Whether a shareholder's defective reduction of capital belongs to an infringement dispute of shareholder withdrawal of capital or a company's reduction of capital dispute directly affects which court should jurisdiction the dispute. In practice, there are many disputes over such jurisdiction, and court judgments are also different. The author recently handled a case of capital reduction dispute, focusing on the analysis of the cause of the case, first determining the cause of the case, and then determining the jurisdiction court, in order to obtain the support of the court. Here is a brief description for my colleagues.

Basic facts of the case

Our party is a natural person shareholder whose company is located in Chaoyang District, Beijing. Due to its failure to notify creditors of capital reduction, the creditor filed a lawsuit with the Pingtan Court in Fujian Province. From Beijing to Fujian, the mountains are high and the road is far, not to mention the success or failure of the case, the round-trip travel expenses are also a large expense. After accepting the commission, the author carefully analyzed the cause of the case and filed an objection to jurisdiction on the grounds that the case was a capital reduction dispute and should be under the jurisdiction of the court where the company is located. The court accepted the author's opinion and ruled to transfer the case to the Chaoyang District Court of Beijing for trial.

Focus issues

Which court should have jurisdiction over the dispute over the reduction of company capital or the liability of shareholders for damaging the interests of company creditors.

Legal analysis

1、 The difference between disputes over company capital reduction and disputes over shareholder liability for damaging the interests of company creditors

Corporate capital reduction disputes refer to civil disputes arising from capital reduction actions during the process of reducing registered capital. The basic standard for the right of claim in this dispute is Article 177 of the Company Law, When a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets. The company shall notify its creditors within ten days from the date of making the resolution to reduce its registered capital, and make a public announcement in a newspaper within thirty days. Creditors have the right to demand the company to repay their debts or provide corresponding guarantees within thirty days from the date of receiving the notice, or within forty-five days from the date of announcement if they do not receive the notice

A shareholder dispute that damages the interests of a company's creditors refers to a civil dispute in which a company's shareholders take responsibility for the company's debts due to the abuse of the company's independent legal personality and limited liability of shareholders, which seriously damages the interests of the company's creditors. The basic standard for the right of claim in this dispute is Article 20 of the Company Law, Company shareholders shall comply with laws, administrative regulations, and the company's articles of association, exercise shareholder rights in accordance with the law, and shall not abuse shareholder rights to harm the interests of the company or other shareholders. They shall not abuse the independent status of the company's legal person and the limited liability of shareholders to harm the interests of the company's creditors. If a company shareholder abuses shareholder rights to cause losses to the company or other shareholders, they shall bear compensation liability in accordance with the law If a shareholder has limited liability, evades debts, and seriously damages the interests of the company's creditors, they shall bear joint and several liability for the company's debts

From the above comparison, it can be seen that the legal basis for the two types of disputes is different, and the legal disputes resolved are also different. The resolution of company capital reduction disputes is a civil dispute caused by shareholder capital reduction behavior. The resolution of disputes over shareholder damage to the interests of company creditors involves the confusion between the company's personality and the shareholder's personality, resulting in the denial of the company's personality and the shareholder assuming responsibility for this.

What kind of dispute does this case belong to? If we explain it from the facts of this case, it may be said that public ownership is reasonable, but the arguments become more chaotic. We need to find a handle and use one move to defeat the enemy.

2、 Starting from the creditor's lawsuit, analyze the legal norms on which the lawsuit is based, and determine that the cause of this case is a dispute over company capital reduction

The creditor's lawsuit request requires us to bear supplementary compensation liability within the scope of capital reduction, indicating that the creditor's lawsuit is based on the company's capital reduction behavior, and should be based on the provisions of Article 177 of the Company Law.

The facts and reasons of the creditor claim that due to the company's failure to directly serve a notice of capital reduction on them and failure to fulfill its obligation to inform them, in accordance with Article 177 of the Company Law, we are required to bear supplementary compensation liability within the scope of capital reduction. This is the legal basis for the creditor to clearly propose their own lawsuit, further proving that the cause of this case is the company's capital reduction dispute.

3、 According to the provisions of the Civil Procedure Law and its interpretation, disputes over company capital reduction shall be under the jurisdiction of the court in the place where the company is domiciled

According to Article 22 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, litigation arising from disputes such as shareholder registration, request for change of company registration, shareholder right to know, company resolution, company merger, division, capital reduction, and capital increase shall be determined in accordance with Article 27 of the Civil Procedure Law.

Article 27 of the Civil Procedure Law stipulates that any litigation arising from disputes over the establishment, confirmation of shareholder qualifications, distribution of profits, dissolution, etc. of a company shall be under the jurisdiction of the people's court of the place where the company is domiciled.
This regulation belongs to special territorial jurisdiction, and the jurisdiction court is clear and unique, which can only be the people's court of the company's domicile. Therefore, this case should be under the jurisdiction of the people's court of Chaoyang District, Beijing, where our company is located.