On The Protection To Creditors Of The Company In Breach Of Notification Obligation Under The Capital Reduction

Article 177 of the "Company Law of the People’s Republic of China" stipulates that the company has the obligation to notify and announce the creditors during the process of capital reduction.At the same time,the creditor has the right to request the company to provide the corresponding guarantee or pay off the debt.However,in view of the fact that the above-mentioned legal provisions lack both the validity requirements and the liability requirements,when a limited liability company fails to perform or effectively perform the notification obligation in the process of capital reduction,how to determine the effectiveness of the company’s capital reduction and whether the creditor is entitled to the request to stop the capital reduction the rights of shareholders,directors and senior managers have become the focus of controversy in theoretical research and judicial practice.Through the research and analysis of the above problems,first of all,the effect of the capital reduction of the limited liability company under the violation of the notification obligation is clarified.On the one hand,clarify the difference between the effectiveness of the company’s capital reduction resolution and the effectiveness of the capital reduction act.On the other hand,based on whether the limited liability company has the ability to pay off debts after capital reduction,if the company does not have the ability to pay off the debts owed to creditors after the capital reduction is completed,the company’s capital reduction shall not be against creditors,that is,capital reduction.relatively ineffective.Secondly,under the premise that the company has not fulfilled or effectively fulfilled the obligation of the notice on the capital reduction,the creditor is given the right to stop the request for capital reduction.At this time,the creditor has the right to request the company to stop the capital reduction through litigation,so as to ensure that the company provides corresponding guarantees or pays off debts in accordance with the law.Finally,it is established that shareholders,directors and senior managers bear civil liability arising from the violation of the notification obligation.Shareholders are not only obligated to make capital contributions during the capital formation stage,but also have the obligation to replenish capital during the capital maintenance stage.Therefore,they need to undertake supplementary compensation liability within the scope of capital reduction and interest for the part that cannot be repaid by the company.However,due to the obligations of loyalty and diligence stipulated by law,the directors and senior managers of a limited liability company shall be liable for supplementary compensation for the part that the shareholders cannot pay when they have intentional or gross negligence for the company’s failure to perform the notification obligation.