Shareholders' subscription of registered capital is not a blank check -- on the legal liability of shareholders' accelerated contribution and non-payment of contribution obligation

Author: 焦汉伟李梦影

Published on: 2022-01-05 10:58

The corporation is a great institutional innovation in the history of human business development. The limited liability of shareholders under the modern company system has greatly released the enthusiasm and enthusiasm of social investment, and promoted the development of social economy. At present, the company is already the main form of enterprise organization in our market economy. Under the shareholder limited liability company system, the amount of registered capital of the company to determine how appropriate? The scale of registered capital of a company is affected by many factors, such as the operating cash flow demand of an enterprise, the ability of shareholders to invest, and so on. From the perspective of operation and law, the size of the company's registered capital is not the more the better, nor the less the better. Article 3 of the Company Law of China stipulates: "The shareholders of a limited liability company shall be liable to the company within the limit of the amount of capital contribution they have subscribed to; The shareholders of a joint stock limited company shall be liable to the company to the extent of the shares they have subscribed for. The shareholder's obligation of capital contribution is the most basic legal obligation of the shareholder to the company, and the limited liability of the shareholder is limited to the amount of capital contribution or shares subscribed by the shareholder. Under certain circumstances, shareholders not only need to speed up the contribution of the subscribed registered capital, but also need to bear legal adverse consequences such as compensation losses, limited rights of shareholders, and removal of shareholders, if the shareholders do not fulfill the obligation of contribution and damage the interests of the company or the interests of the company's creditors.

一、Shareholder investment obligation

The capital contribution obligation of the shareholders of a company refers to the obligation of the shareholders of a company to pay their subscriptions to the registered capital in full and on time in accordance with the articles of association of the company. As far as the shareholders' obligations are concerned, the shareholders' contribution obligation is the most basic obligation to the company, and it is also the basis for the company to operate. When a company is established or capital is increased, the shareholders of the company may make capital contributions in currency, or in physical goods, intellectual property rights, land use rights and other non-monetary property that can be valued in currency and transferred according to law. As far as the form of monetary contribution of the shareholders of the company is concerned, the investment standard is relatively clear: in accordance with the provisions of the articles of association, the currency is deposited on time and in full into the account opened by the limited liability company in the bank, that is, the shareholders' investment obligation is fully fulfilled. For the non-monetary contribution obligation of shareholders, the investment standard is more complicated, and the following requirements should be paid attention to: (1) The non-monetary assets contributed by shareholders must be evaluable and transferable assets. Non-assessable or non-transferable assets cannot be used as shareholder assets, such as labor services, collective land use rights, etc. (2) Non-monetary contributions need to be made in full. The shareholder's contribution to non-monetary assets shall be assessed, and the assessed value of non-monetary assets shall not be lower than the price determined in the articles of association. If the non-monetary contribution is not assessed, because the actual value of the non-monetary property is not in line with the amount priced in the articles of association is not clear, when the parties request that the investor has not fulfilled the obligation of investment, the court will entrust a legitimate appraisal institution to evaluate, and then compare the assessed amount with the amount priced in the articles of association to determine whether the investor has fully fulfilled the obligation of investment. If the assessed value of non-monetary assets is lower than the amount priced in the articles of association, the shareholders of the company have not fully fulfilled their obligation to contribute. (3) Non-monetary investment needs to be in place in a timely manner. Among them, non-monetary assets that do not need to be registered for ownership changes should be delivered in time, such as inventory goods; For non-monetary property that requires registration for ownership change, such as land, houses, equity, etc., equal attention should be paid to ownership change and actual delivery of the property, that is, the property should not only be actually delivered to the company for use, but also be registered for ownership change, otherwise it is not fully fulfilling the obligation of capital contribution. In the establishment or capital increase of the company, the shareholders of the company shall fulfill the obligation of capital contribution in a comprehensive, full and timely manner, otherwise it shall be deemed as failing to fulfill the obligation of capital contribution.

二、Accelerated contribution by shareholders

Accelerated contribution by shareholders refers to the act of shareholders of a company paying their subscription to the registered capital of the company in advance before the expiration of the time limit for payment of the registered capital as stipulated in the articles of association. As for the payment time of registered capital, China has long implemented the paid-in registered capital system since the implementation of the Company Law in 1993, that is, the shareholders of the company should, in principle, pay the registered capital in place when the company is established or increased, and carry out capital verification to ensure the maintenance of the company's capital, and thus protect the interests of the company and the company's creditors. After the amendment of the Company Law in 2013, the registered capital was changed from the "paid-in system" to the "subscription system", that is, there is no payment requirement for shareholders to subscribe to the registered capital when the company is established or increased, and the specific payment amount or time is agreed by the company's articles of association. Under the registered capital subscription system, shareholders freely agree on the time limit of investment payment in the articles of association, which is an interest of the company law. In the case that the company can pay its external debts, such term benefits are affirmed and protected, and shareholders do not need to pay their subscription to the registered capital of the company in advance. However, under legal circumstances, the shareholders of the company no longer enjoy the benefits of the term, and need to accelerate the investment in accordance with the law and pay the registered capital of the company in advance. According to the law, the four types of accelerated investment are as follows: (1) The company is bankrupt. Article 35 of the Enterprise Bankruptcy Law of the People's Republic of China provides that after the people's court has accepted the bankruptcy application, if the investor of the debtor has not fully fulfilled the obligation of capital contribution, the administrator shall require the investor to pay the capital contribution, without being limited by the time limit of capital contribution. (2) Dissolution of the company. Article 22 of the Interpretation of the Company Law (II) stipulates that at the time of dissolution of the company, the capital contribution not yet paid by the shareholders shall be regarded as liquidation property; The shareholder's outstanding contribution shall include the outstanding contribution which is due to be paid and the contribution which has not yet expired shall be paid in installments in accordance with the Company Law. (3) Other circumstances. Article 6 of the Minutes of the National Court Civil and Commercial Trial Work Conference in 2019 stipulates that under the registered capital subscription system, shareholders enjoy term benefits according to law; Where the creditor requests the shareholder who has not completed the time limit to pay supplementary compensation for the debts that the company cannot pay off due on the ground that the company cannot pay off the debts that are due, the people's court shall not support it; However, the following two circumstances are excluded: In the case of the company as the person subject to enforcement, the people's court has exhausted the enforcement measures and has no property available for execution, and has the reasons for bankruptcy, but does not apply for bankruptcy; After the company's debts are incurred, the shareholders (major) of the company will decide or extend the period of shareholders' contribution by other means. Therefore, under the registered capital subscription system, the interests of shareholders in the period of payment of registered capital are protected by law, and in principle, there is no need to pay capital contribution in advance; However, the subscribed capital is not a blank check that never needs to be cashed. In addition to the contribution required by the shareholders of the company at the expiration of the contribution period, the shareholders need to accelerate the contribution and pay the subscribed registered capital in advance under four legal circumstances such as bankruptcy and dissolution.

三、Shareholders fail to fulfill the obligations of the legal liability

Failure of shareholders of a company to fulfill the obligation of capital contribution refers to the behavior of shareholders of a company who fail to perform or fail to fully perform the obligation of capital contribution at the expiration of the term of capital contribution, which can be divided into two types: failure to perform the obligation of capital contribution and failure to fully perform the obligation of capital contribution. The principle of capital maintenance, also known as the "principle of capital enrichment", means that a company should maintain property equal to its total capital in the course of its existence to protect the legitimate rights and interests of the company and its creditors. The failure of shareholders to make contribution violates the principle of capital maintenance of the company, damages the interests of the company and the interests of the creditors of the company, and is prohibited by law. If the shareholders of the company fail to fulfill the obligation of capital contribution, in addition to the obligation of continuing capital contribution, they shall also bear other legal adverse consequences such as compensation for losses. The legal adverse consequences that shareholders may bear if they fail to make their contribution are as follows:
1. Fully fulfill the obligation of capital contribution and compensate for losses. The shareholders of a company shall pay their capital contribution in full and on time according to the articles of association of the company, which is not a blank check. If a shareholder of the Company fails to perform or fully perform his obligation of capital contribution, the Company or other shareholders shall have the right to require him to fully perform his obligation of capital contribution to the Company. Article 13 of the Provisions of the Supreme People's Court on the Application of Certain Issues (3) stipulates: "Where a shareholder fails to perform or fully perform his obligation to contribute capital, and the company or other shareholders request him to fully perform his obligation to contribute capital to the company according to law, the people's court shall support it." In addition to the full performance of the contribution obligation, if the company's shareholder's failure to make the contribution obligation causes losses to the company, the shareholder who has not made the contribution obligation shall also compensate the company's losses, such as interest. In addition, if a shareholder of a limited liability company transfers its shares without fulfilling or fully fulfilling its investment obligation, the assignee knows or should know that the company may, in addition to requiring the shareholder to fulfill its investment obligation, also require the assignee to bear joint and several liability for it.
2. Shareholders' rights are limited. The basic principles of civil law are the unity of rights and obligations and the consistency of interests and risks. The shareholders of a company exercise all the rights of shareholders without fulfilling the obligation of investment, which violates the principle of fairness. It is necessary and reasonable to restrict the rights of defective shareholders. Article 16 of the Provisions of the Supreme People's Court on the Application of Certain Questions (III) provides that: "If a shareholder fails to fulfill or fully fulfill the obligation of capital contribution or withdrawals capital contribution, the company shall, in accordance with the articles of association of the Company or the resolution of the shareholders' meeting, make reasonable restrictions on the shareholder's rights such as the right to claim for profit distribution, the right to preemption of new shares, and the right to claim for the distribution of residual property, and the shareholder requests that the restriction be invalid, the people's Court shall not support it." The company shall have the right to restrict the rights of shareholders of the company who fail to perform their obligations of capital contribution or fully perform their obligations of capital contribution, and urge such shareholders to perform their obligations of capital contribution, provided that the restriction of the rights of shareholders must be clearly stipulated in the articles of association of the company or be voted on by a resolution of the shareholders' meeting; Otherwise, the restriction of shareholders' rights is invalid. If the shareholders of the company are restricted, the shareholders of the company cannot exercise the corresponding rights of shareholders.
3. The qualification of shareholders is terminated. If a shareholder of the company fails to fulfill the obligation of capital contribution, the Company may, through specific procedures, revoke the shareholder's qualification. Article 17 of the Provisions of the Supreme People's Court on the Application of Certain Issues (III) provides that: "Where a shareholder of a limited liability company fails to fulfill his obligation to make capital contribution or withdraws all his capital contribution, and after the company urges him to pay or return the capital contribution, he still fails to pay or return the capital contribution within a reasonable period of time, the company shall, by a resolution of the shareholders' meeting, revoke the shareholder's qualification as a shareholder, and the shareholder requests to confirm that the dissolution is invalid, the people's court shall not support it". Where a shareholder of a limited liability company fails to fulfill his obligation to make capital contribution, and if he still fails to make the payment within a reasonable period after being urged by the company to do so, the company may revoke the shareholder's qualification by a resolution of the shareholders' meeting; If a subscriber of a joint stock limited company fails to pay the amount of the shares it subscribed for on time and still fails to pay the amount within a reasonable period after being called by the company's promoters, the company's promoters may raise additional shares. It should be pointed out that, compared with other legal consequences, the disqualification of shareholders is more severe and final, so it only applies to the situation where shareholders fail to fulfill the obligation of capital contribution or withdraw all capital contribution; The rule shall not apply if the shareholders of the company fail to fully fulfill the obligation of capital contribution. In addition, after the qualification of the shareholder who has not made contribution obligation is discharged, because the shareholder's subscribed capital is still in a hollow state, it is necessary to reduce the "empty" amount of the shareholder's uncontributed part of the registered capital of the company through capital reduction, or other shareholders or a third party to pay the "empty", which is the company's post-obligation after the qualification of the shareholder who has not made contribution obligation.
4. Bear supplementary compensation liability. As mentioned above, the shareholders' failure to fulfill the obligation of capital contribution damages the interests of the company and the interests of the creditors of the company. In the event that a shareholder of a company fails to perform the obligation of capital contribution and damages the interests of creditors of the company, the creditors of the company shall have the right to require the shareholder to bear supplementary compensation liability for the unliquidated part of the company's debts within the scope of the principal and interest of the non-capital contribution. It should be pointed out that the supplementary liability is limited to the shareholder's uncontributed principal and interest, and only applies to the company's debts that cannot be repaid, such as company debts that cannot be executed in place. In addition, if a shareholder of a limited liability company transfers its equity without fulfilling or fully fulfilling its contribution obligation, and the assignee knows or should have known about it, the creditors of the company may require the assignee to bear joint and several liability for the supplementary compensation of the shareholder; After assuming the liability, the assignee may seek compensation from the shareholder who fails to perform or fully perform the obligation of capital contribution, except as otherwise agreed by the parties.

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