If the employer fails to pay social insurance to the employee, and the employee pays part of the social insurance premiums in advance, and the company's equity is transferred, who should claim the social insurance premiums paid in advance?Recently, the Pingyi Court concluded a labor dispute case, let's take a look.
Brief facts of the case
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In April 1997, Mr. Wu joined Company A, which was wholly owned by Company B, but Company A was not operating well and was unable to pay social insurance in full for the workers. In September 2021, Company A issued a receipt and receipt voucher for Mr. Wu, showing that the total amount of social insurance payable by Company A was more than 40,000 yuan. Mr. Wu applied to the Pingyi County Labor and Personnel Dispute Arbitration Commission for arbitration on the above-mentioned amount, and the committee decided not to accept it.
It was also ascertained that in October 2020, Company B (the equity transferor) as Party A and Sun (the equity transferee) as Party B signed the "Equity Transfer Agreement", stipulating: "Target company: Company A. Party A agrees to transfer 100% of the equity of the target company held by Party A to Party B ......After the equity transfer, Company B no longer participates in the decision-making and all business activities of the target company, does not bear the profits and losses and liabilities of the target company, and no longer enjoys the shareholder rights and ...... of the target company"Company A affixed the official seal to the target company, Mr. Li signed and stamped with the legal representative, and Mr. Li signed and stamped with the person in charge of the liquidation group of the target company.
In January 2023, Mr. Wu filed a lawsuit with Company A and Company B as defendants: requesting that Company A and Company B be ordered to repay the social insurance premiums I paid in advance totaling more than 40,000 yuan and interest. The Pingyi Court upheld the appeal in accordance with the law, and then Company A and Company B appealed, and the Linyi Intermediate People's Court rejected the appeal and upheld the original judgment.
Heard by the courts
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As to whether Company A should bear the liability for the repayment of social insurance premiums, Mr. Wu is an employee of Company A, and it is the legal obligation of Company A as an employer to pay social insurance for its employees. If the employer fails to pay the payment on time, it shall be collected by the labor administrative department or the social insurance collection agency in accordance with the law. If the employee pays in advance, the employer shall refund the part of the fees due to the employee, which constitutes unjust enrichment. Mr. Wu's request for Company A to refund the part of the social security fees paid by the individual workers is based on the law and should be supported. The stipulation on the assumption of creditor's rights and debts in the equity transfer agreement of Company A is only valid for both parties to the transfer agreement, and cannot exempt Company A from the debts that should be borne before the agreement is signed.
On the issue of whether Company B should be jointly and severally liable, if the shareholders of a one-person limited liability company cannot prove that the company's property is independent of the shareholders' own property, they shall be jointly and severally liable for the company's debts. In this case, Company B, as a wholly-owned shareholder of Company A, failed to provide an annual financial accounting report and audit materials audited by an accounting firm in accordance with the law, and failed to provide proof that the property of Company A was independent of the property of Company B. To sum up, the stipulation in the equity transfer agreement that the unclear entity shall bear the debts before the transfer is an act of evading debts as stipulated in paragraph 3 of Article 20 of the Company Law, and Company B shall be jointly and severally liable for the debts of Company A.
What the judge saidArticle 62 of the Company Law of the People's Republic of China stipulates that "a one-person limited liability company shall prepare a financial accounting report at the end of each fiscal year and be audited by an accounting firm. Article 63 of the Law stipulates that: "If a shareholder of a one-person limited liability company cannot prove that the company's property is independent of the shareholder's own property, he shall be jointly and severally liable for the company's debts." According to the above provisions, in this case, Company B should have provided but failed to provide the audit information prepared by Company A at the end of each accounting year and audited by an accounting firm, which could not prove that Company A's property was independent of its company's property, and should be jointly and severally liable for the debts of Company A.
Links to legal provisions
Article 72 of the Labor Law of the People's Republic of China: Social insurance** shall determine the funds according to the type of insurance**, and gradually implement social pooling. Employers and workers must participate in social insurance and pay social insurance premiums in accordance with the law.
Article 20 of the Company Law of the People's Republic of China: "Shareholders of a company shall abide by laws, administrative regulations and the articles of association of the company, exercise their rights as shareholders in accordance with the law, and shall not abuse their rights to harm the interests of the company or other shareholders;The independent status of the company as a legal person and the limited liability of shareholders shall not be abused to harm the interests of the company's creditors. Where a shareholder of a company abuses his rights as a shareholder and causes losses to the company or other shareholders, he shall be liable for compensation in accordance with law. Where a shareholder of a company abuses the independent status of the company's legal person and the limited liability of shareholders to evade debts and seriously harm the interests of the company's creditors, they shall be jointly and severally liable for the company's debts. ”
Article 62 of the Company Law of the People's Republic of China: "A one-person limited liability company shall prepare a financial accounting report at the end of each fiscal year and be audited by an accounting firm. ”
Article 63 of the Company Law of the People's Republic of China: "If a shareholder of a one-person limited liability company cannot prove that the company's property is independent of the shareholder's own property, he shall be jointly and severally liable for the company's debts." ”
[**Pingyi County People's Court].
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