Partnership Guide | Author: Li Li
This is the 917th text of Li Li's blog and partnership guide public account
Is it a partnership to pay money to the company's legal representative and replace part of the company's profit dividends?
When the civil and commercial litigation is heard, there are often such scenes: the parties have carefully prepared detailed analysis and reasons for the trial, and have gushed endlessly in court, arguing how to understand how a certain clause of the agreement should be correct and reasonable.
However, when I picked up the key agreement of the case and looked at it, the paper was full of the attitude of "not paying attention to the text of the agreement", and the content of the writing was either general and not specific, or the semantics were difficult to understand, some of the content was not agreed at all, and some of the content agreement was vague and ambiguous.
Sometimes one has to sigh: why didn't you write down the words in court in detail in the text of the agreement? When drafting an agreement, it may take a minute or two to write two sentences, and you don't have to spend ten minutes in court now arguing about what a sentence means. But in retrospect, this is probably most of human nature: it is rare to learn more in advance, and most of the time when the problem falls on the head, it will think of learning the treatment. There is a story from the Spring and Autumn Warring States period that tells this situation.
King Wen of Wei asked Bian Que, "Which of the three Zi Kundi is the best doctor?" Bian Que said: "The eldest brother is the kindest, the middle brother is second, and Bian Que is the lowest." Wei Wenhou said, "Can you smell evil?" Bian Que said: "The eldest brother is sick and sees God, and has not been tangiblely removed, so his name does not come out of his home." The middle brother treats the disease, which is in the hair, so the name is not out of Lu. If the magpie is flattened, the blood vein, the poison, the secondary skin, and the idle are famous among the princes. ”
King Wei Wen asked the famous doctor Bian Que, "The three brothers in your family are all proficient in medical skills, which one is the best?" Bian Que replied, "The eldest brother is the best, the middle brother is second, and I am the worst." ”
King Wen asked again, "Then why are you the most famous?" ”
Bian Que replied, "My eldest brother treated the disease before the onset of the disease. Because ordinary people do not know that he can eradicate the cause of the disease in advance, his fame cannot be passed on, only the people in our family know. My middle brother treated the disease at the beginning of the disease. Most people think that he can only cure minor diseases, so his fame only extends to his hometown. And I bian que treat the disease, it is to treat the disease when the disease is serious. Most people see me wearing needles on the meridians to bleed, applying medicine to the skin and other major surgeries, so they think that my medical skills are smart, and my fame has spread all over the country. ”
After excerpting this story, let's get back to the point and get back to the point. Is this situation a partnership in the title of this article?
In the work, there have indeed been several cases like this in which a part of the money is invested in a company but not invested in shares. Usually, both parties will regard this form as a kind of "dry stock", that is, indirectly have a certain proportion of profits, but the loss is not borne, and there is no other right. People who are more cautious will draft an agreement to write down the origin of the money, especially about whether the principal can be refunded. Such an agreement may satisfy the needs of some two parties, such as one party does not want to earn interest but does not want to buy shares, and the other party wants to raise funds but does not want the other party to buy shares. Although the operation is not very standardized, it is not prohibited by law, so in principle it is still legal.
However, the crux of the matter is that the content of the agreement should be written clearly, and the true meaning of the two parties when signing the contract should be accurately and completely expressed. I am most afraid of the self-righteous idea that some content is definite or not written. In the case we are talking about today, the drafting of the agreement between the two parties is this problem, one party thinks that it is an investment partnership, and the other party does not think that it is a partnership. Not a partnership means that it is possible to terminate the contract and return all the money. If it is a partnership, then there is no reason to return the investment, it can only be divided into existing partnership property, and the loss is how much partnership property is earned when it earns points.
On August 20, 2020, Company A (Party A) and Zhang Mou (Party B) signed a rather simple "Profit Sharing Agreement". The agreement is as follows:
Party A will distribute (donate) a certain amount of profit dividends to Party B every year; Party B shall pay 250,000 yuan to Party A's legal representative or shareholders within 30 working days after the signing of the agreement to replace 25% of the profits generated by Party A after deducting various expenses from the profits earned by Party A in its business activities; Dividends are paid on May 31 and December 31 of each year, in cash; Party B's right is to review the company's financial revenue and expenditure and listen to the report of Party A's business conduct; This contract is effective from the time of conclusion, and the replacement conditions of both parties cannot be refunded to either party (25% profit dividend, 250,000 yuan replacement money, the replacement amount is subject to the actual arrival), and the validity period of this contract is until the time of cancellation of the company.
As a company that actually received the money, it may think that the agreement is complete, especially the last article stipulates that both parties must not claim the return of the replacement money and profits, so as to ensure that the money received will not be returned. Company A's understanding of this was wrong because it forgot to consider the situation of contract termination.
After the signing of this agreement, Mr. Zhang paid 170,000 yuan through mobile banking to Ji X, a shareholder of Company A, through mobile banking, and all three parties confirmed that the above 170,000 yuan was the amount under the Profit Dividend Agreement paid by Mr. Zhang.
After Zhang paid 170,000 yuan to the shareholders of Company A, after about 4 months, on December 10, 2020, Zhang sent a WeChat message to Zhu Mou, the legal representative of Company A, "How have you developed recently, I want to see the next account, will it work before next Tuesday?" Zhu replied, "Now it is all a state of loss, we don't know how to get it, the cars are all sent by peers, the car is cheap, and it is necessary to go back, there is really no way to do it." On the same day, Mr. Zhang sent a notice to Company A through courier requesting to view the account books, and the courier was returned to Mr. Zhang due to unsuccessful delivery.
Zhu's reply was generally accurate, because it was later confirmed that Company A stopped operating in December 2020, and the business premises were also withdrawn at that time, and the company has not resumed operations so far. Since none of the shareholders of Company A have the will to continue operating, the company is in the process of deregistration.
In 2021, Mr. Zhang filed a lawsuit with the court requesting: first, ordering the termination of the "Profit Dividend Agreement" signed between Mr. Zhang and Company A; second, ordering Company A to return Mr. Zhang's investment funds of 170,000 yuan.
When Zhang filed the lawsuit, he filed the lawsuit on the grounds of the dispute over the partnership agreement, but during the trial, Zhang stated that his intention was not to be a partnership, but planned to invest in Company A, but the parties did not negotiate on the proportion of equity, nor did they go through the change of industrial and commercial registration. According to the provisions of the "Profit Dividend Agreement" involved in the case, Zhang Mou exchanged a certain proportion of the profits obtained from Company A's business activities after deducting various expenses by investing money from Company A. The agreement does not conform to the characteristics of the partnership of "joint capital, partnership, shared benefits, and shared risk". Therefore, the court determined that the cause of action in this case was other disputes related to the company.
From this detail, it can be seen that even Zhang Mou himself is not clear whether the "Profit Sharing Agreement" signed by himself is a partnership.
After trial, the court of first instance held that:
According to the provisions of the Profit Dividend Agreement, Zhang Mou invested money in Company A to obtain a certain proportion of dividends after deducting various expenses from the profits earned by Company A's business activities. After Zhang invested 170,000 yuan, on the one hand, Zhang could not understand the operating expenses of Company A due to Company A's pushback, and Zhang did not receive any dividends; on the other hand, Zhang invested in Company A after only a few months of investment, and Company A stopped operating, and is currently in the process of deregistration procedures, which has caused Zhang's investment purposes to be unable to be realized. Therefore, the court of first instance upheld Zhang's claim to terminate the Profit Dividend Agreement in accordance with the law. After the contract is terminated, Company A shall return the money invested by Company A to Mr. Zhang. In addition, the Profit Sharing Agreement does not stipulate that Mr. Zhang should bear the operating losses of Company A, and that Company A and Mr. Zhang are not a partnership, nor is Mr. Zhang a shareholder of Company A, so Company A's claim that it refuses to return mr. Zhang's money on the grounds that the company's losses is not established.
The court of first instance accordingly ruled that the Profit Dividend Agreement signed by Company A and Company A on 20 August 2020 shall be terminated; 2. Company A shall return RMB 170,000 to Mr. Zhang within 10 days from the effective date of the judgment. If the obligation to pay money is not performed within the period specified in the judgment, the interest on the debt during the period of delayed performance shall be doubled in accordance with the provisions of Article 253 of the Civil Procedure Law of the People's Republic of China. The first-instance case acceptance fee is $3,700, and the halving fee of $1,850 is borne by Company A.
Company A appealed, insisting that the agreement between the two parties was a partnership agreement. Company A believes: "According to the Profit Sharing Agreement, it can be seen that the contractual rights and obligations between the two parties are for Zhang to invest 250,000 yuan to obtain 25% of the equity of Company A and the corresponding income, and if there is no profit, there is no dividend, and Zhang also needs to participate in the operation of the company." This is a typical partnership agreement and the parties should be considered to be in a partnership. In addition, Company A also mentioned that "Zhang's statement in the first instance can also be seen that the two parties belong to a partnership relationship." In the first-instance trial, Zhang Stated that his intention was not to be a partnership, but to invest in Company A, and Zhang's statement can also be seen that the two parties' meaning is to invest in the partnership, and when they sue, they are also sued to the court for partnership disputes, and the relationship between the two parties is a partnership relationship. ”
After trial, the court of second instance held that:
This court held that, as far as the facts of this case are concerned, Zhang paid a part of the money to Company A in order to obtain a certain profit distribution from Company A. It only requires an audit of the accounts and has an understanding of the financial situation of Company A. Therefore, its behavior is different from joint operation and different from ordinary partnerships. Therefore, it is reasonable for the court of first instance to list the cause of action in this case as other disputes related to the company. According to the contract, Mr. Zhang has the right to understand the operating conditions of Company A after paying the amount agreed in the contract. However, according to the self-report of the legal representative of Company A, Company A itself does not have standardized financial records, but only the handwriting of the legal representative of Company A; therefore, the reliability of its financial records is questionable. In December 2020, Company A lost its leased premises, and in this case, it is unconvincing for Company A to stress that this move would not affect its operations. All of the above have an adverse impact on Company A's performance of its contract with Mr. Zhang, and it is difficult to achieve the purpose of Mr. Zhang's contract. Accordingly, the court of first instance, at Zhang's request, ruled that the termination of the Profit Dividend Agreement between Zhang and Company A was not improper, and this court confirmed it. The Court of First Instance also did not improperly deal with other matters, which were upheld by this Court.
In the above case, Company A has always insisted that Zhang's investment belongs to a partnership, but the word "partnership" does not appear on the agreement, let alone the expression that requires the other party to bear losses, which cannot be recognized by the court. What is said in the mouth, what is thought in the heart, and what is thought must be said is not as good as what is written in the agreement.