150 adjudication rules for corporate disputes

150 adjudication rules for corporate disputes

01. Adjudication rules related to equity transfer (19 rules)

1. If a shareholder of a limited liability company transfers equity to an external party, the preemptive right of other shareholders shall be protected - Beijing No. 1 Intermediate People's Court released the third of the 14 typical cases of corporate disputes: the case of equity transfer dispute between Zhang San and Company A

2. Analysis of the effectiveness of the company's guarantee for the payment of equity transfer money between shareholders - the second of the top ten commercial cases of the people's court in 2019: Zhang San v. Li Si, a case of equity transfer dispute of company A

3. Under the condition that the subject of mining rights is not changed, and the ownership of mining rights and prospecting rights is not changed, it is not appropriate to regard the equity transfer as a disguised transfer of mining rights - the Supreme People's Court released 10 typical cases of the people's courts to serve and guarantee the construction of ecological civilization in the new era: Company A et al. v. Company B Equity Transfer Dispute Case

4. There are obvious differences between the mining right transfer contract and the equity transfer contract of the mining enterprise in terms of the subject of the contract, the subject matter of the contract, and even the content of the contract - the Supreme People's Court issued the seventh of the ten typical cases of hearing civil disputes over mining rights: the case of equity transfer contract disputes between Zhang San and four others and Company A and Company B

5. The equity transferor has the right to file a lawsuit for equity change registration -- Xiamen Intermediate People's Court of Fujian Province issued 10 typical cases of 15 typical cases for the protection of small and medium-sized investors: a dispute between company A and company B requesting to change the registration of the company

6. The agreement in the equity transfer contract to pay the equity transfer money with the company's assets is invalid - the seventh of the top ten cases tried by the company of Jiangsu Court: the case of equity transfer dispute between Zhang San and Li Si

7. The shareholder's obligation to contribute capital is a statutory obligation, and after the equity transfer, the company can choose to claim rights from either of the two, or require the two to bear joint and several liability - the second of the top ten cases of the company trial by the Jiangsu court: the case of capital contribution dispute between company A and Zhang San

8. If the value of the transferred equity is not evaluated, but the parties reach an agreement on the transfer price, it shall be performed as agreed - the Intermediate People's Court of Nanyang City, Henan Province released the ninth of the top ten typical cases of small and medium-sized investor protection in 2021: the equity transfer dispute between Company A, Zhang San and Company B

9. The payment of taxes and the equity transfer money are not the priority obligations agreed upon by both parties in the contract, and it is inconsistent with the law to assert the right to defend against uneasiness due to its failure to perform its obligations - China's 2019 "Influential Tax Judicial Trial Case" No. 7: A and Zhang San's Equity Transfer Dispute Case

10. The right to terminate the equity transfer agreement shall be exercised within a reasonable period of time -- Beijing Third Intermediate People's Court released the twelfth of the 20 typical cases of corporate disputes: Zhang San v. Li Si et al., a case of equity transfer disputes

11. The law only protects legal risks but does not protect commercial risks, and commercial risks are borne by oneself -- 2019 Reference Case No. 20 of the Sixth Circuit Court of the Supreme People's Court: Zhang San v. Company A, a case of equity transfer contract

12. The capital contribution period of the subscribed equity at the time of the shareholder's equity transfer has not expired, and the shareholder shall not be liable for the company's debts - 2019 Reference Case No. 17 of the Sixth Circuit Court of the Supreme People's Court: Zhang San v. Company A, Li Si and Wang V, a dispute over an equity transfer contract

13. For a continuous contract with a long term, if there are obstacles and risks to performance, the parties should strive to maintain the safety and stability of market transactions in accordance with the principle of good faith, and cannot unilaterally terminate the contract in order to pass on and reduce their own business risks

14. Three Substantive Differences Between Equity Transfer and Asset Transfer -- The Fourth of the Top Ten Typical Cases Tried by Zhejiang Courts in 2013 in Cases Involving Enterprises: Zhang San and Company A, and the third party Li Si and Wang Wu requested a dispute over the change of company registration

15. If only the transfer of the company's equity does not lead to the change of the subject of the mining right, it does not belong to the transfer of the mining right - Civil Judgment of the Supreme People's Court|(2015) Min Er Zhong Zi No. 236 A Company, Company B, Company C and Company D Equity Transfer Dispute Case

16. The receipt alone is not sufficient to fully prove the actual capital increase, and the people's court should also make a comprehensive judgment on whether the actual receipt and payment should be determined -- the case of capital increase dispute between Zhang San and Company A and Li Si Company in the Gazette of the Supreme People's Court, Issue 8, 2017 (Issue 250).

17. The relationship between the obligation to report for approval of equity transfer and the liability for negligence in contracting - a dispute over the equity transfer between Company A and the Finance Bureau of Company B, Gazette of the Supreme People's Court, No. 12, 2017 (No. 254).

18. The spouse of the legal transfer of equity between shareholders has no right to claim revocation - the Provincial Court and the Provincial Women's Federation jointly released the third of the top ten typical cases of marriage and family in Jiangsu courts in 2019: Zhang San v. Li Si, a dispute over equity transfer

19. Where there is a breach of contract such as delay or refusal to pay by the equity transferee in the transfer of equity in installments of a limited liability company, and the equity transferor requests to terminate the equity transfer contract signed by the two parties, Article 167 of the Contract Law of the People's Republic of China - Guiding Case No. 67, Zhang San v. Li Si, a dispute over equity transfer, does not apply

02. Adjudication Rules Related to Shareholder Qualification, Proxy Holding, and Removal of Names (14 Rules)

1. The dismissal of shareholders by resolution of the shareholders' meeting of a limited liability company shall meet three conditions - the fifth of the top ten typical cases of optimizing the business environment in 2020 by Xi'an courts: Company A v. Zhang San and Li Si, a dispute over a request to change the company's registration and disqualify shareholders

2. If the actual investor requests the company to change its shareholders and register with the company registration authority, it must obtain the consent of more than half of the other shareholders of the company - the Intermediate People's Court of Jinan City, Shandong Province released the fourth of the top ten typical cases of corporate disputes from 2016 to 2020: Zhang San v. Company A and Li Si The Case of Shareholder Qualification Confirmation Dispute

3. More than half of the other shareholders of a limited liability company are aware of the identity of the actual investor and have no objection to the exercise of their shareholder rights, and the actual investor's request for confirmation of the identity of the shareholder should be supported - the Intermediate People's Court of Nanyang City, Henan Province released one of the top ten typical cases of minority investor protection in 2021: the dispute between Company A and Zhang San over the confirmation of shareholder qualifications

4. The act of holding shares in a listed company under the name of a person should be found to be invalid - 10 of the top 10 financial and commercial trial cases of Shanghai courts in 2018, and 11 of selected financial and commercial trial cases of Shanghai courts (2011-2019): Zhang San v. Li Si, a dispute over equity transfer

5. Equity disputes arising from cooperative development. To determine whether the Memorandum has contractual effect, a comprehensive judgment should be made based on the background of its formation, the literal record, the signature and seal, and other circumstances. If it meets the requirements for the formation and effectiveness of the contract, it will be legally binding on all parties - Shanghai Putuo District People's Court Top 10 Typical Cases of Commercial Disputes of Private Enterprises: Company A v. Company B and Company C over Equity Transfer Disputes

6. Bona fide acquisition of equity holding on behalf of Shanghai No. 2 Intermediate People's Court - Typical Case No. 2 of Equity Holding Dispute No. 2 of Shanghai No. 2 Intermediate People's Court: Zhang San v. Li 4 and Wang 5 Requesting Confirmation of the Invalidity of the Equity Transfer Contract

7. If the investor claims to return the capital contribution, if the parties have expressed their intention to increase the capital, and the subscriber has completed the obligation to increase the capital but has not obtained the shareholder qualification, the judgment should be made to support the claim - Beijing Third Intermediate People's Court released the third of the 20 typical cases of corporate disputes: Company A v. Company B, Zhang San et al., a case of new capital subscription disputes

8. The original shareholder requests the restoration of his shareholder qualification only on the basis of the effective document confirming the invalidity of the equity transfer agreement with the transferee and cannot support the repeated transfer of equity and the change of industrial and commercial registration - the Intermediate People's Court of Jinan City, Shandong Province released the sixth of the top ten typical cases of corporate disputes from 2016 to 2020: Zhang San v. Company A, a dispute over the confirmation of shareholder qualifications

9. In the absence of an equity holding agreement, the determination of the qualification of an anonymous shareholder shall be based on comprehensive consideration of whether there is an agreement on the holding of shares on behalf of the shareholder, whether the shareholder's rights have actually been exercised, and whether other shareholders are aware of it

10. To obtain shareholder qualifications, substantive and formal requirements are required, the substantive elements are to subscribe for capital contribution as a necessary condition for obtaining shareholder qualifications, and the formal requirements are the record and proof of shareholders' capital contributions--2019 Reference Case No. 18 of the Sixth Circuit Court of the Supreme People's Court: Zhang San v. Company A and other shareholder qualification confirmation disputes

11. Defective capital contributions such as false capital contributions or evasion of funds by shareholders do not affect the establishment and enjoyment of equity - Reference Case No. 17 of the Sixth Circuit Court of the Supreme People's Court in 2019: Zhang San v. Company A, Li Si and Wang 5, a dispute over an equity transfer contract

12. Under the circumstance that the registered capital of the company meets the statutory requirements, the actual amount of capital contribution and the proportion of equity held by each shareholder shall belong to the scope of the company's shareholder autonomy - Civil Judgment of the Supreme People's Court (2011) Min Ti Zi No. 6 A Company and Company B, Company C and Company D Equity Confirmation Dispute Case

13. False capital increase is invalid. Without the approval of the company's effective shareholders' meeting, others falsely increase capital to the company to "dilute" the shares of the company's original shareholders, and the act damages the legitimate rights and interests of the original shareholders, even if the capital contribution has been filed and registered by the administrative organ for industry and commerce, it should still be deemed invalid, and the company's original shareholders' equity ratio should remain unchanged - Gazette of the Supreme People's Court, Issue 5, 2015 (Issue 223), Zhang San v. Li Si et al., a case of confirmation of shareholder qualifications

14. Analysis of the Effect of Retention of Shares by Persons – Guiding Case No. 96, Zhang San v. Company A, a Dispute over the Confirmation of Shareholder Qualifications

03. Adjudication Rules Related to the Validity of Resolutions (21 Rules)

1. The resolution of the shareholders' meeting that caused the company to lose the property rights of the legal person and the independent status of the legal person was invalid -- the People's Court of Chaoyang District, Beijing issued the fourth of the ten typical cases on the protection of the rights of small and medium-sized shareholders: the plaintiff Zhang San sued the defendant enterprise A for the invalidity of the resolution of the company

2. Whether the reasons on which the board of directors relied for dismissal or appointment are established is not within the scope of judicial review -- Sichuan High People's Court released for the first time the sixth typical case of commercial trial: Company A v. Company B, a dispute over the revocation of the resolution of the board of directors

3. The people's court determines the validity of the resolutions of the shareholders' meeting and the board of directors of a cross-border company in accordance with the law, respects the company's autonomy of will, and protects the rights of the company's shareholders -- The Guangdong Provincial High People's Court issued 20 typical cases of service protection for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area: the determination of the validity of the resolution of the board of directors of company A

4. Clearly failing to fulfill the duty of reasonableness and prudence by mailing the notice of the meeting only to the address of his ID card when he was clearly detained--The High People's Court of Guangdong Province issued the fourth of the top ten typical cases of strengthening the judicial protection of the private economy: the case of Zhang San and Company A's dispute over liability for harming the interests of shareholders

5. The resolution of the shareholders' meeting made by the company without fulfilling its notification obligation in accordance with the law cannot be established - the Intermediate People's Court of Nanyang City, Henan Province released the fifth of the top ten typical cases of small and medium-sized investor protection in 2021: the dispute over the validity of the resolution of Company A, Zhang San, Li Si and Wang Wu

6. Failure to receive the notice of convening the shareholders' meeting and failure to attend the shareholders' meeting, the shareholders' meeting procedures are flawed, and the content of the shareholders' meeting resolution also has a substantial impact on the shareholders' rights and interests -- Chongqing Court's fifth of the seventh batch of ten typical cases of judicial protection of the private economy: a dispute over the resolution of a company and a company B

7. Participating in the meeting but being denied entry to the venue, resulting in the inability to express opinions on the proposal and the deprivation of its voting rights -- The Intermediate People's Court of Suzhou Municipality, Jiangsu Province released the third of the eight typical cases of protecting the legitimate rights and interests of small and medium-sized investors: Zhang San v. Enterprise A The case of revocation of the validity of the company's resolution

8. The basis of the establishment of the company, that is, the equity structure formed by the agreement of all parties, cannot be changed by the majority of shareholders, and the remaining assets cannot be distributed to individual shareholders in disguised form through capital reduction without liquidation - Shanghai No. 1 Intermediate People's Court and Shanghai Pudong Court jointly issued the third of the ten typical cases of judicial protection in the free trade zone: Zhang San v. A company resolution dispute

9. The resolution of the shareholders' meeting involved in this case failed to indicate the proposer and matters to be discussed in convening the extraordinary shareholders' meeting, but directly listed the results of the resolution of the shareholders' meeting and mailed it to the shareholders, and the convening procedure and resolution method of the meeting violated the provisions of the Company Law - the Intermediate People's Court of Zaozhuang City, Shandong Province issued the second of eight typical cases for the protection of small and medium-sized investors: Zhang San and Li Si v. Company A for a dispute over the validity of the company's resolution

10. Invalidity of Resolutions Impairing the Preferential Subscription Rights of Minority Shareholders -- The People's Court of Chaoyang District, Beijing Municipality issued the sixth of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: a dispute over the validity of the resolution of the plaintiff company A v. the defendant enterprise B

11. Matters agreed by all shareholders in writing may not be convened to convene a shareholders' meeting -- Beijing Chaoyang District People's Court released the seventh of the ten typical cases on the protection of the rights of small and medium-sized shareholders: the judgment result of the dispute over the confirmation of the validity of the resolution of the plaintiff Zhang San against the defendant enterprise A

12. In addition to the number of voting rights, it is necessary to consider other substantive factors involving the balance of interests of small and medium-sized shareholders in the determination of "minor procedural defects" and "substantive impact", that is, whether the procedural defects will cause each shareholder to be unable to participate in the formation of the majority intention fairly and obtain the necessary information for this as the criterion. In terms of the burden of proof, since it is the obligation of the company to convene a shareholders' meeting and make a resolution in accordance with the legal procedures, the company should bear the burden of proof when the resolution procedure of the shareholders is illegal——The Intermediate People's Court of Xiamen City, Fujian Province issued the seventh of the 15 typical cases for the protection of small and medium-sized investors: the case of Zhang San and Company A, a third party and Company B, and other companies in the case of revocation of resolutions

13. Failure to reasonably perform the reminder procedure, and the decision to remove the company made in violation of legal procedures is not established -- Beijing Third Intermediate People's Court released 8 typical cases of 20 corporate disputes: Company A v. Company B, a dispute over the validity of the corporate resolution

14. Although the signature is forged, the resolution that can prove that it is the true expression of the shareholder's intention does not become untenable -- the Beijing Third Intermediate People's Court released the seventh of the 20 typical cases of corporate disputes: Zhang San v. A Company A Company Resolution Confirmation Dispute

15. There are defects in the convening procedure of the shareholders' meeting, which makes the shareholders unable to effectively exercise their shareholder rights and damages the legitimate rights and interests of the shareholders, and the defect is not a minor defect, so the resolution should be revoked - The People's Court of Chaoyang District, Beijing Municipality issued the fifth of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: the plaintiff company A sued the defendant company B in a dispute over the revocation of the resolution of the company

16. Whether and how to increase the company's capital and shares is the scope of the company's autonomy, and there is no clear prohibition in the law - 2019 Reference Case No. 19 of the Sixth Circuit Court of the Supreme People's Court: Zhang San v. Li Si et al., a dispute over liability for damages for abuse of shareholder rights

17. Except for the circumstances stipulated by law or other reasonable and urgent reasons that require the modification of the capital contribution period, the resolution of the shareholders' meeting to modify the capital contribution period shall be unanimously passed by all shareholders - the resolution dispute between Zhang San and Company A, Li Si and other companies in the Gazette of the Supreme People's Court in Issue 3 of 2021 (total No. 293).

18. For a lawsuit filed by a party who no longer has the qualifications of a shareholder of the company and the position of a director or supervisor at the time of filing the lawsuit, the people's court shall examine whether it meets the requirements for litigation such as having a direct interest in the case in accordance with the provisions of Article 119 of the Civil Procedure Law - Gazette of the Supreme People's Court, Issue 7, 2019 (Issue 273) Zhang San v. Company A and Li Si, a company-related dispute case

19. The shareholders' meeting of the company made a resolution to appoint an employee representative supervisor, and if the appointed supervisor is not an employee of the company, the content of this part of the resolution shall be invalid - Gazette of the Supreme People's Court, Issue 11, 2019 (Issue 277), a dispute over the validity of the resolution of Company A v. Company B

20. Whether the facts on which the resolution to dismiss the general manager is based are true and whether the reasons are valid are not within the scope of judicial review -- Guiding Case No. 10, Zhang San v. Enterprise A, a dispute over the revocation of the resolution

21. The resolution of the shareholders' meeting signed by the controlling shareholder whose voting rights meet the requirements for passing the resolution without convening the shareholders' meeting shall be deemed to be unestablished - the sixth of the top ten cases of the company trial by the Jiangsu court: the case of Zhang San and Company A and other companies dissolution dispute

04. Adjudication rules related to capital contribution, financing, withdrawal of capital contribution, and accelerated maturity (7 rules)

1. Judging whether shareholders have withdrawn capital contributions based on whether shareholders' behaviors have eroded the company's assets -- Xiamen Intermediate People's Court of Fujian Province released the third of 15 typical cases for the protection of small and medium-sized investors: a case of disputes over the interests and responsibilities of creditors such as Company A and Company B, Zhang San, etc

2. If the shareholder cannot provide evidence that there is a legitimate reason for the transfer of the capital contribution to the company's account and then the transfer out after capital verification, it shall be deemed to constitute a withdrawal of capital contribution - Beijing Third Intermediate People's Court released the second of 20 typical cases of corporate disputes: Company A v. Zhang San, a shareholder capital contribution dispute

3. Shareholders cannot refuse to fulfill their capital contribution obligations on the grounds that other shareholders have not made capital contributions - the Intermediate People's Court of Nanyang City, Henan Province released the third of the top ten typical cases of small and medium-sized investor protection in 2021: Zhang San, Li Si, Wang Wu and Company A's shareholder capital contribution dispute

4. The fund's investment in the target company through capital increase, year-by-year exit and repurchase mechanism is a common transaction mode for the fund as a financial investor, which is in line with commercial practice - 2019 Reference Case No. 21 of the Sixth Circuit Court of the Supreme People's Court: Company A v. Company B and the People's Government of C over equity transfer

5. If the establishment of the company fails, the investor can request the return of the investment money after consensus - the Intermediate People's Court of Nanyang City, Henan Province released the sixth of the top ten typical cases of small and medium-sized investor protection in 2021: the establishment dispute case of Zhang San, Li Si and Wang Wu

6. There is no mandatory provision in the Company Law that all shareholders' investment in the company must be included in the company's capital. For the rights and obligations of some shareholders based on their intangible assets such as "star value", "human capital", "labor input" and "technical support" as stipulated in the cooperation agreement between shareholders, if the relevant rights and obligations of the "intangible assets" are not used as the company's authorized capital, the investment of "intangible assets" between shareholders is not necessary whether they can be transferred or whether they have been evaluated as intangible assets. The Third Intermediate People's Court of Beijing released the sixth of 20 typical cases of corporate disputes: Zhang San and Enterprise A, a dispute over the validity of corporate resolutions

7. If the company has no property available for enforcement and has the cause of bankruptcy but does not apply for bankruptcy, the shareholder's subscribed capital contribution should accelerate the maturity - the People's Court of Tongzhou District, Beijing Municipality released the eighth of nine typical cases of commercial disputes of private enterprises in the sub-center: Company A v. Zhang San and Li Si, a case of disputes over the liability of shareholders for harming the interests of the company's creditors

05. Adjudication rules related to the company's capital reduction and capital increase (4 rules)

1. If the capital is reduced without the above-mentioned legal procedures, the company's capital is still determined by the registered capital registered with the industrial and commercial department - 2019 Reference Case No. 18 of the Sixth Circuit Court of the Supreme People's Court: Zhang San v. Company A and other shareholder qualification confirmation disputes

2. The creditors of the company cannot be held liable for the creditor's rights arising from the transactions with the company before the capital increase - the Intermediate People's Court of Jinan City, Shandong Province released the ninth of the top ten typical cases of corporate disputes in 2016-2020: the case of liability dispute between company A and Zhang San and other shareholders for harming the interests of the company's creditors

3. The intellectual property rights involved in the case are valid at the time of capital increase, and are of considerable value after being evaluated by a professional capital verification agency. In the subsequent operation of the company, the intellectual property rights involved in the case were declared invalid, and the company requested the shareholders to fulfill the obligation to make up the capital contribution and bear the liability for compensation, and the company's senior executives to bear joint and several liability. Since the company failed to submit evidence to prove that the shareholders had bad faith in making capital contributions, and there was no agreement between the two parties that they needed to make additional capital contributions after the capital contribution was made by intellectual property rights, according to the above-mentioned legal provisions, the shareholders did not bear the responsibility to make up the capital contributions, and the company's request lacked legal basis and should be dismissed - the Sixth Circuit Court of the Supreme People's Court 2019 Typical Reference Case No. 3: Company A and Company B, Zhang San, and Li Si Company Capital Increase Dispute

4. When handling relevant cases, the people's court should limit the reasonable period for the exercise of the right and refuse to support the claim of exercising the right of first refusal beyond the reasonable period - Civil Judgment of the Supreme People's Court|(2010) Min Ti Zi No. 48 Company A and Zhang San v. Company B, a dispute over the validity of the resolution of the shareholders' meeting and the company's capital increase

06. Adjudication rules related to VAM (5 rules)

1. The validity of a VAM agreement that does not violate the mandatory provisions of laws and regulations shall be determined in accordance with the law -- Beijing No. 1 Intermediate People's Court released the second of the 14 typical cases of corporate disputes: the case of capital increase dispute between Company A and Zhang San

2. The agreement between the shareholders and the company on the "VAM" enables the shareholders' investment to obtain relatively fixed income, which is detached from the company's operating performance and harms the interests of the company's creditors and the company's creditors, and this part of the clause is invalid - Fujian Court 2015 Top Ten Typical Cases Release No. 6: A Partnership and Defendant Zhang San and B Enterprise Company Capital Increase Dispute Case

3. The "VAM agreement" between shareholders is valid, and the exercise of the right of redemption should be supported -- Tianjin Court Service Guarantee Beijing-Tianjin-Hebei Coordinated Development Typical Case No. 5: A Company A and Zhang San, Li Si, Wang Wu and B Partnership Equity Transfer Dispute Case

4. The internal order agreement between shareholders on the distributable profits of shareholders belongs to the scope of internal autonomy of the company and is not necessarily invalid. The agreement between the investor and the shareholders of the company that "the investment company shall give priority to other shareholders in the distribution of shareholders" is an expression of unanimous intention among the shareholders on the order of distribution, which does not violate the provisions of Article 186 of the Company Law and should be valid. Private fund agreements usually stipulate restrictive clauses on equity such as equity co-sale rights, anti-dilution rights, and preferential liquidation rights, which are unanimous expressions of intent among shareholders and should not be found invalid if they do not violate other mandatory laws and regulations

5. The compensation commitment of the shareholders of the target company to the investors does not violate the prohibitions of laws and regulations and is valid——The Gazette of the Supreme People's Court, No. 8, 2014 (No. 214), a case of capital increase dispute between Company A, Company B, Company C and Zhang San

07. Adjudication Rules Related to Shareholders' Right to Know (16 Rules)

1. In the presence of the shareholder, it can be assisted by accountants, lawyers and other intermediary practitioners who have confidentiality obligations in accordance with the law or in accordance with the code of practice - the Intermediate People's Court of Jinan City, Shandong Province released one of the top ten typical cases of corporate disputes from 2016 to 2020: the case of Zhang San and the dispute over the right to know of the shareholders of Company A

2. The company shall bear the burden of proof for the defense that the shareholders have an improper purpose in inspecting the accounting books -- the People's Court of Chaoyang District, Beijing Municipality released the third of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: the plaintiff Zhang San v. the defendant Company A shareholders in a dispute over the right to know

3. Shareholder identity is a necessary subject element for exercising shareholders' right to know -- Beijing Chaoyang District People's Court released one of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: Plaintiff A Center v. Defendant Company B, a dispute over shareholders' right to know

4. In practice, small and medium-sized shareholders usually do not participate in the actual operation and management of the company, and the laws of various countries usually give shareholders the right to know, and they can consult the company's documents and materials in order to understand the company's operating and financial status. The Company Law of the People's Republic of China only stipulates that small and medium-sized shareholders can inspect accounting books, but it does not clarify whether the original vouchers fall within the scope of shareholders' right to know. In practice, accounting books often cannot truly reflect the actual operating conditions of the company, so if shareholders are not allowed to inspect the company's accounting documents, it will not be possible to truly ensure that shareholders have a comprehensive understanding of the company's operating conditions, which will lead to the frustration of the purpose of shareholders' access to accounting books. By giving minority shareholders the right to inspect the original accounting documents, this case better protects the right to know of minority shareholders and avoids black-box operations by major shareholders and damages the legitimate rights and interests of minority shareholders. -- The Intermediate People's Court of Xiamen Municipality, Fujian Province, released the fifth of 15 typical cases on the protection of small and medium-sized investors: the case of Zhang San and the shareholder of Company A over the right to know

5. If a shareholder consults or copies the company's documents and materials in accordance with the effective judgment of the people's court, but is objectively unable or inconvenient to exercise the right to know, he or she may entrust an accountant, lawyer or other third party with professional knowledge to assist him in exercising his right to know

6. Article 33 of the Company Law stipulates the scope of access by shareholders of a limited liability company in the form of enumeration, but does not stipulate the records of board meetings, accounting vouchers and other archival materials involving the company's trade secrets - Fuzhou Court's Top Ten Commercial Trial Cases in 2018: Zhang San v. Company A Shareholders' Right to Know Dispute

7. If the scope of minority shareholders' right to inspect is limited to accounting books, it will be difficult to ensure that the real operation of the company can be understood through the accounting books, and in the case of a large number of false records in the accounting books, the shareholders' right to know will be frustrated

8. There are certain boundaries and restrictions when shareholders inspect accounting books. When the company believes that the shareholder's exercise of the right to know the accounting books has an improper purpose, it may refuse the shareholder to inspect it. When the company asserts that shareholders have an improper purpose in inspecting the accounting books, they should bear the burden of proof -- the Intermediate People's Court of Guilin City, Guangxi Zhuang Autonomous Region, released the fourth of the 15 typical cases of optimizing the business environment: Company A v. Company B, a dispute over shareholders' right to know

9. Due to the natural "weak position" of small and medium-sized shareholders, the subject of cases requesting the exercise of shareholders' right to know in trial practice is basically small and medium-sized shareholders. In the case of "intra-industry competition", the determination of a shareholder's improper purpose cannot simply be based on the fact that the shareholder operates the same business of the company or serves as a director in another company with the same kind of business, or the senior management refuses the shareholder to exercise the right to know on the basis that the shareholder has an improper purpose, but should determine whether a substantial competitive relationship has been formed, such as competition in terms of customers, project bidding, business territory, etc. The Intermediate People's Court of Xiamen Municipality, Fujian Province, released the sixth of the 15 typical cases on the protection of small and medium-sized investors: the case of Zhang San and the shareholder of Company A over the right to know

10. In principle, shareholders do not have the right to request access to the original accounting documents, unless they have evidence to prove that the accounting books are untrue and incomplete, and they need to be consulted - Beijing Third Intermediate People's Court issued the ninth of 20 typical cases of corporate disputes: the civil judgment of Zhang San v. Company A shareholders' dispute over the right to know

11. If the original shareholders of the company request to inspect or copy the company-specific documents during the period of their shareholding, they should prove that their legitimate rights and interests have been damaged during the period of shareholding--The Second Civil Division of the Supreme People's Court released the third of the top ten commercial cases of courts in China in 2020: Company A v. Company B, a dispute over shareholders' right to know and the distribution of corporate earnings

12. The company has the right to refuse the shareholder's request for inspection of accounting books for improper purposes - the Intermediate People's Court of Nanyang City, Henan Province released the fourth of the top ten typical cases of the protection of small and medium-sized investors in 2021: the dispute over the right to know between Zhang San and the shareholders of Company A

13. The proprietors of private schools may independently choose to establish non-profit or for-profit private schools. If the proprietor of a for-profit private school claims to exercise the right to know, the people's court may apply the relevant provisions of the Company Law by analogy - Gazette of the Supreme People's Court, Issue 2, 2019 (Issue 268), a case of a dispute over the right to know of shareholders of Company A v. College B

14. In this case, although the parties agreed on the scope of Zhang San's rights, the shareholders' right to know belongs to the shareholders' legal rights, and the major shareholders may not restrict or deprive the minority shareholders of their right to know in the form of the company's articles of association or agreements

15. Shareholders with defective capital contributions have the right to know, and subsequent shareholders also have the right to know the information before they join the company -- Beijing Third Intermediate People's Court released the tenth of 20 typical cases of corporate disputes: Zhang San v. Company A, a dispute over the right to know of shareholders

16. Shareholders who request to inspect accounting books should first perform internal remedy procedures -- Beijing Chaoyang District People's Court released the second of the ten typical cases on the protection of the rights of minority shareholders: the plaintiff company A v. the defendant company B shareholders in a dispute over the right to know

08. Adjudication Rules Related to Corporate Governance, Operation, and Earnings Distribution (13 Rules)

1. On the premise of not violating the mandatory provisions of the law, shareholders can resolve the division of the terms of reference between the shareholders' meeting or the general meeting of shareholders and the board of directors through the provisions of the company's articles of association -- the Intermediate People's Court of Jinan City, Shandong Province released the eighth of the top ten typical cases of corporate disputes in 2016-2020: the case of Zhang San and Company A and the company-related disputes

2. The profit distribution table confirmed by all shareholders contains the specific distribution plan of profits, which is an effective resolution made by the company's shareholders' meeting on the company's profit distribution, and profits shall be distributed to shareholders in accordance with the specific distribution plan specified in the resolution, and it is not necessary to convene a shareholders' meeting on the company's profit distribution and form a corresponding written resolution - Beijing Chaoyang District People's Court issued the tenth of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: the plaintiff Zhang San v. the defendant A enterprise company earnings distribution dispute case

3. The actual operator who has been dismissed has the obligation to return the company's license -- The Intermediate People's Court of Xiamen City, Fujian Province issued 15 typical cases of protecting small and medium-sized investors, No. 12: the case of a dispute over the return of the license between Company A and Zhang San

4. The resolution made by the shareholders' meeting in accordance with the provisions of the law and the articles of association of the company has legal effect, and all shareholders shall abide by and implement it - the Intermediate People's Court of Nanyang City, Henan Province released the second of the top ten typical cases of the protection of small and medium-sized investors in 2021: the dispute case of Company A, Zhang San and Li Si requesting to change the company's registration

5. Shareholders have formed a written document unanimously agreed upon with a specific distribution plan of the company's profits, and the shareholders have the right to request the distribution of earnings on the basis of it, and the written document will not have legal effect without being voted on by the general meeting of shareholders - the Intermediate People's Court of Guilin City, Guangxi Zhuang Autonomous Region, issued the fifth of 15 typical cases of optimizing the business environment: Zhang San v. A and B companies

6. The obligation to return the license after the dismissal of the legal person - the Chongqing No. 2 Intermediate People's Court issued the fourth of five typical cases of ensuring market entities to promote the development of enterprises: the dispute over the return of licenses between Company A and Zhang San Company

7. The internal order agreement between shareholders on the distributable profits of shareholders belongs to the scope of internal autonomy of the company and is not necessarily invalid - Beijing Third Intermediate People's Court released the 11th of 20 typical cases of corporate disputes: Company A v. Zhang San, a case of equity transfer dispute

8. A legal person who sues after leaving office and requests for a change of registration of the legal representative shall be filed and accepted - 2020 Reference Case No. 6 of the Sixth Circuit Court of the Supreme People's Court: Zhang San v. Company A and Li Si requesting a change in company registration

9. The articles of association of the company are formulated by all shareholders through mutual agreement, and have the highest effect within the company, and the company's internal decision-making behavior should follow the provisions of the articles of association, and the court may make necessary reviews of the legality of the articles of association in the trial of the company's resolution defects, but it is not appropriate to deny the validity of the provisions of the company's articles of association if the company's articles of association do not violate the mandatory provisions of the law - Fuzhou Court's Top Ten Commercial Trial Cases in 2018 No. 8: Company A and Company B v. Company C Company Resolution Confirmation Dispute Case

10. When shareholders withdraw their shares, they can be supported by requesting the distribution of occupational risk funds that have been withdrawn for more than 5 years——Gazette of the Supreme People's Court, No. 5, 2012 (No. 187), Shanghai No. 2 Intermediate People's Court, A Asset Appraisal Company v. Zhang San, et al., other company-related disputes

11. If there is evidence to prove that the company has a surplus and there are abuses of shareholder rights such as disguised distribution of profits by some shareholders, concealment or transfer of the company's profits, the distribution of earnings can be compelled in the lawsuit, and other remedial measures such as equity repurchase and subrogation litigation are not the premise-Gazette of the Supreme People's Court, Issue 8, 2018 (Total No. 262), a dispute over the distribution of earnings between Company A, Company B and Zhang San Company

12. The right of a dismissed legal person to file a lawsuit for change of registration - Gazette of the Supreme People's Court, Issue 12, 2022 (Issue 316), a dispute between Zhang San and Company A and others requesting to change the company's registration

13. If the creditor can prove that the company's operation has been incorporated into the family's will, and the operating income is used for family life or the company is jointly operated by the husband and wife, it can also be determined to be a joint debt of the husband and wife - Beijing No. 1 Intermediate People's Court released the sixth of the 14 typical cases of corporate disputes: the equity repurchase dispute between Company A and Zhang San

09. Adjudication Rules Related to Pledge, Equity Transfer and Guarantee (3 Rules)

1. Judicial Determination of Equity Transfer Guarantee - Dispute over Qualification Confirmation of Shareholders of Company A, Zhang San and Li Si in the Gazette of the Supreme People's Court [Case No.: (2020) Gan Min Zhong No. 294]

2. If the guarantee is made by way of equity transfer, it shall be determined to be legal and valid in accordance with the law - Beijing No. 1 Intermediate People's Court released the fourth of the 14 typical cases of corporate disputes: the dispute between Zhang San and Company A over the confirmation of shareholder qualifications [Released on October 12, 2020]

3. An equity transfer agreement concluded without the consent of the pledgee is effective in the field of debt law - the sixth circuit court of the Supreme People's Court in 2019 typical reference case of the circuit area No. 8: Zhang San and Li Si equity transfer dispute case

10. Adjudication Rules Related to Related Party Transactions (1 Rule)

1. Executives who actually exercised their powers and did not disclose their affiliated relationship with Qinghai Tonghaida Company to the company, and used their authority to carry out related party transactions that caused losses to the company, and should be liable to the company for compensation - the third of the top ten commercial cases of the people's court in 2019, and the sixth typical reference case of the Sixth Circuit Court of the Supreme People's Court in 2019: Company A v. Zhang San, Li Si and Wang V

11. Adjudication rules related to the identification of senior executives, loyalty and diligence, and non-competition restrictions (5 rules)

1. Determining that the company's senior management personnel violated the requirements of loyalty and diligence on subjective gross negligence -- Beijing Third Intermediate People's Court released 17th of the 20 typical cases of corporate disputes: a dispute between Company A and Zhang San over liability for harming the company's interests

2. If the business behavior of the directors and senior executives violates the mandatory provisions of laws and administrative regulations or violates the articles of association, it can generally be determined that the directors and senior executives have violated the requirements of the duty of diligence, and there is no need to conduct a substantive review of their behavior. -- The Sichuan High People's Court released for the first time the fifth typical case of commercial trial: Company A v. Zhang San et al., a dispute over liability for harming the interests of the company

3. At present, the mainland is actively building the "Belt and Road", and a large number of domestic companies, including those set up in the free trade zone, are actively setting up representative offices overseas in order to better expand foreign investment and trade. In commercial disputes related to companies, the identity and authority of the staff of such offices often become one of the focus of disputes. Article 148 of the Company Law stipulates that if a director or senior manager violates the duty of loyalty to the company, the income derived by the director or senior management shall belong to the company. Accordingly, the fact that the staff involved in the case had the status of directors and senior managers of the company was a prerequisite for the company's assertion of the right of attribution to be supported. This case makes it clear that judging whether a staff member is a senior manager of the company is not only an issue of the company's internal governance, but also involves the determination of legal liability, in addition to focusing on the formation of his position and the scope of his duties, it is also necessary to comprehensively consider whether he or she has actually exercised the powers of the senior manager, whether the specific matters he is responsible for are the core business of the company, and whether there is a formal labor contract relationship between him and the company. The Shanghai Pudong People's Court jointly released the second of the top ten typical cases of judicial protection in the free trade zone: Company A v. Zhang San and Company B, a dispute over liability for harming the interests of the company

4. There is a difference between the non-compete obligation in the Company Law and the non-compete obligation in the Labor Contract Law -- Beijing Third Intermediate People's Court released the 16th of the 20 typical cases of corporate disputes: Company A v. Zhang San, a case of liability dispute over damage to the company's interests

5. If the directors' behavior does not directly damage the interests of shareholders, it shall not be deemed to harm the interests of shareholders - Beijing Third Intermediate People's Court released 15 typical cases of 20 typical cases of corporate disputes: Center A v. Zhang San, Li Si, Wang 5, Zhao 6 and a third party, Company B, a dispute over liability for harming the interests of shareholders

12. Adjudication Rules Related to Excessive Control and Damage to Interests (2 Rules)

1. If the subsidiary's important customer resources are transferred to its own name without consideration, resulting in a decrease in the subsidiary's solvency, thereby harming the repayment of the subsidiary's creditors' claims, it can be determined that the parent company has abused the company's independent status as a legal person and the limited liability of shareholders - Beijing Third Intermediate People's Court released the 19th of 20 typical cases of corporate disputes: Company A v. Company B Shareholders Liability Dispute for Harming the Interests of the Company's Creditors

2. The misappropriation of the company's funds by shareholders in fictitious pawn transactions is harmful to the interests of the company. The loss suffered by the company is not equivalent to the direct loss of the shareholder, and the shareholder has no right to directly claim the loss of the company's property as the loss of the shareholder's own interests, nor can it require the infringer to directly compensate him. -- The People's Court of Chaoyang District, Beijing Municipality released the ninth of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: the plaintiff Zhang San v. the defendant Li Si et al., a dispute over liability for harming the interests of the company

13. Adjudication Rules Related to Dissolution and Liquidation Liability (11 Rules)

1. The liquidation liability is that the liquidation obligor bears the responsibility for the company's debts with its own property, which is completely different from the limited liability of shareholders when they make capital contributions, and is essentially tort liability, and the scope of liability may be far greater than the amount of capital contribution

2. According to the literal interpretation method, the "shareholders' decision to dissolve" stipulated in the articles of association involved in the case should be interpreted as "the resolution of the shareholders' meeting to dissolve" in Article 182, Item (2) of the Company Law of the People's Republic of China, so as to avoid the arbitrariness of the dissolution, otherwise it is very easy to lead to the abuse of rights by major shareholders and damage the interests of minority shareholders. It should be noted that the shareholders of a limited liability company can stipulate the reasons for dissolution in the articles of association, but the dissolution of the company is, after all, a major matter of the company, and a relatively strict procedure must be followed, that is, the dissolution is resolved by the shareholders' meeting. If the major shareholders are allowed to dissolve the company at will, it is not conducive to the stability of the company's operation and may damage the rights of other small and medium-sized shareholders. The judgment in this case has set a good example for further standardizing the procedures for the dissolution of companies and protecting the legitimate rights and interests of small and medium-sized investors. -- The Intermediate People's Court of Xiamen Municipality, Fujian Province, released 14 of the 15 typical cases on the protection of small and medium-sized investors: the case of Zhang San, Company A and Li Si confirming the dissolution of the company

3. Internal remedies need to be exhausted for the dissolution of a company - Beijing No. 1 Intermediate People's Court released 14 typical cases of corporate disputes: the dispute between Zhang San and Enterprise A

4. Determination of corporate deadlock in the state of suspension of business - The High People's Court of Guangdong Province released the twelfth of the 20 typical cases of service guarantee for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area: Company A v. Company B and other companies in a dispute over dissolution

5. The loss of personal compatibility between the shareholders of the company is the substantive condition for the dissolution of the company -- the Intermediate People's Court of Jinan City, Shandong Province released the tenth of the top ten typical cases of corporate disputes from 2016 to 2020: Company A v. Company B and Company C for the dissolution of the company - the loss of personal compatibility between the shareholders of the company is the substantive condition for the dissolution of the company

6. The employer maliciously defrauds the deregistration with a false liquidation report in order to evade legal liability, which not only damages the legitimate right of the employee to obtain work-related injury insurance benefits, increases the cost of protecting the rights of the employee, but also violates the rules of conduct of the main body of the socialist market economy. The court's judgment that the company's shareholders bear the liability for work-related injury compensation in accordance with the law is of great significance to protect the legitimate rights and interests of workers in accordance with the law, crack down on dishonest business practices, and promote the construction of a social credit system -- the Chongqing High People's Court released the eighth of 10 typical cases of promoting the core socialist values (second batch): Zhang San et al. v. Li Si, a case of liability dispute over damage to the interests of the company's creditors

7. The statute of limitations for liquidation and repayment liability starts from the time when the creditor knows or should know that the company cannot be liquidated - Beijing Third Intermediate People's Court released 18 typical cases of 20 corporate disputes: Company A v. Zhang San and Li Si, a case of liability dispute over the liability of shareholders for harming the interests of the company's creditors

8. Failure to perform the statutory notification obligation in the merger, resulting in the creditor losing the opportunity to demand repayment of debts or provide corresponding guarantees, constitutes infringement - No. 8 of the top ten cases adjudicated by the company of Jiangsu court: a dispute over the liability of the shareholders of company A and company B for harming the interests of the company's creditors

9. If the remedies have not been exhausted, a lawsuit for dissolution of the company filed at the early stage of the conflict between shareholders will not be supported--Beijing Third Intermediate People's Court released 20 typical cases of 20 typical cases of corporate disputes: Company A v. Company B for the dissolution of the company

10. Shareholders who are unable to exercise their shareholder rights or do not pay dividends can file a lawsuit or remedy through other channels in accordance with the law, and do not have to resolve the matter by dissolving the company - the Intermediate People's Court of Nanyang City, Henan Province released the eighth of the top ten typical cases of small and medium-sized investor protection in 2021: Zhang San, Li Si and Enterprise A dissolution dispute case 11, although the company is in a profitable state, its shareholders' meeting mechanism has been out of order for a long time, and there are serious obstacles to internal management, and it has reached a deadlock. It can be determined that serious difficulties have arisen in the operation and management of the company - Guiding Case No. 8, Zhang San v. Company A and Li Si Company, a dispute over the dissolution of the company

14. Adjudication Rules Related to State-Owned Enterprises (4 Rules)

1. When a state-owned enterprise transfers its equity, it must enter the market, but the transaction must not infringe on the rights of other shareholders; It is not possible to conclude that the right of first refusal has been lost based on the trading rules formulated by the exchange itself that "if you do not enter the market, it will be deemed to have waived the right of first refusal" -- the Supreme People's Court issued the eighth of ten typical cases of equal protection of the non-public economy in accordance with the law, "Gazette of the Supreme People's Court" No. 5 of 2016 (No. 235 in total) Company A v. Company B et al. Equity Transfer Dispute Case: Company A vs. Company B, Company C, Company D, and Exchange E Equity Transfer Dispute Case

2. From the perspective of the company's capital contribution, both public and non-public shareholders should fulfill their capital contribution obligations in accordance with the law - the Supreme People's Court issued the seventh of the ten typical cases of equal protection of the non-public economy in accordance with the law: the case of capital contribution disputes between shareholders such as Company A and Company B

3. If the applicant is aware of the change and participates in the transaction, and after the transaction is concluded, and requests confirmation that the change of information is invalid, the people's court will not support it - Zhang San v. A Property Rights Exchange and Company B Equity Transfer Dispute Case in the Gazette of the Supreme People's Court No. 6 (No. 176) in 2011

4. If a state-owned enterprise is restructured into a limited liability company, its initial articles of association restrict the transfer of equity and clearly stipulate the terms of the company's repurchase, which can be deemed valid as long as it does not violate the mandatory provisions of the Company Law and other laws. Where a limited liability company buys back shareholders' equity for a reasonable consideration in accordance with the initial articles of association, and reasonably disposes of it by transferring it to other shareholders, the people's court should uphold it—Guiding Case No. 96, Zhang San v. Company A, a dispute over the confirmation of shareholder qualifications

15. Adjudication Rules Related to Shareholder Representative Litigation and Other Procedures (8 Rules)

1. Filing a lawsuit directly without going through the pre-procedure of shareholder representative litigation - Zhang San v. Company A, Li Si, Wang Wu and the third party Company B in the Gazette of the Supreme People's Court, Issue 6, 2020 (Issue 284 in total), a dispute over liability for harming the company's interests

2. The liability of shareholders for abusing shareholder rights to damage the interests of the company, the liability of the company's controlling shareholders, actual controllers, directors, supervisors and senior managers for harming the interests of the company by using related party transactions and the liability of directors and senior managers for harming the interests of the company are three legal relationships. The subjects of the three types of legal relationships, the constituent elements, and the subject matter of the litigation are all different, and they are obviously not necessary joint litigation -- the third of the top ten typical cases of the trial of enterprise-related cases by Zhejiang courts in 2013: the case of liability disputes between company A, company B, company C, etc., for damage to the interests of the company

3. When there is evidence to prove that the supervision and checks and balances of the company's internal governance structure have objectively failed, the shareholders can be exempted from the pre-procedure if they file a lawsuit on behalf of the company - the Intermediate People's Court of Suzhou Municipality, Jiangsu Province issued the fourth of 8 typical cases of protecting the legitimate rights and interests of small and medium-sized investors: Company A v. Company B shareholders in a dispute over liability for harming the interests of the company

4. Shareholders should provide evidence for the existence of exemptions from pre-procedure -- Beijing Chaoyang District People's Court released the eighth of the top ten typical cases on the protection of the rights of small and medium-sized shareholders: the plaintiff Zhang San v. the defendant Li Si et al., a dispute over liability for harming the interests of the company

5. Under normal circumstances, if a shareholder fails to perform the pre-procedure, the lawsuit shall be dismissed. However, this pre-procedure is aimed at the general situation of corporate governance, that is, when the shareholder submits a written application to the relevant authority of the company, there is the possibility of the relevant authority of the company filing a lawsuit. If there is no such possibility, it is not appropriate to dismiss the shareholder's lawsuit on the grounds that the shareholder has not performed the pre-procedure - the Intermediate People's Court of Nanyang City, Henan Province released the seventh of the top ten typical cases of the protection of small and medium-sized investors in 2021: Zhang San, Li Si and Wang Wu The case of liability for harming the interests of the company

6. Although the company did not file a civil lawsuit after discovering that the funds were misappropriated, it has actively taken remedial measures to recover the company's losses through criminal reporting, negotiation and reconciliation, and there is no situation where the company's interests are damaged and cannot be saved, and the shareholder's lawsuit will not increase the company's interests, and it is no longer necessary to give shareholders the right to file a representative lawsuit at this time - the Supreme People's Court released the seventh of the top ten commercial cases in the national courts in 2021: Zhang San v. Li 4, Wang 5, Zhao 6, Company A, Company B, Company C, Company D and the third party Company E in the first instance in a dispute over damage to the interests of the company

7. The two lawsuits have complete litigation elements and meet the case filing standards stipulated in the Civil Procedure Law of the People's Republic of China, and the parties can take a step back and choose to assert the litigation claims of the latter lawsuit when the claims of the previous lawsuit are not supported, and the people's courts shall file and accept the two lawsuits of the parties - the Sixth Circuit Court of the Supreme People's Court 2019 Reference Case No. 2: A Farm v. Company B and C State-owned Assets Supervision and Administration Commission, a dispute over the validity of the resolution of the shareholders' meeting

8. When a non-party to the contract as the plaintiff files a lawsuit claiming payment of money in accordance with the contract, the geographical jurisdiction shall not be determined by the place where the contract is performed shall not be the place where the contract is performed. Referring to the provisions of subrogation litigation and the filing of a lawsuit by the transferee of the creditor's right against the debtor, such cases should be under the jurisdiction of the people's court at the place where the defendant is domiciled - the sixth reference case of the Sixth Circuit Court of the Supreme People's Court in 2019: Zhang San, Company A, and Li Si Equity Transfer Dispute

16. Adjudication Rules Related to the Intersection of Civil and Criminal Law (4 Rules)

1. Correctly apply the rules of civil procedure, establish the correct concept of handling intersecting criminal and civil cases, and confirm the legality of commercial investment behaviors -- The Second Circuit Court of the Supreme People's Court issued the eighth of ten typical cases on the fair trial of major cross-provincial civil and commercial and administrative cases: Zhang San, Company A and Li Si, Wang Wu, Zhao Liu, and Company B

2. Using criminal means to protect the rights and interests of small and medium-sized investors in an all-round and multi-channel manner -- The Intermediate People's Court of Xiamen Municipality, Fujian Province, released 13 typical cases of 15 typical cases for the protection of small and medium-sized investors: a series of equity transfer disputes between Company A and Company B

3. Criminal and civil cases of employees' breach of confidentiality obligations - The Supreme People's Court released the fifth of the top 10 intellectual property cases in Chinese courts in 2020: the dispute over the distribution of earnings between Company A and Zhang San

4. The acquittal of a criminal judgment does not necessarily lead to a civil case that the infringement or breach of contract does not exist - the Supreme People's Court Gazette, Issue 3, 2021 (Issue 293) A Company and Zhang San Company Earnings Distribution Dispute

17. Adjudication rules related to Hong Kong, Macao, Taiwan and foreign investors (10 rules)

1. Determination of the national treatment of foreign investors whose business scope is outside the scope of the negative list -- Shanghai Pudong Court released the third of the top ten typical cases of foreign-related commercial trials: Zhang San v. Company A, and the third party Li Si and Wang Wu shareholder qualification confirmation dispute

2. Identification of Hong Kong's Anonymous Shareholders - The Guangdong Provincial High People's Court released the sixth of 20 typical cases of service protection for the construction of the Guangdong-Hong Kong-Macao Greater Bay Area: Zhang San v. Company A and Li Si, a dispute over the record of shareholders in the register of shareholders

3. Determination of the effective requirements for contracts of foreign-invested enterprises not included in the negative list for foreign investment (from the perspective of filing) -- The Supreme People's Court released the third batch of 10 typical cases involving the construction of the "Belt and Road": the case of equity transfer disputes between Company A and Company B, Zhang San and Li Si

4. Determination of the validity of the agreement between mainland residents investing in Macao enterprises - Typical Cases of Cross-border Disputes in the Guangdong-Hong Kong-Macao Greater Bay Area by Guangdong Court No. 15: Company A et al. v. Zhang San et al., a dispute over capital contribution

5. Identification of foreign anonymous shareholders requesting to be visible -- The Supreme People's Court released the second of the ten typical cases of the people's courts in the construction of the Pilot Free Trade Zone: the dispute over the confirmation of shareholder qualifications between Zhang San and Company B

6. Determination of the nature of the equity repurchase clause of Sino-foreign joint ventures - the second batch of typical cases involving the construction of the "Belt and Road" issued by the Supreme Court: the appeal of the dispute over the equity transfer contract between Company A and Singapore Company B

7. Determination of the validity of equity transfer of shares of listed companies held by foreigners anonymously (determination of the legality of foreigners' investment that does not violate prohibitive provisions in China) -- Typical Case No. 2 of the Construction of the "Five Centers" of Shanghai Special Court Service Guarantee (No. 3 of Typical Cases of Foreign-related Financial Disputes in Shanghai Court Released by Shanghai High Court): Zhang San v. Li Si, a dispute over equity transfer

8. Applying Hong Kong Law to Determine the True Expression of Intent of a Hong Kong Company -- Guangdong Court's Second Batch of Typical Cases of Cross-border Civil Disputes in the Guangdong-Hong Kong-Macao Greater Bay Area: Company A v. Company B, a Dispute over the Right to Know of Shareholders

9. Confirmation of the Judicial Administrator and Liquidator of a Foreign Company in the Determination of Civil Rights and Capacity for Conduct in China - One of the typical cases of the Supreme People's Court providing judicial services and guarantees for the construction of the "Belt and Road": a dispute over capital contribution between shareholders of Company A and Company B in Singapore

10. Determination of the validity of the registration of cross-border investors' equity changes - the fifth of the second batch of typical cases of cross-border civil disputes in the Guangdong-Hong Kong-Macao Greater Bay Area by Guangdong courts: Zhang San v. Company A and other equity disputes

18. Adjudication Rules Related to Equity Incentives (3 Rules)

1. The Boundaries of the Rights of Specific Investors Introduced by the Company in the Name of Equity Incentives - 10th of the Top 10 Commercial Trial Cases of Fuzhou Court in 2018: Zhang San v. Company A, Company B, and Company C

2. If an employee receives the company's equity free of charge based on the equity incentive plan, it should not be recognized as a gift - Beijing No. 1 Intermediate People's Court released one of the 14 typical cases of corporate disputes: the equity transfer dispute case between Zhang San and Li Si

3. Determination of the legal effect of resignation and withdrawal of shares: the fifth of the seven typical cases of Hubei courts in promoting the development of non-public economy and the protection of property rights (2017): a company-related dispute between the plaintiff company A and the defendant Zhang San and the third party Li Si

Transferred from the same judgment rule for similar cases