Recently, the Third Intermediate People's Court of Beijing held a press briefing on legal risk reminders and typical cases of corporate governance under the provisions of the New Company Law on "limited subscription of registered capital", focusing on the impact of the "limited subscription of registered capital" provisions of the new company law on companies and shareholders, summarizing the relevant cases heard from 2021 to 2023, and selecting ten typical cases related to corporate governance for release.
The following are typical cases related to enforcement objections involving additional shareholders.
Case 2: If the capital contribution is made with non-monetary property, the valuation shall be assessed in accordance with the law and the formalities for changing the ownership shall be carried out
-- Company A, Guo and Company B filed an objection lawsuit
[Basic facts of the case]
In January 2019, the court ruled that Company B should return more than 340 yuan of the principal, interest and investment income of Company A's investment funds. Later, because Company B had no property available for enforcement, Company A applied for the addition of Guo as the person subject to enforcement on the grounds that Guo, a shareholder of Company B, had not paid in the capital of 4 million yuan, and assumed the responsibility for repaying the debts of Company B.
After investigation, the registered capital of Company B was 2 million yuan when it was established in 2010, of which Guo and Zhao contributed 1 million yuan in currency. In June 2014, the registered capital of Company B increased to 10 million yuan, and among the new contributions, Guo and Zhao contributed 4 million yuan respectively with the same intellectual property rights.
【Effective Judgment】
In this case, the Asset Appraisal Report stated that "on the appraisal reference date, the market value of the entrusted intellectual property rights under the assumption of going concern was RMB 8 million", and the Capital Verification Report stated that "shareholder Guo contributed RMB 4 million with an intellectual property right and Zhao contributed RMB 4 million with an IP property...... and the above-mentioned intellectual property rights had completed the property transfer procedures in June 2014 and the ownership had been transferred to Company B. The above evidence can preliminarily prove that the 8 million yuan involved in the case has been paid. Company A believed that the intellectual property contribution of 8 million yuan was a malicious and false capital contribution by Guo, but did not provide contrary evidence to overturn the above-mentioned Asset Appraisal Report and Capital Verification Report, and its claim that Guo made a malicious and false capital contribution and requested that Guo be added as the person subject to enforcement to be liable for the debts of Company B could not be established, so the court ruled to reject Company A's claim.
【Legal Notice】
Article 48 of the New Company Law stipulates that shareholders may make capital contributions in monetary terms, as well as non-monetary assets such as physical objects, intellectual property rights, land use rights, equity rights, creditor's rights, etc., which can be valued in monetary terms and can be transferred in accordance with the law. Compared with the current Company Law, equity and debt have been added as a form of enumeration of non-monetary property contributions. Diversified forms of capital contribution have the effect of encouraging investment, but non-monetary assets used for capital contribution should meet certain conditions, that is, they can be valued in currency and can be transferred in accordance with the law, and are not prohibited by laws, administrative regulations and the articles of association of the company.
If the capital contribution is made with non-monetary assets, it can also be subscribed, and the actual value shall be subject to the appraisal results when the non-monetary property is actually delivered to the company. However, in the absence of a separate agreement, the company, other shareholders or creditors of the company have no right to require the contributor to "make up" the capital contribution liability even if the value of the contributed property is depreciated due to market changes or other objective factors. Considering that most non-monetary assets have the risk of depreciation and damage, it is recommended that shareholders who make capital contributions with non-monetary assets should evaluate the valuation and go through the procedures for changing ownership as soon as possible in accordance with the law to complete the paid-in obligation.
Case 5: If the registration of the equity transfer has not been changed, it shall not be used against a bona fide third party, and the transferor shall still be liable within the scope of the registered equity
-- Cui's lawsuit against Company A and Company B for the addition and change of the person subject to enforcement
[Basic facts of the case]
In January 2022, the court ordered Company B to pay Cui more than 260,000 yuan. Since Company B had no property to be enforced, Cui sued the court to request that Company A, a shareholder of Company B, be added as the person subject to enforcement, and bear supplementary liability for the debts of Company B within the scope of the unfunded capital of 19.9 million yuan. In the lawsuit, Company A submitted an equity transfer agreement, claiming that it had transferred its shares in September 2021 and currently only holds 10% of the shares, with an unpaid capital contribution of 200,000 yuan, but it has not yet changed its industrial and commercial registration and should not be liable within the scope of 19.9 million yuan.
【Effective Judgment】
If Company B is still unable to pay off the debts determined by the effective judgment after the enforcement procedure and has no property to be enforced, Company A, as a shareholder of Company B's industrial and commercial registration, shall accelerate the maturity of its capital contribution and bear supplementary liability for the debts that Company B cannot pay off within the scope of the unpaid capital contribution. Although Company A claimed the equity transfer, it did not change its industrial and commercial registration and did not pay the consideration, and its equity transfer agreement did not have the effect against external creditors, so the court ruled that Company A should bear supplementary liability for the part of Company B's debts that could not be discharged within the scope of its unfunded capital of RMB 19.9 million.
【Legal Notice】
After the equity transfer agreement takes effect, the transferee does not automatically obtain the qualification of a shareholder, and the equity transfer does not automatically become effective against a bona fide third party. Generally speaking, when the name or title of the transferee is recorded in the register of shareholders, the transferee can claim the exercise of shareholder rights against the company after obtaining the qualification of a shareholder;
The New Company Law further expands the freedom of equity transfer, abolishing the requirement that shareholders should obtain the consent of more than half of the other shareholders when transferring equity to persons other than shareholders, but retains the provisions that the shareholders of the company enjoy the right of first refusal.
Case 10: If the company is registered through the simplified cancellation procedure, the shareholders who made the false promise shall be jointly and severally liable for the debts of the company before the cancellation
-- Tong and Zhang's lawsuit against the execution of the executor's application
[Basic facts of the case]
Tong is an employee of Company A, and in January 2020, after labor arbitration, Company A should pay Tong more than 20 yuan in subsidies. In March 2020, Zhang, a shareholder of Company A, issued a letter of commitment to the Market Supervision Bureau, promising that the company belonged to the situation that "no claims and debts have occurred before the company was deregistered/the claims and debts have been liquidated", and the company was deregistered through the simplified cancellation procedure. Now, because Company A has no property available for enforcement, Tong requested that Zhang, a shareholder be added, as the person subject to enforcement, and bear joint and several liability for the debts incurred by Company A.
【Effective Judgment】
If a company that is the party subject to enforcement goes through the process of deregistration without liquidation, resulting in the inability of the company to be liquidated, and the applicant for enforcement applies to change or add the shareholders of a limited liability company, the directors and the controlling shareholder of a company limited by shares as the person subject to enforcement, and bears joint and several liability for the company's debts, the people's court shall support it. In this case, Company A went through the deregistration without liquidation, resulting in the company being unable to liquidate, and Zhang, as a shareholder of Company A, should be jointly and severally liable for the debts of Company A, so the court ruled to add Zhang as the person subject to enforcement and bear joint and several liability for the debts of Company A.
【Legal Notice】
The simplified deregistration greatly facilitates the withdrawal of market entities that have not opened for business or have no creditor's rights and debts, and the company promises to the registration authority at the time of deregistration that the company has not incurred claims and debts before the cancellation of registration or has completed the liquidation of the creditor's rights and debts before the simplified deregistration procedure can start the simplified deregistration procedure, but there are also situations where the simplified deregistration procedure is used to maliciously deregister the company to evade debts. In current judicial practice, in accordance with Article 21 of the Provisions of the Supreme People's Court on Several Issues Concerning the Alteration and Addition of Parties in Civil Enforcement, the additional shareholder is the person subject to enforcement and is jointly and severally liable for the company's debts.
Article 240 of the New Company Law stipulates that if a company has not incurred debts or has paid off all its debts during its existence, it may cancel the company's registration through simplified procedures with the commitment of all shareholders, but if the promise is untrue, the shareholders shall be jointly and severally liable for the debts before the deregistration. It is consistent with the current view of judicial practice. Therefore, although the company may choose to apply the general deregistration procedure or the simplified deregistration procedure, if the company's debts have not been discharged, it should be liquidated in accordance with the general deregistration procedure. Otherwise, the shareholders shall be jointly and severally liable for the debts of the company before the cancellation in accordance with the law.