On Violation Of The Contribution Obligation To Shareholders And Other Shareholders Of The Legal Remedies

Paying for the subscribed capital is the most basic and important obligation of shareholders, the performance of this obligation is the precondition for the enjoyment of rights to the corporation by shareholders. The non-performance of or improperly performance of the obligation to pay for the subscribed capital will inevitably cause damage not only to the corporation or its creditors but also to other shareholders as well. Consequently, the law should provides certain remedy for the other shareholders in order to compensate them for their losses suffered due to the non-performance of the obligation by the aforementioned shareholders. Otherwise, it will be unfair for the other shareholders and will do harm to shareholders'willingness to performing their obligations. In reality, there are different kinds of non-performance of the capital obligation with different consequences for the other shareholder. The Corporation law of PRC describes a few of the ways, which, however, are too general and to narrow to be practically useful in the practice. As to the liabilities the violating shareholders should take for the other shareholders, the Corporation Law of PRC only stipulates the nature of the liability without giving any detailed liabilities, which makes it very difficult for other shareholders to claim for their compensation, losses or other remedies against the violating shareholders. From a view of comparative law, the corporation laws in other countries generally give the other shareholders a series of remedies to compensate for their losses while at the same time, the remedies available to the other shareholders under the Corporation Law of the PRC are very limited even with the complement from a few of some internal guidance, judicial interpretation and governmental regulations.