Question raising

Both Party A and Party B are limited liability companies. Due to a dispute over the sales contract, both parties filed a lawsuit in court. The court ordered the termination of the sales contract, and Company A returned more than 2 million yuan in payment to Company B. After the judgment came into effect, Company B applied to the court for compulsory enforcement. After investigation, the court found that there was no property under Company A's name that could be enforced. Therefore, Company B applied to the court to add two natural person shareholders of Company A, C and D, as the enforced persons. After examination, the court found that Company C and Company D had subscribed their capital contributions and the deadline for their contributions had not yet expired. Therefore, the court ruled to reject Company B's additional application. Company B was dissatisfied and filed an objection to execution, but the court ultimately ruled against Company B's request.

Lawyer Interpretation

The revised Company Law in 2013 established a complete capital contribution system, abolished the statutory limit on the deadline for capital contribution, and shifted it to shareholder autonomy for decision-making. However, shareholders of limited liability companies still have the obligation to assume responsibility for the company up to the amount of their subscribed capital. Article 17 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Execution (Revised in 2020)" (hereinafter referred to as the "Change and Addition Provisions") stipulates that when the company's assets as the debtor are insufficient to repay the debts determined by the effective legal documents, the applicant for enforcement may apply for the addition of shareholders who have not paid or fully paid their capital contributions as the debtor. However, there is some controversy in practice as to whether "unpaid or insufficient contribution" in this provision includes the situation of "non subscribed contribution deadline".

Some cases believe that the shareholder contribution subscription system is a clear provision of the current Company Law, and the interests of shareholders who receive payment of capital in accordance with the law are protected by law. The direct provisions in the current legislation on the obligation of shareholders to accelerate the maturity of capital contributions under the subscription system are only limited to the liquidation of the company's bankruptcy and dissolution. Adding shareholders who have not paid their capital contributions in time violates the principle of statutory enforcement and does not comply with legal provisions, Therefore, it should not be added.

There are also cases that believe that the obligation to contribute is a legal obligation of shareholders, and the provisions on the contribution period in the articles of association are only specific arrangements for their legal obligations. The agreement on the contribution period should be based on the premise that it does not harm the rights and interests of the company and its creditors. When the existing assets of the company are insufficient to repay the company's debts, it is legitimate for the company's creditors to demand that shareholders who have not yet expired the contribution period fulfill their contribution obligations. Therefore, Article 17 of the Regulations on Changes and Additions stipulates that "failure to pay or insufficient payment of capital contributions" includes the situation of "failure to subscribe for capital contributions within the specified time limit", and the shareholders who have not subscribed for capital contributions within the specified time limit should be added as the executors.
From this, it can be seen that when the company has no property available for enforcement, the applicant for enforcement may not necessarily receive the support of the court if the shareholder who has not yet reached the deadline for additional capital contribution applies to the court as the debtor.