Confirmation of Shareholders' Qualification in the Case of Defect in Capital Contribution

Legal analysis: determination of shareholder qualification in the case of defective capital contribution;

1. The establishment of the company is invalid due to serious defects in capital contribution. If the registered capital is falsely reported according to Article 199 of the Company Law, and the circumstances are serious, resulting in the cancellation of the company registration or the revocation of the business license, the company will be dissolved, the legal person qualification will be eliminated, and the shareholder qualification will also lose its existence premise. Therefore, it can be concluded that shareholder qualification will cease to exist with the elimination of corporate status.

Second, the capital contribution is flawed, but it has not reached the point where the company is invalid. Even if the shareholder's capital contribution is completely false or the shareholder withdraws all his capital contribution after capital contribution, as long as he still has the formal requirements for obtaining shareholder qualification, including the name of the shareholder has been recorded in the company's articles of association or the register of shareholders, or the corresponding industrial and commercial registration procedures need to be handled, the actor with defects shall be deemed to have shareholder qualification.

Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of People's Republic of China (PRC) (III).

Article 16 Where a shareholder fails to perform or fails to fully perform his capital contribution obligations or withdraws his capital contribution, the company shall, in accordance with the articles of association or the resolutions of the shareholders' general meeting, impose corresponding reasonable restrictions on his shareholders' rights such as the right to claim for profit distribution, the right to subscribe for new shares and the right to claim for the distribution of surplus property, and the people's court shall not support the shareholders' request if it is deemed invalid.

Article 17 If the shareholders of a limited liability company fail to perform their capital contribution obligations or withdraw all their capital contribution, and fail to pay or return their capital contribution within a reasonable period after being urged by the company, the company will be disqualified by a resolution of the shareholders' meeting, and the people's court will not support the shareholders' request to confirm that the dissolution is invalid.

In the case specified in the preceding paragraph, the people's court shall make it clear in the judgment that the company shall go through the statutory capital reduction procedures in time or other shareholders or a third party shall pay the corresponding capital contribution. The people's court shall support the creditors of the company who request the relevant parties to bear the corresponding responsibilities in accordance with the provisions of Article 13 or Article 14 of these Provisions before going through the statutory capital reduction procedures or other shareholders or third parties pay the corresponding capital contributions.