Study On The Debt Relief Case About X Company V.H Company And It's Shareholder

In 2013,amendments on the Act of Company established the subscription system of registered capital and eliminated the proportion limit between the minimum registered capital and initial investment,changing the statutory term of investment into discussible term of investment.The aim of this amendment is explicit,which is about encouraging investment,promoting economic development and employment.However,this amendment did not improve the protection system of the original creditors while relax supervisions on the investors.In addition,partial legal provisions are not specific enough and it is easy for shareholders to make use of the subscription system to encroach on the interests of creditors.The debt settlement case of Company X suing Company H is triggered by the query whether shareholders'investment liability can expire sooner under the subscription system,and the dispute points in this case are mainly concentrated in three aspects:the validity of two capital movements of Company H,the validity of the two equity transfer agreements inside Company H and the distribution of liabilities of shareholders in Company H.On the first controversial focus,there is a lawful and effective shareholders' meeting resolution for Company H's capital increase behavior,and it does not harm the proportional interests of small shareholders;the sponsors invested according to the contract and registered relevant changes,which should be deemed to be effective.As the capital reduction of Company H did not go through the resolution of a legally valid shareholder meeting,it should be deemed ineffective for a lack of fundamentals of law.On the second controversial focus,in Mr.Mao and Mr.Lin's equity transfer process,the two are independent of each other as parties to the equity transfer agreement and they agreed on the meaning of the main terms;the equity transfer agreement was voluntarily made by the two parties with authentic indications;the underlying stock rights does exist and the contractual contents do not violate legal requirements or social and public interests;therefore,the stock right transfer between Mr.Mao and Mr.Jie should be deemed valid according to "effectiveness theory",and Mr.Lin shall become a shareholder instead of Mr.Mao.In the stock right transfer process between Mr.Xu and Mr.Jie,the underlying stock rights did not exist from the very beginning thanks to the capital reduction of Company H,and as the two parties didn't agree on the main terms of stock right transfer,the transfer was not valid due to the dispute between Mr.Xu and Mr.Jie,and Mr.Jie cannot become a shareholder of Company H instead of Mr.Xu.On the third controversial focus,according to the"generalization theory",if shareholders do not(or fully)perform of the investment obligations under the subscription system when terms of capital contribution has not expired,their investment is deemed to be flawed.Mr.Xu and Mr.Jie shall undertake additional liability for compensation in terms of an insolvent part of the debt of Company H within their non-investment scopes.The stock right transfer between Mr.Mao and Mr.Lin is deemed as defective stock right transfer and as Mr.Lin was aware of the fact of defective investment,Mr.Mao shall undertake additional liabilities for the outstanding debt of Company H within the defective investment scope,and Mr.Lin and Mr.Mao shall bear joint liabilities.As Mr.Jie did not become a shareholder of Company H,he shall not undertake relevant responsibilities.