024) Min Shen 5844, and (2024) Gui Min Zhong 88, dated May 16, 2024.

As revealed by the cases mentioned above, courts at various levels and in different localities currently hold differing views on whether shareholders whose capital contribution deadlines have not yet arrived can be added as judgment debtors in enforcement proceedings. Even within the same court, there are conflicting positions. For instance, in case No. (2023) Supreme People's Court Min Shen No. 2920 issued on December 13, 2023, the Supreme People's Court held that it is impermissible to accelerate the maturity of a shareholder’s contribution obligation and add such a shareholder as a judgment debtor. However, in one of the typical civil cases identified by the Supreme People's Court as part of its efforts to combat debt evasion through false litigation—and which has been included in the Supreme People's Court Case Database (Database Entry No. 2025-07-2-472-001)—the court took the opposite view, holding that “a shareholder’s benefit from the deferred payment term has been lost, and thus the contribution deadline should be accelerated.”

Article 33 of the “Answers to Difficult Legal Issues in Enforcement by the Shandong Provincial Higher People’s Court (No. 3)”—specifically, “33. If a company shareholder who has not fully fulfilled his/her capital contribution obligation applies to add that shareholder as an enforced party before the expiration of the subscribed capital contribution period, should the court support such application?”—has already clarified the special circumstances under which a shareholder whose capital contribution period has not yet expired may be added as an enforced party. However, within Shandong Province, courts still hold differing views on whether shareholders whose capital contribution periods have not yet expired can be added as enforced parties. For instance, in Case No. (2025) Lu 0103 Zhi Yi 418 of the People’s Court of Shizhong District, Jinan City, the court held that “shareholders are legally entitled to the benefit of time; failure to pay the capital contribution before the expiration of the contribution period does not constitute a breach of their capital contribution obligations.” In Case No. (2021) Lu 01 Min Zhong 10546 of the Jinan Intermediate People’s Court, the court ruled that “as long as the capital contribution period has not yet expired, the due date should not be accelerated.” In Case No. (2021) Lu 01 Min Zhong 1350, however, the court held that “after the people’s court has exhausted all enforcement measures and found no assets available for execution, and it has been determined that the company meets the conditions for bankruptcy, the due date should be accelerated.”

Meanwhile, we have also noted that, following the release on September 30, 2025, of the Supreme People's Court’s Draft Interpretation on Several Issues Concerning the Application of the Company Law of the People’s Republic of China, some courts still permit the addition of shareholders whose capital contribution deadlines have not yet arrived as judgment debtors. For example, case No. (2025) Jing 02 Min Zhong 14463 (judgment date: November 11, 2025); and case No. (2025) Xin 22 Min Zhong 817 (judgment date: December 15, 2025).

Currently, local courts hold differing views on whether to add shareholders whose capital contribution deadlines have not yet arrived as judgment debtors in enforcement proceedings. Given that the “Interpretation (Draft for Comments) of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of the People’s Republic of China” has not yet taken effect, it is advisable—while taking into account local judicial trends—to carefully weigh the litigation costs and time costs and make a reasoned decision on whether to add such shareholders as judgment debtors during the enforcement process. Meanwhile, Article 21 of the “Notice of the Supreme People’s Court on Issuing the ‘Work Procedures for the Construction and Operation of the Case Database of the People’s Courts’” stipulates: “When people’s courts at all levels hear cases and refer to similar cases already included in the database, they may cite the reasoning and key points of judgment from those similar cases as considerations and grounds for their own judgments; however, such cases shall not serve as the basis for the judgment itself... If the prosecution agency, parties, their defense attorneys, or litigation agents submit cases included in the database as arguments for prosecution or defense, the people’s court shall respond to these submissions in the reasoning section of its judgment.” Therefore, when representing similar cases, counsel should include the case from the People’s Courts Case Database (Database Entry No. 2025-07-2-472-001) as an argument for prosecution or defense, requesting the court to address it explicitly. At the same time, this case can be used as a reference for similar cases to enhance the likelihood of successfully adding the shareholder as a judgment debtor.

“Decision of the Supreme People’s Court on Amending the ‘Provisions on Causes of Action in Civil Cases’” (Fa [2025] No. 226) (effective January 1, 2026), Article 54: “Under the third-level cause of action ‘293. Disputes over Shareholders’ Capital Contributions’: Add (1) disputes over shareholders’ failure to fully perform their capital contribution obligations; (2) disputes over shareholders’ withdrawal of contributed capital; (3) disputes over the acceleration of the maturity of shareholders’ capital contributions.”

Before the “Decision of the Supreme People’s Court on Amending the ‘Provisions on Causes of Action in Civil Cases’” (Fa [2025] No. 226) took effect on January 1, 2026, lawsuits seeking to accelerate the maturity of shareholders’ capital contributions were typically categorized under the cause of action “Disputes over Shareholders’ Damage to Creditors’ Interests.” Under this cause of action, the courts with jurisdiction usually relied on Article 24 of the Interpretations of the Civil Procedure Law, which stipulates that jurisdiction lies with the court at the place where the tort occurred (including both the place where the tort was committed and the place where the tortious result occurred) or the court at the defendant’s domicile. According to this provision, the court at the plaintiff’s domicile could also exercise jurisdiction. However, after the “Decision of the Supreme People’s Court on Amending the ‘Provisions on Causes of Action in Civil Cases’” (Fa [2025] No. 226) took effect on January 1, 2026, disputes over the acceleration of shareholders’ capital contribution maturity will be classified under the cause of action “Shareholders’ Capital Contribution Disputes,” thereby leading to a change in the court with jurisdiction. For example, in case (2025) Shaanxi 01 Min Xie Zhong No. 139, the court held: “This case involves a claim that shareholders whose capital contribution deadlines have not yet arrived shall bear supplementary compensation liability within the scope of their unfulfilled capital contributions for the company’s debts that cannot be repaid. This constitutes a request for accelerating the maturity of shareholders’ capital contributions. Essentially, the filing of this lawsuit is a demand that shareholders fulfill their capital contribution obligations. Therefore, the cause of action in this case should be determined as a ‘Shareholders’ Capital Contribution Dispute.’ Article 27 of the ‘Civil Procedure Law of the People’s Republic of China’ provides that lawsuits arising from disputes related to the establishment of a company, confirmation of shareholder qualifications, distribution of profits, dissolution, and the like shall be under the jurisdiction of the people’s court at the company’s domicile. According to Article 3 of the ‘Interpretations of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China,’ the domicile of a legal person or other organization refers to the location of its principal office. If the location of the principal office of a legal person or other organization cannot be determined, then its registered or incorporated place shall be deemed its domicile. Accordingly, based on the above provisions, this case should be under the jurisdiction of the people’s court at the company’s domicile.”