What are the provisions for a one-person limited liability company to provide guarantees for shareholders?
A one-person limited liability company shall provide the following guarantees for shareholders:
1. The people's court will not support the company's claim that it will not assume the guarantee liability on the grounds of violating the Company Law's provisions on the company's external guarantee settlement procedures.
2. If the company is unable to pay off other debts due to the guarantee liability, the shareholders who provide the guarantee cannot prove that the company's property is independent of their own property, and other creditors request the shareholders to bear joint liability, the people's court shall support it.
From the above, it can be seen that Article 10 of the Civil Code explains the guarantee system as follows: A one-person limited liability company provides guarantee for its shareholders, and the people's court does not support the company's claim that it will not assume the guarantee responsibility on the grounds of violating the Company Law's provisions on the company's external guarantee resolution procedures.
Legal basis:
The Supreme People's Court's explanation on the application of relevant guarantee system
Article 10
If a one-person limited liability company provides a guarantee for shareholders, the people's court will not support it if the company claims that it will not assume the guarantee responsibility on the grounds of violating the provisions of the Company Law on the resolution procedure of the company's external guarantee. The people's court shall support the company's failure to pay off other debts due to its guarantee liability, and the shareholders who provide the guarantee cannot prove that the company's property is independent of their own property, and other creditors request the shareholders to bear joint and several liabilities.