Shaanxi Haogong Law Firm Civil and Commercial Research Institute.Article Wang Zihao.
Corporate resolution is the main form of forming the company's intention and realizing the company's autonomy, and is the starting point of the company's autonomy. The determination of the validity of a company's resolution involves the realization of the triple value objectives of the company's internal autonomy, the protection of shareholders' rights and the protection of external creditors, and has an extremely important position and significance in the system of company law rules.
Common situations in which the validity of a corporate resolution is invalid are:
1.The company did not hold a meeting;
2.The meeting does not vote on the resolution;
3.The number of persons attending the meeting or the voting rights held by shareholders do not comply with the provisions of the Company Law or the Articles of Association;
4.The voting results of the meeting do not reach the approval ratio stipulated in the Company Law or the articles of association;
5..Other circumstances that lead to the invalidity of the resolution.
The following takes (2020) Zui Gao Fa Min Zhong No. 720 Liu Jianzhong v. Fujian Red Star Macalline Real Estate***Fujian Markham Investment*** as an example to determine the validity of the company's resolution.
Fujian Red Star Macalline was established on August 20, 2010, and the initiating shareholders are Shanghai Red Star Macalline and Liu Jianzhong, with a registered capital of 600 million yuan, and Liu Jianzhong subscribed and contributed 2400 million yuan. On August 19, 2010, Fujian Red Star Macalline held the first shareholders' meeting to elect Che Jianxing, Liu Jianzhong, Pan Ping, Chen Junyu and Liu Qicai as directors of the first board of directors for a term of three years. On April 25 and 26, 2011, Liu Jianzhong transferred two transfers to Fujian Red Star Macalline for a total of 2400 million yuan, remarks for investment. On April 26, 2011, Fujian Red Star Macalline transferred three transfers to Liu Jianzhong totaling 1200 million yuan, remarks for repayment of loans. On April 27, 2011, Fujian Red Star Macalline transferred four more transfers to Liu Jianzhong totaling 1200 million yuan, remarks for repayment. On December 1, 2011, the legal representative of Fujian Red Star Macalline was changed from Liu Jianzhong to Liu Qicai, and the shareholder Liu Jianzhong was changed to Markham Company. On March 13, 2015, Liu Jianzhong ceased to be a director of Fujian Red Star Macalline. Markham was established on November 8, 2011, and the founding shareholders are Liu Qicai, Liu Jianzhong and Liu Taifan. Since the establishment of Markham, Liu Jianzhong has served as a supervisor of Markham. On November 8, 2011, Liu Jianzhong signed the Equity Transfer Agreement with Markham, stipulating that Liu Jianzhong agreed to hold 40% of the equity of Fujian Red Star Macalline for a total of 2400 million yuan of capital contribution (paid-in 2.)400 million yuan), to 2400 million yuan was transferred to Markham, and other matters were also stipulated in the agreement. On November 8, 2011, the board of directors of Fujian Red Star Macalline formed the "Board of Directors Resolution", which stated: Attendees: Che Jianxing, Liu Jianzhong, Pan Ping, Chen Junyu, Liu Qicai. The content of the resolution: It is agreed that Liu Jianzhong will resign from the position of chairman of the company, no longer serve as the legal representative, and elect Liu Qicai as the chairman of the board of directors of the company and the legal representative of the company. Red Star Macalline provided the Resolution of the Shareholders' Meeting dated November 8, 2011. The resolution states: Participants in the meeting: 1Original shareholders: Liu Jianzhong, Shanghai Red Star Macalline. 2.Markham Company (legal representative: Liu Qicai). Agenda of the meeting: Negotiate and vote on the change of shareholders of the Company. Resolution: 1. It is agreed that Liu Jianzhong, the original shareholder, will subscribe for 40% of the company's equity and contribute 2The paid-in capital contribution of 400 million yuan is 2400 million yuan), to 2400 million yuan of ** transferred to the (new) shareholder Markham Company. After the transfer of shareholders, the capital contributions of existing shareholders are as follows:1The shareholder, Shanghai Red Star Macalline, subscribed to the registered capital of 3600 million yuan, accounting for 60% of the registered capital;Paid-in registered capital 3600 million yuan. 2.Shareholder Markham Company, subscribed registered capital 2400 million yuan, accounting for 40% of the registered capital;Paid-in registered capital 2400 million yuan. 2. Agree to amend the relevant provisions of the company's articles of association in response to the above-mentioned changes, and attach the "Amendment to the Articles of Association" of the company that has been approved by the company. Liu Jianzhong disputed the authenticity of the evidence. Liu Qicai and Liu Jianzhong signed the "Loan Agreement", stipulating that Liu Jianzhong would borrow 96 million yuan from Liu Qicai, and the loan period would be from March 1, 2010 to August 31, 2012, and the loan interest rate would be calculated at 2% per month. In this loan, Liu Jianzhong confirmed that he had received a loan of 96 million yuan from Liu Qicai on March 1, 2010. If Liu Jianzhong fails to repay the above-mentioned loan within the time limit, Liu Jianzhong agrees to give priority to repaying Liu Qicai's loan at the discount of the equity of his investment in Fujian Red Star Macalline through Markham Company and the income generated therefrom, and the priority right shall be exercised by Liu Qicai himself, and Liu Jianzhong shall cooperate if necessary. On January 2, 2019, Liu Jianzhong applied for property preservation, requesting the seizure and freezing of 40% of the equity of Fujian Red Star Macalline under the name of Markham. Sunshine Property Insurance Co., Ltd. *** Fujian Branch voluntarily provides 2$400 million guarantee.
Regarding the nature, establishment and validity of the Resolution of the Shareholders' Meeting.
Liu Jianzhong appealed, arguing that his so-called signature on the Resolution of the Shareholders' Meeting signed on November 8, 2011 was forged, so the agreement was fictitious and forged, and was not Liu Jianzhong's true expression of intent. According to the investigation of this court, the participants and signatories of the resolution are "the original shareholders: Liu Jianzhong, Shanghai Red Star Macalline Enterprise Development*** and the new shareholder "Markham Company". The content of the resolution includes two items: one is to agree to Liu Jianzhong's transfer of the equity involved in the case to the new shareholder Markham Company and confirm the shareholders' capital contribution after the equity transfer involved in the case;The second is to agree to amend the articles of association of the company on the changes related to the equity transfer, with amendments to the articles of association that are agreed to be passed. According to Articles 36 and 37 of the Company Law, the shareholders' meeting of the company, as the authority established within the company, is the company's own affairs and all shareholders have the right to participate in the resolution. The participants in the Resolution of the Shareholders' Meeting involved in the case included Markham Company, which had not yet become a shareholder at that time, and the content of the resolution included the consent of shareholder Liu Jianzhong to transfer the equity involved in the case held by him. Therefore, in terms of the form and content of the resolution, the resolution is inconsistent with the provisions of the Company Law on the shareholders' meeting. In accordance with Article 53 of the Several Provisions of the Supreme People's Court on Evidence in Civil Proceedings, "Where, in the course of litigation, the nature of the legal relationship or the validity of the civil act asserted by the parties is inconsistent with the determination made by the people's court on the basis of the facts of the case, the people's court shall make the nature of the legal relationship or the validity of the civil act the focus of the trial." However, the nature of the legal relationship has no impact on the reasons and outcome of the adjudication, or the relevant issues have already been fully debated by the parties. Where the circumstances in the preceding paragraph exist, and the parties modify their litigation claims based on the circumstances of the court trial, the people's court shall permit and may redesignate the time limit for the presentation of evidence based on the specific circumstances of the case. It is stipulated that the nature of the Resolution of the Shareholders' Meeting involved in the case shall be tried as the focus of the dispute in the second instance of this case in accordance with the law. In the second-instance trial of this case, both parties admitted that the Resolution of the Shareholders' Meeting involved in the case was not a resolution of the shareholders' meeting within the meaning of the Company Law, but neither of them expressed a clear view on its true legal nature. In order to determine the nature of the Resolution of the Shareholders' Meeting involved in the case, comprehensive consideration should be taken into account such as the background of the contract, the identity of the contracting entity, and the main content of the resolution. According to the ascertained facts, the Resolution and the Equity Transfer Agreement signed on the same day are the same in terms of the subject of the equity transfer and the subject of the transferee, the proportion of the equity transfer, the company where the equity is located, and the price of the equity transfer. Combined with the procedural requirements for equity transfer in Articles 71 and 72 of the Company Law, it can be determined that the Resolution of the Shareholders' Meeting is in essence a resolution in which the other shareholders jointly agree in writing to Liu Jianzhong's transfer of the equity involved in the case to Markham Company, confirm the shareholders' capital contribution after the transfer, and agree to amend the articles of association of the company by way of a resolution of the shareholders' meeting. Other shareholders agreed in writing to the equity transfer in their personal names, and some agreed to amend the articles of association in the form of a resolution made by the shareholders' meeting of Red Star Macalline. In other words, the agreement has both the written consent of other shareholders to the equity transfer involved in the case and the resolution of the shareholders' meeting, rather than a simple resolution of the shareholders' meeting.
On the issue of whether the Resolution of the Shareholders' Meeting involved in the case was valid, Liu Jianzhong appealed, claiming that his signature on the resolution was forged by others, so the resolution was invalid. Since whether or not one party to the resolution signed the resolution related to whether it participated in the voting as a party to the resolution and the content of the resolution recorded in the resolution, and whether the resolution did not form a common expression of intent on the content of the resolution due to the lack of the signature of the party to the resolution, resulting in the failure of the resolution to be established, this court allowed the parties to fully express their opinions on this in the second-instance trial. Liu Jianzhong said in court that the resolution was not established, and from the perspective of the resolution submitted to the industrial and commercial department that led to the registration of the change of equity, the resolution should be invalid. However, Markham Company and Red Star Macalline believed that the resolution had been established and put into effect, otherwise Liu Jianzhong's claims in the first and second instance were wrong. As to whether the Resolution of the Shareholders' Meeting involved in the case is established, a comprehensive judgment should be made based on the relevant facts of the case. First, the Equity Transfer Agreement involved in the case proved that Liu Jianzhong had the intention of transferring the equity involved in the case to Markham Company and had already started to implement the relevant transfer. According to the ascertained facts, the equity transfer subject and transferee, the proportion of equity transfer, the company where the equity is located, and the equity transfer price signed by Liu Jianzhong on the date of the Resolution of the Shareholders' Meeting involved in the case are consistent with the relevant contents of the Equity Transfer Agreement, which shows that Liu Jianzhong has agreed to the content of the Resolution of the Shareholders' Meeting on the date of the resolution of the shareholders' meeting involved in the case. Second, the "Resolution of the Board of Directors" signed on the same day as the "Resolution of the Shareholders' Meeting" recognized by Liu Jianzhong had agreed that Liu Jianzhong should resign as the chairman of the board of directors of the company and no longer serve as the legal representative of Red Star Macalline, and elected Liu Qicai, who represented Markham, as the chairman and legal representative. Liu Jianzhong appealed, claiming that the reason for the transfer of the positions of legal representative and chairman of the board of directors was because there were many companies under his name and his energy was limited, so he was handed over to his cousin Liu Qicai to manage. However, from the perspective of the commercial practice of withdrawing from the company after the transfer of all the shares, ceasing to hold an important position in the company and electing a new shareholder or his representative to take up that position, Liu Jianzhong would not have taken the initiative to resign from the important position of the company's legal representative and chairman of the board of directors if he did not agree with the content of the transfer of the equity involved in the case to Markham Company and no longer served as a shareholder of Red Star Macalline Company in the Resolution of the Shareholders' Meeting involved in the case. The Equity Transfer Agreement signed on the same day confirmed the above-mentioned commercial practice of transferring equity and handing over important positions in the company. Third, after the change of equity involved in the case was registered in the name of Markham, Liu Jianzhong did not raise any objection for a long time, which was not in line with his daily life experience. Although Liu Jianzhong appealed, he claimed that he was only a supervisor of Markham Company and did not participate in the operation and management of the company, and he did not know about the equity transfer involved in the case. However, it can be seen from the shareholders listed in the application for the establishment and registration of Markham Company submitted on the same day as the signing of the Resolution of the Shareholders' Meeting involved in the case that Liu Jianzhong still had the status of a shareholder of Markham Company at that time. Therefore, Liu Jianzhong was not only a shareholder of Markham Company at that time, but also a supervisor of Markham Company, and at the same time the transferor of the equity involved in the case transferred by Markham Company. Therefore, Liu Jianzhong's statement that he did not know that the equity had been changed to the name of Markham because he did not participate in the production and operation of Markham Company was contrary to his due knowledge of the performance of the equity transaction involved in the case because he had a triple identity at that time. Fourth, Liu Jianzhong's appeal that he would not agree to the content of the Resolution of the Shareholders' Meeting on the premise of not receiving the equity transfer money is inconsistent with the ascertained facts. According to the Equity Transfer Agreement involved in the case, Markham agreed to pay a one-time transfer fee of RMB 240 million to Liu Jianzhong within 10 days from the date of signing the agreement. Based on his daily life experience, if Liu Jianzhong did not receive the huge amount of money within the agreed time, he would have actively claimed payment from Markham. However, it did not take positive remedial measures when it did not receive the equity transfer money for a long time. In this regard, Liu Jianzhong's reason is that he has repeatedly asked Markham Company for it, but because he did not know that the equity registration had been changed, he did not sue in time to protect his rights. Since Liu Jianzhong was holding a triple identity at the time, he should have known that the equity involved in the case had been changed and registered in the name of Markham. Moreover, from a common sense point of view, regardless of whether or not he knew that the equity involved in the case had been changed and registered, Liu Jianzhong, as the transferor of the equity involved in the case, should also negotiate with the transferee in a timely manner on issues such as the next performance or termination of the agreement when the other party fails to pay a huge amount of equity transfer money as agreed. Therefore, Liu Jianzhong's reasons for not actively asserting contractual rights for a long time are also inconsistent with his daily life experience. From the above, the fact that Liu Jianzhong signed the Equity Transfer Agreement and participated in the Resolution of the Board of Directors on the same day and agreed to transfer his position as the chairman of Red Star Macalline as the legal representative to Liu Qicai of Markham, the transferee of the equity, Liu Jianzhong was a shareholder and supervisor of Markham Company at the time, and Liu Jianzhong did not claim a huge amount of equity transfer money for a long time and did not exercise shareholder rights as a shareholder of Red Star Macalline, all of which show that Liu Jianzhong had no objection to the registration of the change of equity involved in the case to Markham Company at that time. In other words, Liu Jianzhong has expressed the same intention with other shareholders to handle the change of registration of the equity transfer involved in the case. Although Liu Jianzhong submitted an advisory opinion unilaterally entrusted by him in the first instance as evidence to prove that the signature on the Resolution of the Shareholders' Meeting involved in the case was forged, the opinion was only formed by Liu Jianzhong's unilateral entrustment and was not a judicial appraisal opinion entrusted by the court, and the relevant facts before and after the signing of the resolution as verified by the first instance can prove that Liu Jianzhong should have in fact agreed to the content of the resolution, so the first-instance judgment found that the content of the Resolution of the Shareholders' Meeting involved in the case was Liu Jianzhong's true expression of intent, and it was not improper. Since Liu Jianzhong has formed a common expression of intent with other shareholders on the content of the Resolution of the Shareholders' Meeting, it can be determined that the resolution has been established from the perspective of the written consent to the equity transfer involved in the case or the resolution of the shareholders' meeting. As for the validity of the Resolution of the Shareholders' Meeting, the case was involved. Since its content was Liu Jianzhong's true expression of intent and did not violate the provisions of laws and administrative regulations, Liu Jianzhong's appeal claim that the resolution was forged and not his true expression of intent and violated the provisions of the Company Law could not be supported.
The adjudication of disputes over the validity of corporate resolutions shall follow the basic principles of respecting the company's autonomy of will, paying attention to the characteristics of the company's organization, and guiding the company's standardized governance, and review whether the resolution has passed due process and democratic decision-making and whether the content complies with the articles of association and legal provisions from both procedural and substantive dimensions, so as to finally determine the validity of the company's resolution.
Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (4).
Article 5: Where a resolution of a shareholders' meeting, a general meeting of shareholders, or a board of directors exists in any of the following circumstances, and the parties claim that the resolution is not established, the people's court shall support it:
1) If the company has not convened a meeting, except that in accordance with the second paragraph of Article 37 of the Company Law or the articles of association of the company, a decision may be made directly without convening a shareholders' meeting or a general meeting of shareholders, and all shareholders shall sign and seal the decision document;
2) The meeting does not vote on the resolution;
3) The number of persons attending the meeting or the voting rights held by shareholders do not comply with the provisions of the Company Law or the articles of association;
4) The voting results of the meeting do not reach the approval ratio stipulated in the Company Law or the articles of association;
5) Other circumstances that lead to the failure of the resolution.
Companies Act
Article 22 The content of the resolution of the shareholders' meeting, the general meeting of shareholders or the board of directors of the company shall be invalid if it violates laws and administrative regulations.
Where the convening procedures and voting methods of the shareholders' meeting, the general meeting of shareholders or the board of directors violate laws, administrative regulations or the articles of association, or the content of the resolution violates the articles of association, the shareholders may request the people's court to revoke the resolution within 60 days from the date on which the resolution is made.
Where a shareholder initiates a lawsuit in accordance with the provisions of the preceding paragraph, the people's court may, at the request of the company, require the shareholder to provide corresponding guarantees.
If the company has already changed the registration in accordance with the resolution of the shareholders' meeting, the general meeting of shareholders or the board of directors, the people's court shall apply to the company registration authority for cancellation of the change registration after the people's court declares the resolution invalid or revokes the resolution.