Research On Legal Problems Caused By Defective Capital Contribution Of Shareholders

Capital contribution of shareholders is the material basis of existence of company,and the most important and fundamental way of company's capital formation. For thecreditors of company, capital contribution is the basis of credit for company to takeresponsibility. Therefore, whether shareholders contribute in accordance with thesponsors'agreement (including the subscription agreement), the articles of associationand relevant laws, shall have an important impact not only on company itself andother shareholders, but also on anythird partyas the creditors of company.Company Law encourages shareholders to contribute in various ways and allowsinvestors to pay capital contribution in phases, which shall objectively aggravate therisk of defective capital contribution. Based on nature of obligation of capitalcontribution of shareholders and its basis, this article analyses specific forms ofdefective capital contribution, property responsibility of defective shareholders andrestrictions on exercise of equity of defective shareholders and removal ofshareholders, and all these are of great significance for both theory and practice.Fundamentally, Nature of obligation of capital contribution is a kind ofcontractual obligation which derive from the sponsors'agreement and subscriptionagreement. Study on types of defective capital contribution on the basis of existinglaws and regulations is of great theoretical and practical significance.The obligation of capital contribution for shareholders derives from the sponsors' agreement and subscription agreement. Sponsor shareholders who contributedefectively shall assume liability for company for breach of contract and othershareholders shall assume joint and several liabilities for company due to defectivecapital contribution. Sponsor shareholders shall assume liability for breach of contractto other shareholders, and under particular circumstances, sponsor shareholders shallassume liquidation responsibilities to the company creditors. For subscriber of shares,generally they shall assume liability to the company only for their own defectivebehavior. Under the circumstances of assignment of defective equity, the effectivenessof the contract of assignment of defective equity shall be determined by subjectivestate of the transferee. If the transferee knows or should know that the equity which heis going to purchase is defective, he shall assume joint and several liabilities with thetransferer. But if the transferee doesn't know or should not know the fact of defectivecapital contribution, he can rescind the contract and don't take any responsibility.Shareholders of defective capital contribution shall assume liability for companyand the company's creditors. But shareholders fail to perform their duties, even if thecourt enforces them to perform their duties. In such circumstances, this articlesuggests that our country should perfect the system of restriction to exercise of equityof shareholders of defective capital contribution and establish the system of removalof shareholders of defective capital contribution.