The New Company Law: Should Company Shareholders Bear Limited Liability?

The shareholders' meeting of the company shall bear limited liability. Under normal circumstances, the shareholders of a limited company are liable to its company to the extent of the subscribed capital contribution, and a limited company is liable to its company to the extent of the subscribed shares. Of course, under special circumstances, when shareholders undermine the independence of the company's property, shareholders need to bear special corresponding responsibilities for the company's debts.

Legal analysis

Generally speaking, the applicable occasions of the system of disregard of corporate personality mainly include the following contents: (1) The parties use the form of corporate to circumvent the law, that is, when the actor is unable to implement an act due to legal restrictions, he uses the company as another independent subject in law to complete the act. (2) The parties use the corporate personality of the company to evade contractual obligations. (3) The company's capital is obviously insufficient. Whether the capital is sufficient can indicate whether investors have the sincerity to use the company's personality to engage in related operations. Investors can reduce the investment risk rate with their own low capital, thus transferring the risk to the relevant creditors. (4) The company's personality is confused with that of other members, and the company is actually an agent and a tool to become a shareholder. When the shareholders of a company abuse the corporate personality and infringe on the legitimate rights and interests of creditors, the people's court may deny the corporate personality on the basis of confusion of personality and make the shareholders bear corresponding joint and several liabilities.

legal ground

Article 20 of the Company Law of People's Republic of China (PRC) Company shall abide by laws, administrative regulations and articles of association, exercise their rights according to law, and shall not abuse their rights to harm the interests of the company or other shareholders; The company's independent legal person status and the limited liability of shareholders shall not be abused to harm the interests of the company's creditors. Shareholders of a company who abuse their rights and cause losses to the company or other shareholders shall be liable for compensation according to law. Shareholders of a company who abuse the independent status of a company as a legal person and the limited liability of shareholders to evade debts and seriously damage the interests of creditors of the company shall be jointly and severally liable for the debts of the company.