Shareholders shall pay their respective subscribed capital contributions in full and on time in accordance with the Articles of Association. During the subscription period, shareholders are generally not responsible for the company's debts. However, if the company enters the bankruptcy liquidation procedure, the shareholders shall bear supplementary liability for the debts that the company cannot pay off within the scope of unfulfilled principal and interest. Where shareholders make capital contributions in cash, they shall deposit their capital contributions in full into the company account; Where non-monetary property is used as capital contribution, the formalities for the transfer of property rights shall be handled. Shareholders who fail to pay their capital contributions in full and on time shall be liable for breach of contract to shareholders who have paid their capital contributions in full in addition to paying their capital contributions to the company.
Mode of contribution by shareholders:
1. Monetary contribution: shareholders pay their contributions to the company in cash;
2. Contribution in kind: Shareholders make contributions in kind, real estate and other non-monetary properties;
3. Contribution of intellectual property rights: Shareholders make contributions with intellectual property rights such as patent rights and trademark rights;
4. Creditor's Rights Contribution: Shareholders contribute to the company with their creditor's rights;
5. Labor service contribution: Shareholders contribute by providing labor services, but it should be noted that China's Company Law does not recognize labor service contribution;
6. Equity contribution: Shareholders enter the company with their equity in other companies as capital contribution.
To sum up, during the subscription period, shareholders are usually not liable for the debts of the company, but if the company goes bankrupt and liquidates, shareholders must be liable for compensation within the scope of unpaid capital contributions; When a shareholder fails to make full contribution in accordance with the Articles of Association, he shall be liable for breach of contract to other shareholders who have made full contribution in addition to repaying the company.
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) (II)
Article 22
When the company is dissolved, the unpaid capital contribution of shareholders shall be regarded as liquidation property. The unpaid capital contribution of shareholders includes the overdue capital contribution, as well as the capital contribution that is not due by stages as stipulated in Articles 26 and 81 of the Company Law.
When the company's property is insufficient to pay off the debts, if the creditors claim that the unpaid shareholders and other shareholders or promoters at the time of the establishment of the company shall bear joint and several liabilities for paying off the debts of the company within the scope of unpaid capital contribution, the people's court shall support it according to law.
Company Law of the People's Republic of China
Article 28
Shareholders shall pay their respective subscribed capital contributions in full and on time in accordance with the Articles of Association. Where the shareholders make capital contributions in cash, they shall deposit their capital contributions in full into the account opened by the limited liability company in the bank; Where non-monetary property is used as capital contribution, the formalities for the transfer of property rights shall be handled according to law. Where a shareholder fails to pay the capital contribution in accordance with the provisions of the preceding paragraph, he shall be liable for breach of contract to the shareholder who has paid the capital contribution in full and on time.
Enterprise Bankruptcy Law of the People's Republic of China
Article 35
After the people's court accepts the bankruptcy application, if the debtor's investors fail to fully fulfill their capital contribution obligations, the administrator shall require the investors to pay the subscribed capital contribution, which is not limited by the capital contribution period.