The legal risk of accounts receivable management | enterprise risk control
Accounts receivable refers to the amount that an enterprise should collect from the purchasing unit or the receiving unit due to the sale of goods, products and services in the normal business process, mainly including the price that the enterprise should collect from the relevant debtor for the sale of goods or the provision of services, as well as the packaging and transportation expenses paid in advance for the purchase of goods. From the point of view of legal nature, accounts receivable is a certain amount of money claims that creditors claim and collect from debtors, and it is a payment claim. Legal risks related to accounts receivable mainly include the following:
1. Accounts receivable are older than the statute of limitations
The limitation of action system refers to the legal system of civil proceedings in which if the right holder does not exercise his rights within the statutory limitation period, he will lose the possibility of protecting his rights according to the proceedings. Article 188 of the Civil Code clearly stipulates that the limitation period of action for requesting the people's court to protect civil rights is three years. If the law provides otherwise, such provisions shall prevail. The limitation period shall be calculated from the date on which the right holder knows or should know that the right has been harmed and the obligor. If the parties do not claim payment of receivables to the debtor within the time limit prescribed by law, the debtor can claim the limitation of action defense, in order to oppose the creditor's right to claim credit. Therefore, enterprises should establish and implement effective legal prevention mechanisms to minimize the risk of accounts receivable exceeding the statute of limitations, such as establishing a reasonable accounts receivable and payable management system and early warning mechanism to prevent accounts receivable exceeding the statute of limitations, enterprises should also clearly specify the procedures and methods for the collection of accounts receivable to avoid the loss of evidence for the collection and the loss of evidence against the statute of limitations.
2. Legal risks of accounts receivable transfer
The legal term corresponding to "transfer of accounts receivable" can be "transfer of claims", which refers to the behavior of the contract creditor to transfer all or part of its claims to the third party. In order to maintain the public interest and transaction order, and balance the interests of both parties to the contract, the transfer of contractual claims to the outside world is subject to certain restrictions. Contractual claims that cannot be transferred to the outside world include: contractual claims that are prohibited by law, contractual claims that are stipulated by the parties in the contract not to be transferred to the outside world, contractual claims that are determined by the nature of the contract. The transfer of creditor's rights is one of the ways for enterprises to dispose of bad receivables, and the recovery of funds through the transfer of creditor's rights is an effective way to recover accounts receivable. What needs to be reminded here is that the transfer of claims must not forget the notification procedure, that is, if the transfer of claims, it is necessary to notify the debtor of the fact of the transfer of claims in time, otherwise the transfer of claims is not binding on the debtor.
3. Legal risk of pledge of accounts receivable
The pledge of accounts receivable is another way for enterprises to make use of accounts receivable financing. The pledge of accounts receivable specifically refers to the way that enterprises sign contracts with banks and other financial institutions, take accounts receivable as collateral, and obtain short-term loans from banks and other financial institutions in the manner of use and payment under the conditions of the term and credit limit stipulated in the contract, and guarantee one claim right with another claim right. Article 228 of the Title of Property in the Civil Code stipulates the conditions for the establishment of the pledge right of accounts receivable: if the accounts receivable is pledged, the parties shall conclude a written contract. The pledge right shall be established at the time of registration of the pledge by the credit investigation institution. According to the Measures for the Registration of Accounts Receivable Pledge, the credit information Center of the People's Bank of China is the registration institution for accounts receivable pledge, and the pledge right is not established if the pledge registration is not handled in the credit information center. The pledgee shall ensure the legitimacy, authenticity and transferability of the basic claims of the accounts receivable, and pay attention to the fact that the pledged claims have no rights defects and can exclude the rights and interests of the third party. At the same time, special attention should be paid to the handling and improvement of the pledge procedures.
4. Fictitious accounts receivable legal risk
In practice, some enterprises based on a variety of reasons (often related to fraudulent factoring financing), there will be some fictitious accounts receivable behavior. If such behavior occurs, it will be pursued for criminal responsibility on charges such as contract fraud, and the gain is not worth the loss.
From the perspective of civil liability, if the enterprise as the debtor cooperated with the creditor to fabricate accounts receivable and helped the creditor to defraude the factoring financing, if the factoring person had reason to believe that the credit of accounts receivable was true, legitimate and valid when signing the factoring contract, the factoring person could still claim that the factoring contract was valid. At this time, the receivables debtor can not confront the factoring on the grounds that the receivables do not exist, which will put the debtor enterprise in a very passive position.
5. The legal risk that debtors fail to exercise their due claims
If the debtor of accounts receivable has its own claims due but fails to exercise them and damages the creditor, the creditor may file an action of subrogation in the people's court to request the debtor to exercise the creditor's rights in its own name. The litigation system of subrogation is an effective debt preservation system, which can reduce the damage to the creditor caused by the debtor's idleness in exercising its creditor's right. According to the current legal practice, the content of the creditor's right of subrogation should not violate the provisions of laws and regulations. In the process of recovering accounts receivable, if the enterprise finds that the debtor has the due but unpaid receivables against the secondary debtor, and the debtor is lazy in exercising its due claims against the secondary debtor, it may file a suit of subrogation against the secondary debtor as the defendant in the people's court at the place where the secondary debtor has his domicile, and the scope of the exercise of the subrogation right is limited to the creditor's claims against the debtor.
【 Case Study 】
In January 2014, the venture capital Company issued a loan of 15 million yuan to Fangyuan Company in the form of entrusted loans through Shanghai Pudong Development Bank Wuxi Branch. In order to ensure the repayment of the above loans, the venture capital company negotiated with Fangyuan Company to provide counterguarantee for the 3,838,574 yuan receivables of Hulaiwu Company. On February 28, 2014, Fangyuan issued the Accounts Receivable Confirmation Letter and the Payment Account (Change) Notice to Huallywood Company respectively, and notified Huallywood Company of its pledge guarantee of 3838574 yuan of accounts receivable for the venture capital company and the change of the collection account. Huallywood confirmed this and waived any defense claims. On March 11, 2014, Fangyuan Company signed the "Accounts Receivable Pledge Guarantee Contract" with the venture capital company, agreeing that Fangyuan Company will pledge 3838574 yuan of Hulaiwu Company's accounts receivable to the venture capital company, and register the pledge in the credit bureau on the 25th of the same month. On March 11, 2014, Fangyuan Company sent a "payment request letter" to Hualaiwu Company, requiring Hualaiwu Company to pay 24900,94.6 yuan for the project progress. On April 16, 2014, Huallywood Company paid 1.49 million yuan to Fangyuan Company according to the above request. On August 12, 2014, the venture capital company sued Fangyuan Company to the Wuxi High-tech Industrial Development Zone People's Court for a loan dispute, and the court ruled that Fangyuan Company returned the venture capital company's loan principal of 7 million yuan and paid the corresponding penalty interest. On August 4, 2015, the venture capital Company filed a lawsuit with the Binhu District People's Court of Wuxi City, requesting the company to give priority to the 3,838,574 yuan of receivables pledged by Fangyuan Company to Huallywood Company, and Huallywood Company to fulfill the payment obligation to the venture capital company within the range of 3,838,574 yuan.
The essential requirement of the pledge of accounts receivable is that there should be real and legal claims of accounts receivable, the creditor of the main contract and the debtor should reach an agreement on the pledge of the accounts receivable, and the notice of the pledge of accounts receivable will be legally binding on the secondary debtor from the date of delivery to the secondary debtor. Fangyuan signed a pledge guarantee contract with the venture capital company, and registered the pledge according to law. Hualiwu Company confirmed the above receivables in the reply to the Receivables Confirmation Letter. Therefore, Fangyuan Company's pledge of the receivables is legal and effective, and the venture capital company's pledge right of the receivables is established. The creditor of the main contract and the debtor should notify the secondary debtor after reaching an agreement on the pledge of accounts receivable, as long as it can show that the secondary debtor knows the fact of the pledge, it can constitute a notice in the legal sense. In its reply to the enquiry letter, Huallywood confirmed that it was aware of the issue of the pledge as informed by Fangyuan and did not raise any objection. As to whether the notice of pledge should be notified after the registration of the pledge, there was no legal requirement and it was not necessary in the specific circumstances of the case. In the legal relationship of accounts receivable as the pledge of rights, the property pledged by the principal contract debtor is actually its right to claim payment of the debts owed by the secondary debtor, and the effect of the pledge notice is to inform the secondary debtor that the disposition of accounts receivable after this should be subject to the pledge right. Therefore, after Hualaiwu Company receives the notice of pledge of the receivables involved in the case, Hualaiwu Company shall dispose of the accounts in accordance with the instructions of the venture capital company, rather than Fangyuan Company; In addition, Hualiwu Company also made a clear commitment to the payment method of the accounts receivable in the Payment Account (Change) Notice (Single Payment). However, Hualiwu Company only applied for the payment from Fangyuan Company after the establishment of the pledge, without obtaining the consent of the venture capital company. It also failed to pay the 1.49 million yuan involved in the case to the designated specific account and deliver the bank acceptance bill to the venture capital company as promised by the company. Therefore, the payment of 1.49 million yuan by Hualiwu Company to Fangyuan Company violates good faith and has obvious mistakes, which damages the pledge rights of the venture capital company. Hualiwu Company should bear corresponding responsibilities for this. According to the pledge guarantee contract between Fangyuan Company and the venture capital Company, Fangyuan Company cannot pay off due debts to the venture capital company, and the Venture capital company has the right to exercise the right to dispose of the pledged accounts receivable, and the accounts receivable involved in the case can be paid directly as a monetary claim with a fixed amount. Therefore, the venture capital company has the right to make a payment claim to Hualaiwu Company for the 3,838,574 yuan receivables that enjoy the right of priority. Therefore, Hualaiwu Company shall not only fulfill the payment obligation to the venture capital company for the 2,348,574 yuan that has not yet been paid to Fangyuan Company, but also fulfill the payment obligation to the Venture capital company for the 1.49 million yuan that has been paid.
Through this case, it needs to be made clear that: When the enterprise is in the position of Huallywood Company in this case, it needs to be alert to the creditor's performance requirements at all times. When the notice of the creditor's accounts receivable has been pledged is served to the secondary debtor, no matter how the creditor requests the secondary debtor to perform the accounts receivable, it should be vigilant and act prudently before communicating clearly with the pledged party.
