Introduction:
The author recently handled a case, the facts of which are: In June 2017, an equipment company in Lanzhou, an oil company in Beijing, and an industry and trade company in Dongying signed a tripartite agreement, stipulating that an oil company in Beijing would assume the debt owed by an industry and trade company in Dongying to an equipment company in Lanzhou. A Beijing oil company failed to pay as agreed, and an equipment company in Lanzhou filed a lawsuit, and the People's Court of Fangshan District, Beijing Municipality ruled that a Beijing oil company should pay an equipment company in Lanzhou 5.94 million yuan. After the judgment came into effect, an equipment company in Lanzhou applied for compulsory enforcement, and the court ruled to terminate the enforcement procedure.
Written by Wang Cheng
The author's ** An equipment company in Lanzhou resumed enforcement, and was once again ruled by the court to be final on the grounds that the person subject to enforcement had no property available for enforcement.
At the time of the impasse in enforcement, the author found that a Beijing oil company was established in February 2008 with a registered capital of 10 million yuan, and its shareholders were Zeng, He, Fu and Bao, with paid-in capital of 3 million yuan, 2.5 million yuan, 2.5 million yuan and 2 million yuan respectively. On July 7, 2018, the company made a resolution of the shareholders' meeting to change the company's registered capital to 300 million yuan and filed it with the Beijing Municipal Administration for Market Regulation, and the above four shareholders contributed 293 million yuan, 2.5 million yuan, 2.5 million yuan and 2 million yuan respectively, of which Zeng increased the capital contribution time on February 1, 2028, and the capital contribution method was currency. At the time of the execution of this case, Zeng had not actually paid 290 million yuan in capital contribution.
And soThe author applied to add Zeng as the person subject to enforcementand to bear supplementary liability for the debts of a Beijing oil company within the scope of unpaid capital contributions.
Zeng argued:
The creditor-debt relationship between an oil company in Beijing and an equipment company in Lanzhou was formed before the increase in the registered capital of an oil company in Beijing, and the shareholder Zeng did not bear relevant liabilities for the company's debts before the capital increaseThere is no direct causal relationship between whether an oil company in Beijing can repay the debts of an equipment company in Lanzhou and whether its shareholder Zeng has increased its registered capital thereafterZeng's capital increase is only liable to the company's creditors after the registration of the capital increase of a certain oil company in Beijing, and the creditor's rights arising from the transaction with Zeng Mou, a shareholder of a certain oil company in Beijing, before the capital increase, cannot be required to hold Zeng Mou, a shareholder of the capital increase thereafter. The author ** An equipment company in Lanzhou put forward an opinion: the time of formation of the creditor's right does not affect the creditor's request for the shareholders of the defective capital increase to bear the supplementary liability for compensation;Even if the creditor's claim against the company was formed before the shareholder's defective capital increase, when the company is unable to pay off its debts and the company meets the bankruptcy reasons and does not file for bankruptcy, the creditor can still claim that the shareholder who has not reached the payment deadline shall bear supplementary liability for the company's debts within the scope of the unpaid capital.
The Civil Judgment of Beijing Fangshan District People's Court (2022) Jing 0111 Min Chu No. 1647 applies to the second paragraph of Article 13 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) (hereinafter referred to as the "Company Law Interpretation III") and Article 17 of the Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement (hereinafter referred to as the "Additional Provisions on Enforcement").The judgment supported the litigation claim of an equipment company in Lanzhou, and added Zeng as the person subject to enforcementWithin the scope of the unpaid capital contribution, it shall bear supplementary liability for the debts of a certain oil company in Beijing as determined in the civil judgment. However, the judgment did not make a reasonable judgment on whether the time of formation of the creditor's rights affected the supplementary liability of the shareholders of the defective capital increase, and adopted an evasive attitude.
Zeng appealed, and the Beijing No. 2 Intermediate People's Court made a judgment in the (2022) Jing 02 Min Zhong No. 12322 Civil Judgment"The appeal is dismissed and the original judgment is affirmed".。The judgment stated in this court's opinion that "Zeng's appeal that his capital increase was formed after the creditor's rights and debts relationship between an equipment company in Lanzhou and an oil company in Beijing was formed, so he should not bear supplementary liability lacks legal basis and is not accepted by this court." "There are discrepancies between the relevant cases raised by Zeng in the appeal and the facts of this case, and there is no situation where the same case is judged differently. Moreover, (2003) Zhi Ta Zi No. 33 is a case reply and is not of reference to this case. "After investigation, the court of first instance's determination of this case is in line with the actual situation of the case and the current judicial practice, and this court has no objection."
Combined with a number of other judgments around the world,The author finds that there is a problem that plagues both the theoretical and practical circles:When the creditor's claim against the company is formed after the shareholder's defective capital increase, when the company is unable to pay off its debts and the company meets the reasons for bankruptcy and does not apply for bankruptcy, the creditor can claim that the shareholder who has not yet completed the payment period shall bear supplementary liability for the company's debts within the scope of the capital contribution, that is, the maturity of the shareholder's capital contribution is accelerated, which is no longer disputed in judicial practice. However, when the creditor's claim against the company is formed before the shareholder's defective capital increase, when the company is unable to pay off the debts and the company meets the reasons for bankruptcy and does not file for bankruptcy, can the creditor still claim that the shareholder who has not reached the payment deadline shall bear supplementary liability for the company's debts within the scope of capital contribution?
Disputes in practice
In practice, one view is that the Reply of the Enforcement Office of the Supreme People's Court on the Issue of Whether Shareholders Should Be Liable to the Company's Creditors for Defects in the Capital Increase after the Establishment of the Company should be referred to to determine that the shareholders who contributed capital after the formation of the creditor's rights are not liable for supplementary compensation. This is a negative statement.
Another view is that the provisions of Article 13, Paragraph 2 of Interpretation III of the Company Law should be applied, which does not distinguish between the time of formation of the claims of the company's creditors and the formation time of the shareholders' capital contribution obligations, so even if the creditor's claims against the company are formed before the shareholders' defective capital increase, when the company is unable to pay off its debts and the company meets the reasons for bankruptcy and does not file for bankruptcy, the creditor can still claim that the shareholders who have not yet paid the payment period shall bear supplementary liability for the company's debts within the scope of the unpaid capital. This is an affirmative statement.
There is also a view that the provisions of Article 13, Paragraph 2 of Interpretation III of the Company Law are intended to protect the commercial risks arising from the transactions between the company's creditors and the company based on their trust in the company's ability to perform the contract as reflected in the company's registered capital. Although this article does not distinguish between the time of formation of the company's creditor's claims and the formation time of the shareholder's capital contribution obligation, the trust in the company's ability to perform the contract should still be based on the information registered and publicized by the company, and the risks arising from transactions based on the company's unregistered and undisclosed information should be borne by the creditors themselves, which is more in line with the principle of fairness. This is a negative statement.
The author thinks
The time of formation of the creditor's right does not affect the creditor's request for the shareholder to bear the supplementary liability for the defective capital increase. Even if the creditor's claim against the company is formed before the shareholder's defective capital increase, when the company is unable to pay off its debts and the company meets the bankruptcy reasons and does not file for bankruptcy, the creditor can still claim that the shareholder who has not yet reached the payment period shall bear supplementary liability for the company's debts within the scope of the capital contribution, that is, the accelerated maturity of the shareholder's capital contribution.
Legal basis
Article 3 of the Company Law stipulates that "a company is an enterprise legal person, has independent legal person property, and enjoys the property rights of a legal person. The company is liable for the debts of the company with all its property. The shareholders of a limited liability company are liable to the company to the extent of their subscribed capital contributions......;Article 28 stipulates that "shareholders shall pay in full and on time the amount of capital contributions subscribed by them as stipulated in the articles of association." ......If a shareholder fails to pay the capital contribution in accordance with the provisions of the preceding paragraph, in addition to paying the full amount to the company, it shall also bear the liability for breach of contract to the shareholder who has paid the capital contribution in full on time. Article 178 stipulates that "when a limited liability company increases its registered capital, the capital contribution subscribed by the shareholders for the new capital shall be implemented in accordance with the relevant provisions of this Law on the payment of capital contributions for the establishment of a limited liability company." ......It can be seen that as a shareholder of the company, whether it is a capital increase or a capital contribution, it has the legal obligation to pay the capital contribution in full, and Article 3 of the Company Law applies, and it shall be liable to the company according to law within the scope of its subscription.
Paragraph 2 of Article 13 of Interpretation III of the Company Law stipulates that "if a creditor of a company requests a shareholder who has not fulfilled or has not fully fulfilled its obligation to make capital contributions to bear supplementary liability for the part of the company's debts that cannot be paid off within the scope of the unpaid capital and interest, the people's court shall support it." Article 17 of the Provisions on Supplementary Enforcement also stipulates that "if the assets of an enterprise legal person who is the person subject to enforcement are insufficient to pay off the debts determined in the effective legal documents, and the applicant for enforcement applies to change or add the shareholders or investors who have not paid or have not paid the capital contributions in full, or the initiators who are jointly and severally liable for the capital contributions in accordance with the provisions of the Company Law, as the persons subject to enforcement, and bear liability in accordance with the law to the extent that the capital contributions have not been paid, the people's court shall support them." Neither Interpretation III of the Company Law nor the Additional Provisions on Enforcement distinguish between the time of the formation of claims and the order of the defective capital increase of shareholders, and even if the creditor's claim against the company is formed before the defective capital increase of the shareholders (the capital increase of the shareholders after the formation of the creditor's rights), the shareholders shall be liable for the company's debts to the extent that the capital increase is not fully increased.
The demarcation of whether shareholders are liable for the company's debts does not lie in the time before and after the capital increase, but in the scope of the capital contribution they subscribe. In this regard, Article 17 of the Provisions on the Implementation of Additional Changes does not classify whether shareholders are liable for the company's capital increase before and after the capital increase, but only establishes the applicable threshold of "failure to make capital contributions or insufficient payment of capital contributions", which is consistent with the legislative spirit of the Company Law and related interpretations.
From a legal point of view, the time of formation of the creditor's rights does not affect the supplementary liability of the shareholders who increase their capital by defects: first, as a civil entity with full capacity for conduct, shareholders should make a rational and comprehensive judgment on the company's operating ability before becoming a shareholder of the company;Second, as a shareholder of the company, the company's capital adequacy should be guaranteed, whether it is the original shareholder or the new shareholder;Third, the creditor's rights are equal, and the protection of ordinary creditor's rights should not be treated differently, and the company's creditors request the shareholders to bear supplementary compensation liabilities within the scope of the failure to perform the capital contribution obligation or the failure to fully perform the capital contribution obligation is a way to realize their creditor's rights, and the failure of the shareholder or investor to perform the capital increase obligation or the failure to fully perform the capital increase obligation in the process of the company's capital increase is an infringement of the legitimate rights and interests of the company and the company's creditors by the shareholder with a defective capital increase, and the relevant rights holder should not be treated differently.
Re-acquaintance with the two repliesThe first ambiguity is the "Reply of the Enforcement Office of the Supreme People's Court on the Issue of Whether Shareholders Should Be Liable to the Company's Creditors Due to the Defects in the Capital Increase after the Establishment of the Company" (2003 Zhi Ta Zi No. 33) and the "Reply of the Supreme People's Court on the Enforcement Appeal Case of Xigang Group (2005 Zhi Ta Zi No. 32"), so how to correctly recognize and understand these two replies?
Interpretation using the subrogation right of the company's creditors: Paragraph 1 of Article 535 of the Civil Code stipulates that "if the debtor neglects to exercise its creditor's rights or subordinate rights related to the creditor's rights, which affects the realization of the creditor's due creditor's rights, the creditor may request the people's court to subrogate the debtor's rights against the counterparty in its own name, except that the rights are exclusive to the debtor itself." This article provides for the subrogation of creditors.
The view expressed in the two replies of the Supreme People's Court that whether a company's creditors can hold shareholders liable for defects in the capital increase should distinguish whether the defects in the capital increase are before or after the formation of the company's debts is based on the principle of commercial appearance doctrine and from the perspective of protecting the reasonable trust of third parties. This provision has a certain degree of reasonableness in the context of the implementation of the paid-in system of the company's registered capital at that time, but after the amendment of the Company Law in 2013, the company's registered capital has changed to a subscription system, and external creditors should pay more attention to the company's assets when deciding whether to trade with the company, and whether a company's assets are in good condition is more reflected in the assets under the company's name, including the assets that the company has existed before the creditor and the company has traded with the company, as well as the assets that the company should obtain after the transaction. According to the provisions of the Company Law and its judicial interpretations, shareholders with defective capital increases have the obligation to make up their capital contributions to the company, and the company has the right to request shareholders with defective capital increases. Therefore, when the company is unable to repay the creditor's debts, the creditor can of course exercise the right of subrogation and exercise the right on behalf of the company to the shareholders who have increased the capital with defects, regardless of whether the creditor's claims arise before or after the shareholders have increased their capital, as long as the creditor's claims against the company really exist and have not been repaid.
Interpretation using legal interpretation methods: The Supreme People's Court issued two replies in 2003 and 2006;Interpretation III of the Company Law came into force on 16 February 2011, and the Additional Provisions on Enforcement came into force on 1 December 2016, both after the two replies. Paragraph 2 of Article 13 of Interpretation III of the Company Law and Article 17 of the Additional Provisions on Enforcement provide detailed and specific provisions on the liability of shareholders who have defects in capital increase to the company's creditors. The above-mentioned provisions do not impose other restrictions on the exercise of the rights of the company's creditors, and do not distinguish whether the time of the defect in the capital increase occurs before or after the creditor's rights and debts arise. Therefore, the two replies of the Supreme People's Court should no longer be applied, regardless of whether they are interpreted historically or systematically. Moreover, from the perspective of legal rank, the reply is not a judicial interpretation, but only a reply of the Supreme People's Court to individual cases, and does not have the legal effect of wide application. As stated in the retrial ruling of the Sichuan Provincial High People's Court (2018) Chuan Min Shen No. 2522, "the Reply of the Enforcement Office of the Supreme People's Court on the Issue of Whether Shareholders Should Be Liable to the Company's Creditors Due to the Defects in the Capital Increase after the Establishment of the Company is a 2003 case reply, and according to the principle that the new law is superior to the old law, 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) implemented in 2011 and 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) implemented in 2016 The Provisions of the Supreme People's Court on Several Issues Concerning the Alteration or Addition of Parties in Civil Enforcement" shall be applied in priority. ”
In fact, the Executive Bureau of the Supreme People's Court has clearly pointed out that the (2003) Zhi Ta Zi No. 33 Reply is inconsistent with the provisions of Articles 17 and 18 of the Additional Provisions on Enforcement and Modification, and that the provisions do not make special provisions on the scope of non-liability of shareholders who are not liable for defective capital increases.
The author looks forward to it
The reason why the judgments of local courts are different in judicial practice is caused by the two replies made by the Supreme People's Court more than 10 years ago, and as long as the two replies are not explicitly repealed, there will still be some cases in the future that will continue to use the two replies to make judgments.
Therefore, it seems that the amendment of the Company Law is necessary to respond to this issue. Article 48 of the Draft Amendment to the Company Law stipulates that "in the event that the company is unable to pay off its debts and obviously lacks solvency, both creditors and the company have the right to require shareholders to pay capital contributions in advance", which is more concise and worthy of recognition than the Minutes of the National Work Conference on Civil and Commercial Trial of Courts promulgated by the Supreme People's Court in 2019.
However, in order to completely solve the above problems, the article is proposed to be amended to read: "The time of formation of the creditor's rights does not affect the creditor's request for the shareholders of the defective capital increase to bear supplementary liability for compensation, and in the case that the company is unable to pay off its debts and obviously lacks solvency, both the creditor and the company have the right to require the shareholders to pay the capital contribution in advance." In this way, the kind of problems that plague the theoretical and practical circles can be easily solved.