Legal basis: Article 3 of People's Republic of China (PRC) Company Law is an enterprise legal person with independent legal person property and legal person property rights. The company is liable for its debts with all its property. Shareholders of a limited liability company shall be liable to the company to the extent of their subscribed capital contribution; Shareholders of a joint stock limited company shall be liable to the company to the extent of the shares subscribed by them.
Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases Article 23 If the parties conclude a sales contract as a guarantee for the private lending contract, and the borrower cannot repay it after the loan expires, and the lender requests to perform the sales contract, the people's court shall try it in accordance with the legal relationship of private lending. The people's court shall allow the parties to change their claims according to the circumstances of the trial. After the judgment made in accordance with the legal relationship of private lending becomes effective, if the borrower fails to perform the monetary debt determined by the effective judgment, the lender may apply for auction of the subject matter of the sales contract to pay off the debt. The borrower or lender has the right to demand the return or compensation of the difference between the auction proceeds and the repayable loan principal and interest.