On May 7, 2017, Company A (supplier) and Company B (buyer) signed a purchase and sale contract, and after the contract was signed, Company B paid the deposit, and Company A organized and arranged the production of equipment. On July 4, 2017, Company A arranged the equipment for consignment. Company B received the equipment on July 14 of the same year, and Company A arranged staff to install and debug the equipment. On September 29, 2017, the shareholders of Company B, Company A, Company B, Company C and Company D respectively transferred all their subscribed capital contributions of 900,000 yuan, 600,000 yuan, 900,000 yuan and 600,000 yuan in Company B to C free of charge, C became the sole shareholder of Company B, and Company B was changed to a limited liability company wholly owned by natural persons. On October 10, 2017, the legal representative of Company B was changed to C. On May 15, 2018, C applied for cancellation of Company B, and the industrial and commercial registration authority deregistered the company on July 3, 2019. As of the time Company A filed the lawsuit, Company B had only paid Company A RMB 240,140 for the equipment, and RMB 245,360 was still unpaid.
The court held that if Company C and Company A, the original shareholders of Company B, failed to fulfill their statutory capital contribution obligations before the transfer of equity, they should bear supplementary liability for the part of the debts incurred by Company B that could not be discharged. At the same time, according to the first paragraph of Article 18 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (III), "if a shareholder of a limited liability company transfers equity without performing or fully performing its capital contribution obligations, and the transferee knows or should know about it, and the company requests the shareholder to perform the capital contribution obligation and the transferee bears joint and several liability for this, the people's court shall support it."Where a creditor of the company files a lawsuit against the shareholder in accordance with the second paragraph of Article 13 of these Provisions, and at the same time requests that the aforesaid transferee bear joint and several liability for this, the people's court shall support it." Therefore, Company C and Company A should each be jointly and severally liable for the debts of Company B borne by C within the scope of RMB 900,000 without capital contribution.
To sum up, shareholders bear limited liability to the company on the basis of capital contribution, but when the company is dissolved, when the shareholders still fail to make capital contributions on time and the assets are insufficient to pay off debts, the shareholders cannot enjoy the protection of limited liability in accordance with the Company Law, and the creditors have the right to require the shareholders to fulfill their capital contribution obligations and repay external debts within the scope of their subscribed capital contributions. The creditor's right to claim the shareholder is based on the principle of limited liability established by the company, with the purpose of protecting the integrity of the company's capital and safeguarding the due interests of the creditor. If a shareholder transfers his or her equity before the expiration of the capital contribution period, he or she shall be jointly and severally liable for the company's debts for insufficient capital contribution when the conditions for accelerated maturity are met.