[Case Summary]This case involves a dispute over a contract for operating under a subcontracting arrangement. Yang * supplied goods to a certain construction project and, for settlement purposes, signed a "Company Subcontracting Cooperation Agreement" with the trading company. However, the trading company only partially paid the construction project funds after receiving the payment and refused to pay the remaining amount of 170,000 yuan; in 2023, the construction project paid over 330,000 yuan, but the trading company still failed to make the payment. Yang * entrusted the Beijing Henglu Law Firm to handle the case.Li YonghuiThe lawyer filed a lawsuit. The core disputes include the validity of the subcontracting agreement, whether the trading company should pay the amount after deducting the tax point, and the joint and several liability of the legal representative. The applicable laws include the Contract Chapter of the Civil Code of the People's Republic of China and the relevant provisions of the Company Law of the People's Republic of China. The first-instance judgment ruled that the trading company should pay 152,500 yuan, and the legal representative Li * (the sole shareholder and the company's assets being commingled) should bear joint and several liability.

I. Review of the Case Facts

What should you do if the subcontracting company collects payments but fails to pay them? The parties often search for terms like "Is the subcontracting agreement valid?", "Is the legal representative of the subcontracted company jointly liable for the debt?", and "How to sue in a subcontracting business dispute". From December 2018 to February 2019, Yang * supplied mountain pebble stones to a railway project of * Construction Group and rented vehicles for transportation. In February 2019, to settle the accounts, Yang * signed the "Company Subcontracting Cooperation Agreement" with the trading company on July 15, 2019. The trading company would pay Yang * after receiving the construction funds, and Yang * would pay the management fee of 84,500 yuan to the legal representative Li *. The trading company settled the accounts with the construction company for 1,689,094.68 yuan. In 2022, the construction company paid the trading company 260,000 yuan, but the trading company only paid Yang * 90,000 yuan and refused to pay the remaining 170,000 yuan. In 2023, the construction company paid another 330,000 yuan. After repeatedly demanding payment without success, Yang *委托 others to sue the trading company for breach of contract.Li YonghuiThe lawyer filed a lawsuit and applied for property preservation.

II. The focus of the case

  • Focus 1: The validity of the subcontracting agreement.Is it legal and effective for Yang * to cooperate with the trading company under the guise of a business affiliation?
  • Focus 2: The amount to be paid.After deducting the 3% tax point from the construction payment, should the trading company pay Yang * in full?
  • Focus Three: The joint and several liability of the legal representative.Is the sole shareholder's property commingled and does it entail joint and several liability?

III. The professional intervention of Hengluo Law Firm

The plaintiff claimed that:Yang * claimed that the subcontracting agreement is valid, and that the trading company should pay the tax point according to the agreement after receiving the construction workers' wages. In 2022, the construction workers paid 250,000 yuan and were deducted 3%, which should be paid 7500 yuan, but only 90,000 yuan was paid, and the remaining 152,500 yuan should be paid. And he applied for property preservation to ensure that he could get the money.

The defendant argued that:The trading company and its legal representative, Li * , were held legally responsible by the court after a review.

Hengluo Lawyer's Representation Opinion:Li YonghuiThe lawyer pointed out that the "Company Affiliation Cooperation Agreement" between Yang and the trading company was a true expression of intention and did not violate any prohibitive provisions. It was legally established and effective, and both parties should fulfill their obligations. After Jian Gong transferred the material payment to the trading company's account, the trading company should deduct the tax point and deliver it to Yang. On January 11, 2022, Jian Gong paid 250,000 yuan, and the tax deduction was 3% (7,500 yuan), so the payment should be 242,500 yuan. However, the trading company only paid 90,000 yuan, so it was legally justified to demand the payment of the remaining 152,500 yuan; at the same time, an application for property preservation was made.

IV. Outcome of the case

The court of first instance adopted some of the opinions of Hengluo Law Firm: regarding the remaining more than 330,000 yuan, since Jian Gong has not yet paid the Commercial Company, this claim is not supported; Li * of the Commercial Company is the legal representative and sole shareholder. The funds paid to Yang * were all transferred from his personal account or WeChat, and he failed to provide evidence that his personal property is independent of the company's assets. Therefore, he should bear joint and several liability for the funds involved in the case. According to the relevant provisions of the Civil Code and the Civil Procedure Law, the court ruled: First, the Commercial Company shall pay Yang * 152,500 yuan within five days; Second, Li * shall bear joint and several liability for the above-mentioned funds.

5. Hengluo Law Firm's Reminder

This case is represented by Attorney Li Yonghui of Beijing Henglu Law Firm (practice license number: 11101199611955812, subject to the certificate issued by the judicial administrative organ). In the case of operating under a subcontracting arrangement, if the subcontracting company withholds and refuses to pay after receiving the payment, the actual supplier can claim payment based on the subcontracting agreement; if the sole shareholder's property is commingled, the subcontractor can claim joint and several liability. A reminder to the actual operators: When operating under a subcontracting arrangement, it is necessary to specify the settlement and payment deadlines, retain the payment receipts from the construction company, and promptly entrust a lawyer to sue and preserve evidence in the event of withholding payments.

VI. Frequently Asked Questions (FAQ) about Corporate Commercial Cases

  1. Q: Is the subcontracting agreement valid?
    A:A cooperation agreement involving subcontracting that does not violate prohibitive provisions is generally considered valid, and the two parties should settle payments in accordance with the agreement.
  2. Q: Is the legal representative jointly liable if the company he/she is affiliated with owes money?
    A:If the legal representative is the sole shareholder and his/her personal assets are intermingled with the company's assets and he/she fails to provide evidence of independence, he/she shall bear joint and several liability for the company's debts.
  3. Q: How to sue for disputes over business operations under the guise of subcontracting?
    A:Collect the subcontracting agreements, construction settlement and payment vouchers, and transfer records. Demand the payment of the amount after the tax deduction point and apply for property preservation.
  4. Q: Can I get the money back from Shangmao if Jianghong hasn't paid it yet?
    A:Generally, this is not allowed. You must wait until the construction company actually pays the money into the commercial account before claiming the tax deduction. The court may not support the payment for the unpaid portion.
  5. Q: Can I get the management fee back?
    A:If the management fee has been paid according to the agreement and the agreement is still valid, it will generally not be refunded. The focus of the dispute is on the settlement funds withheld by the party being co-signed with.