Directors’ Liability For Shareholder’s Arrears In Capital Contribution

It is self-evident that capital is vital to a company.With the implementation of the capital subscription system,the proportion of non-subscription capital and the time limit of subscription capital have been denounced.But it is undeniable that the reform of the subscribed contribution system is legitimate,that is,to give companies capital flexibility,further activate the vitality of the market economy.In the practice,many small and micro enterprises,scientific and innovative enterprises do enjoy the benefits after the reform of the subscribed contribution system.As a result,the most important thing at this moment is to establish and perfect the back-end rules of the capital system.Therefore,by strengthening directors’ liability as the starting point,basing on the specific conditions of China,the author analyzes the status of directors in the shareholder contribution of capital and the predicament of liability identification of directors and tries to smooth the relationship between the nonpayment of capital contribution by shareholders and directors’ liability,in order to improve the liability system of directors and promote the optimization of the corporate governance structure.Chapter I starts from the present situation of director’s liability of shareholder’s capital contribution in our country.Firstly,it analyzes the legislation and judicature of director’s liability from two dimensions: the legal basis and the judicature,and then introduces the relation between director and capital through a specific case.Secondly,it analyzes the dilemma and causes of directors’ liability when shareholders’ capital contribution is not paid.At present,there are three major problems in our country,namely,unclear paths for directors to assume responsibilities,lack of specific procedures for directors to call for payment of shareholders’ capital contributions,and imperfect system for directors to assume responsibilities.Behind these problems,the underlying reasons are the difficulty in legislation on directors’ obligations,the diversification of company types and irregular internal management,and the lack of theoretical research and practical basis.Chapter II analyzes the two main reasons why the director should bear the responsibility when the shareholder’s contribution is not paid.Firstly,directors have the obligation to call the shareholders to pay the capital contribution.From the perspective of the creditor of "capital",namely,the company,the necessity to establish the payment call system is expounded.Moreover,it is demonstrated that the board of directors is the execution body that calls for the shareholders on behalf of a company through the relationship between directors and the company.Secondly,there has been an inevitable and justified trend to increase directors’ responsibility for the capital of the company.Increasing directors’ liability is an important part of improving the back-end risk prevention mechanism of the capital system;meanwhile,forcing directors to bear liabilities facilitates the exercise of the company’s right to raise funds,prevents the risks arising from capital contributions by shareholders to a certain extent,and protects creditors.Chapter III expounds the determination and assumption of the directors’ liability in case of the shareholder’s defaulted contribution.First of all,there are two situations that the director should bear the responsibility:(a)the directors fail to make calls for the payment of debts when the subscription period expires,and(b)the company is under the circumstance of "unable to repay the due debts and obviously lacks the solvency",but the directors do not urge for payment.Secondly,the author deeply analyzes the element of "causal relationship".Finally,the author responds to the question "from whom do directors have the obligation to call?" and believes that the only person entitled to call directly and beneficiary is the company,while shareholders and creditors are only indirect beneficiaries and only enjoy the subrogation status in litigation.Chapter IV mainly elaborates how to improve the director’s liability system of shareholder’s unpaid contribution.Secondly,in order to ensure the due performance of the payment collection obligation,specific payment collection procedures shall be established.Finally,the liability limitation system of directors shall be established.From the perspective of method,the method may be adopted by the prior agreement in the articles and resolutions at the shareholders’ meeting.From the perspective of compensation amount,the causality and proportional causality,as well as the director’s salary shall be taken into account,and the maximum amount of compensation shall be the amount of capital contribution made by the shareholders.