Original title: The registered capital of ten million yuan was changed to twenty thousand yuan without notifying creditors (subject)

A shareholder of a Chongqing company was sentenced to assume supplementary compensation liability for the part of the company's debts that could not be repaid (subtitle)

People's Court News (reporter: Liu Yang, correspondent: Zheng Xinglong, Yang Wenjing) When the company reduced its capital, it only announced the decision to reduce its capital, but did not directly notify the company's creditors. As a result, the creditor's rights could not be realized, should the company's shareholders be liable for compensation? Recently, the People's Court of Jiulongpo District, Chongqing, concluded a dispute over capital reduction of a company that illegally reduced its capital to avoid debts, and decided that shareholders should be responsible for supplementary compensation for the part of the company that cannot be repaid within the scope of capital reduction.

In December 2018, the plaintiff Wang Mou'an signed the Construction Labor Cooperation Agreement with a construction labor company. In December 2019, both parties signed a settlement sheet on the performance of the agreement. On January 2, 2020, the company formed a resolution of the shareholders' meeting, agreeing to change the registered capital of the company from the original 10 million yuan to 20000 yuan. The defendants, Li and Wang, as shareholders of the company, reduced their subscribed capital contributions from the original 5 million yuan to 10000 yuan, and the time of contribution remained unchanged. Subsequently, the market supervision and administration department handled the change registration according to the company's application. The company published a notice of capital reduction in a newspaper, but did not notify creditors.

On January 15, 2020, Wang Mou'an and the company had a dispute over the aforementioned agreement. Wang Mou'an sued the company to the court, which ruled that the company should pay Wang Mou'an more than 800000 yuan in project funds and other expenses. When the company failed to perform its payment obligation, Wang Mou'an applied for compulsory execution. Later, because the company had no property available for execution, the case was closed in the final form. In April 2023, Wang Mou'an filed a lawsuit to the court, requiring the defendants Li Mou and Wang Moubing to assume supplementary compensation liability for the part of the company's outstanding debt that cannot be repaid within the scope of capital reduction.

The plaintiff Wang Mou'an believed that the company's capital reduction without notifying the known creditors resulted in the fact that the company's creditor's rights formed before the capital reduction could not be paid off, which seriously damaged the plaintiff's interests, and the company's shareholders should bear the supplementary liability for compensation.

The defendant Wang Moubing argued that when the company completed the capital reduction procedure, the plaintiff's creditor's rights against the company had not entered the judicial process, and he was not a known creditor, so no notice was required. At the same time, the company's reduction of registered capital is a form of capital reduction, which does not lead to the inevitable reduction of the company's property, and there is no causal relationship between the fact that the plaintiff's creditor's rights cannot be repaid, so it should not be liable for compensation.

After hearing the case, the court held that the company's reduction of registered capital must be accompanied by two procedures: notification of creditors and announcement of capital reduction decisions. In this case, when the company reduced its capital, the contract arising from the creditor's rights involved in the case had been established, came into force and actually performed, but the company did not notify the plaintiff, so the capital reduction procedure was obviously illegal. The capital reduction behavior of the company objectively reduces the company's debt paying ability, and in fact causes the interests of the company's creditors to be damaged. The court decided to support the plaintiff's claim.

After the judgment of the first instance, the defendant Wang Moubing lodged an appeal. After hearing the case, the court of second instance rejected the appeal and upheld the original judgment. At present, the judgment has come into force.

The judge said

According to the Company Law of the People's Republic of China, when the company reduces its registered capital, it needs to notify the known creditors and announce the capital reduction resolution at the same time. The so-called known creditor is not a creditor that needs to be confirmed by an effective judgment in a narrow sense. As long as the basis of the creditor's rights and debt relationship between the company and the creditor already exists before the capital reduction, and the creditor's probable creditor's rights are likely to be converted into real creditor's rights, the company should notify the creditor of the capital reduction.

In this case, when the company held a shareholders' meeting to decide to reduce the registered capital, it had confirmed the performance of the agreement with Wang Mou'an. Wang Mou'an should be a known creditor, but the company did not notify Wang Mou'an. The capital reduction procedure was obviously wrong.

The legal person of the company bears the responsibility independently with the company's assets. The registered capital contributed by shareholders is the most basic asset of the company, which reflects the company's solvency to a certain extent, and is also the trust basis for transactions with the company as a specific creditor. The reduction of registered capital actually relieves the shareholders of capital reduction from some of their investment obligations, which will objectively reduce the company's solvency. Therefore, if the Company fails to reduce its capital in accordance with legal procedures, which damages the interests of creditors, creditors can require the shareholders of illegal capital reduction to assume the responsibility of supplementary compensation for the part of the Company's debts that cannot be repaid.