[Case Summary]This case is an enforcement case of a dispute over a sales contract. The applicant, Xu *, and a one-person limited liability company, Company A, had a dispute over a sales contract. After two trials, the court ruled that Company A should pay Xu * 300,000 yuan and the litigation fees, but Company A had no enforceable assets. The court ordered the termination of the enforcement procedure this time. Xu * entrusted Beijing Henglu Law Firm to handle the case.Yuan HangThe lawyer, relying on Article 20 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement" regarding the "liability transparency of single-person companies", applied to add Liu * as the sole shareholder of A Company as an additional party subject to enforcement. The court ruled to add Liu * as an additional party subject to enforcement and ordered him to bear joint and several liability for A Company's debts of 300,000 yuan. The core dispute is: when the property of a single-person limited liability company is insufficient to repay debts, how to hold the sole shareholder accountable for joint and several liability. Applicable legal provisions: Articles 20, 28, and 32 of the "Interpretation of the Enforcement Change and Addition Regulations".

I. Review of the case facts

"Winning a judgment but being unable to collect the money" is a pain point for many creditors. Commonly searched terms include "Can I still enforce the judgment after the final settlement?", "Can I enforce the shareholders of a sole-person company for unpaid debts?", and "Conditions for adding shareholders as debtors". Applicant Xu * sued Beijing A Cultural Development Co., Ltd. (hereinafter referred to as A Company) for a sales contract dispute at the Chaoyang District People's Court of Beijing. On September 29, 2021, the court issued a civil judgment ordering A Company to pay Xu * 300,000 yuan and the litigation fees; on May 16, 2022, the Beijing Third Intermediate People's Court dismissed the appeal and upheld the original judgment in the final appeal. After the judgment took effect, A Company failed to perform its obligations. Xu * applied for enforcement, but the court found that A Company had no enforceable assets and ruled to terminate the enforcement proceedings. More than two years after winning the lawsuit, Xu * still cannot collect the money. Upon recommendation, he contacted Beijing Henglu Law Firm for help.Yuan HangConsult a lawyer and entrust them with the case.

II. The focus of the case

  • Focus 1: How to break through the impasse of "inability to execute".The effective judgment confirms the creditor's claim, but the debtor has no assets. The regular enforcement has ended this execution, and it is necessary to find another way to realize the creditor's claim.
  • Focus II: Can the sole shareholder of a one-person company be added as a person subject to enforcement?Company A is a one-person limited liability company. Whether shareholder Liu * can be added as a defendant and bear joint and several liability because he cannot prove that the company's assets are separate from his personal assets is the key issue in this case.
  • Focus 3: How to determine the shareholders' liability based on the evidence.It is necessary to retrieve the industrial and commercial archives to prove that Liu * is a 100% shareholder. Then, combined with the judgment of the Terminal Judgment, we can demonstrate the responsibility penetration.

III. The professional intervention of Hengluo Law Firm

The applicant (Xu*) claimed that:Xu * has already held a valid judgment of winning the lawsuit and completed the execution of the judgment. Company A is insolvent, so we request to add its sole shareholder Liu * as the person subject to enforcement and make him bear joint and several liability for the debt of 300,000 yuan.

The person who is being requested to be added as a defendant (Liu *) argued that:Liu * claimed that he became a shareholder after the debt was formed and had no repayment ability, but he failed to submit any evidence to prove that the company's assets were separate from his personal assets.

Hengluo Lawyer's Agency Opinion:Yuan HangAfter accepting the entrustment, the lawyer immediately initiated an investigation and submitted the "Application for Investigation and Evidence Collection" in accordance with Article 64 of the Civil Procedure Law to retrieve the industrial and commercial archives of Company A, and found that Company A was a one-person limited liability company, with Liu * as the sole shareholder and legal representative, and a registered capital of 500,000 yuan. Based on Article 20 of the "Regulations on Enforcement Changes and Additions", the lawyer submitted the "Application for Enforcement" to the court to apply for adding Liu * as the debtor, and submitted evidence such as the final enforcement ruling and industrial and commercial information.

  • The investigation identified that Company A is a one-person limited liability company, and Liu * is the 100% shareholder, which directly points to his legal responsibility
  • Legal basis: If the property of a one-person company is insufficient to pay off debts and the shareholder cannot prove that the company's property is independent of his or her own property, the applicant for enforcement may apply to add the shareholder as the person to be enforced against to bear joint and several liability for the company's debts
  • After the court accepted the case, it formed a collegial panel to review it. Liu * failed to submit evidence independently regarding the property, and thus had to bear the adverse consequences

IV. Outcome of the case

After review, the Chaoyang District Court held that the respondent, a one-person limited liability company, failed to perform the effective judgment within the time limit and had no sufficient enforceable assets in its name; the appellant, as the sole shareholder, failed to submit evidence to prove that the company's assets were separate from its own, and should bear adverse legal consequences. In accordance with Article 20, paragraph 2 of Article 28, and Article 32 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement", the court ruled to add Liu * as the respondent and make him bear joint and several liability for A Company's debts. This effectively helped the client overcome the final hurdle in realizing their creditor's rights. 朝阳区法院经审查认为，被执行人为一人有限责任公司，逾期未履行生效判决且名下无足额可供执行财产；被申请追加人作为唯一股东，未就公司财产独立于自己财产提交证据证明，应承担不利法律后果。依照《最高人民法院关于民事执行中变更、追加当事人若干问题的规定》第二十条、第二十八条第二款、第三十二条之规定，裁定追加刘某为被执行人，对A公司债务承担连带责任。为委托人打通了债权实现的“最后一公里”。

5. Henglu Law Firm's Reminder

When the execution of the case is terminated due to the lack of enforceable property, the creditor is not without remedies. If the debtor is a one-person limited liability company, the creditor may apply to add the sole shareholder as the person subject to enforcement in accordance with the law. This case is handled by Beijing Henglu Law Firm [Yuan HangThe lawyer (practice certificate number: 11101202110286151, subject to the certificate issued by the judicial administrative organ) acts on behalf of the client, relying on Article 20 of the "Regulations on the Modification and Addition of Enforcement Measures", to provide a professional path for the client to realize his creditor's rights.

VI. Common Questions and Answers for Enforcement-Related Cases

  1. Q: Can the enforcement continue after the conclusion of the litigation financing program?
    A: Yes. If it is found that the debtor has property or that the debtor can be added to the enforcement list, the enforcement can be resumed or an application for adding the debtor can be made. The termination of the enforcement by the court does not mean that the creditor's rights have been extinguished.
  2. Q: Can a sole proprietorship company directly enforce the repayment of debts against its shareholders?
    A: If the property of a one-person limited liability company is insufficient to settle debts and the shareholder cannot prove that the company's property is separate from his/her personal property, the shareholder may apply to add the shareholder as the person to be executed against to bear joint and several liability for the company's debts.
  3. Q: What evidence is needed to add a shareholder as a party subject to enforcement?
    A: It is necessary to provide business registration documents to prove the shareholders' identities and shareholding ratios, the final decision on the bankruptcy of the company, and the fact that the company has no clues to its assets, etc., to demonstrate that the shareholders are unable to prove the independence of their assets.
  4. Q: To which court should I apply to add a person to the list of defendants in an enforcement case?
    A: Generally, an additional application is submitted to the original enforcement court. The court will form a collegial panel to review and make a ruling on the application. If the applicant is not satisfied with the ruling, he/she may file for a reconsideration or initiate legal proceedings in accordance with the law.
  5. Q: How can enforcement lawyers in Beijing break through the "enforcement deadlock"?
    A: By investigating business and industrial archives, adding shareholders, and investigating the responsibility of refusing to execute judgments through a combination of multiple approaches, we turn successful judgments into real cash.