Company A was jointly funded and established by a number of people, and a real estate investment was used as the business premises of Company A. According to the industrial and commercial registration and shareholders' register, the proportion of capital contribution made by Party A to Company A is 15%. According to the articles of association, a shareholders' meeting is held once a year. However, after the establishment of Company A, there have been long-term conflicts among the shareholders of the company due to issues such as company operation, and no shareholders' meeting has been held. A believes that Company A has actually reached an impasse, so he files a lawsuit with the court requesting the dissolution of Company A. However, Company A claims that because Party A has not registered the transfer of the property it has contributed to Company A's name, it is a failure to fulfill its shareholder's investment obligations in accordance with the agreement, and it does not enjoy shareholder rights and has no right to request the court to dissolve the company.

Lawyer Analysis

1、 Legal situation of shareholders applying for dissolution of the company

Article 182 of the Company Law stipulates that if a company encounters serious difficulties in its operation and management, and its continued existence will cause significant losses to shareholders' interests, which cannot be resolved through other means, shareholders who hold more than 10% of the voting rights of all shareholders of the company may request the People's Court to dissolve the company.

The situations described above mainly include: the company has been unable to hold a shareholders' meeting or shareholders' meeting for more than two years; "When shareholders vote, they are unable to reach the proportion prescribed by law or the articles of association, and cannot make effective resolutions at the shareholders' meeting or shareholders' meeting for more than two years;"; The long-term conflict between the directors of the company, which cannot be resolved through the shareholders' meeting or shareholders' meeting, etc., leads to serious difficulties in the company's operation and management, and the continued existence of the company will cause significant losses to the interests of shareholders. In such cases, the court may determine that the company has reached a deadlock, and shareholders who individually or collectively hold more than 10% of the voting rights of all shareholders of the company may file a lawsuit to dissolve the company.

2、 Whether the shareholders with "defective capital contributions" have the right to file a lawsuit for dissolution of the company

Article 16 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (III) stipulates that:, "If a shareholder fails to fulfill or fully fulfill his/her capital contribution obligations or withdraws his/her capital contribution, the company shall, in accordance with the articles of association or resolutions of the shareholders' meeting, impose corresponding reasonable restrictions on his/her rights to profit distribution, preemptive rights to new shares, residual property distribution, and other shareholder rights. If the shareholder requests to determine that the restrictions are invalid, the people's court shall not support them.". The court held that the restrictions on shareholders' rights set forth above do not include the right to request the dissolution of the company. From the perspective of safeguarding the legitimate rights and interests of minority shareholders, if the company has reached a deadlock, conflicts between shareholders are difficult to resolve, and minority shareholders cannot participate in the company's decision-making, management, and profit sharing, the existence of the company has become meaningless for minority shareholders. In this case, dissolution of the company is the only option. Therefore, the court in this case finally determined that Party A has the right to file a lawsuit to dissolve the company.

It should be noted that the reason for filing a lawsuit for dissolution of the company must be the existence of the aforementioned legal situation of deadlock in the company. "If a shareholder files a lawsuit to dissolve a company on the grounds that their rights and interests such as the right to know and the right to request profit distribution have been damaged, or the company has suffered losses or insufficient property to repay all its debts, or the company has been revoked its business license as a legal person and has not been liquidated, or other issues exist in the company, the people's court will not accept the lawsuit.".

 (This article is translated by software translator for reference only.)