[Case Summary]This case involvesPromoter's liability disputesOn October 28, 2020, the plaintiff, Pan * and the defendant, Dai * signed an "Agreement", stipulating that Pan * would subscribe for 100,000 yuan and Dai * would subscribe for 1.9 million yuan to jointly establish the XX branch of Beijing XX Technology Co., Ltd., and Dai * would handle the registration of the establishment. After Pan * paid 100,000 yuan, the company was never established. Pan * entrusted Beijing Henglu Law Firm to handle the case.Su BenkaiThe attorney, on behalf of the plaintiff, argued that the subject established in the contract did not correspond to the actual situation, and the plaintiff was not at fault. The plaintiff requested to rescind the agreement, return 100,000 yuan and interest, pay 30,000 yuan as a breach of contract penalty, and pay 8,000 yuan in attorney's fees. The court determined that the agreement was valid and the plaintiff was not at fault, and ruled to rescind the agreement, require Dai * to return 100,000 yuan and the interest on the funds used, and pay 8,000 yuan in attorney's fees. The core disputes include whether the investment funds should be returned when the company was not established, and the breach of contract and the burden of fees. The applicable legal provisions are Article 29 of the Company Law and Article 67 of the Civil Procedure Law.

I. Review of the Case Facts

"Does the company not refund the investment funds?" and "How to handle disputes over the promoter's liability?" are common questions in equity investment. On October 28, 2020, the plaintiff, Pan * and the defendant, Dai * signed an agreement, which stipulated that the plaintiff would subscribe to a capital contribution of 100,000 yuan, and the defendant would subscribe to a capital contribution of 1,900,000 yuan to jointly establish the XX Branch of Beijing XX Technology Co., Ltd. The defendant, as the agent, would apply to the company registration authority for pre-approval of the company name and registration of the establishment. After the plaintiff paid the investment funds of 100,000 yuan to the defendant, the defendant has failed to establish the branch so far, and the plaintiff has repeatedly demanded the return of the investment funds without success. According to Article 62 of the agreement, the defendant has failed to establish the new company so far. Therefore, the plaintiff sued the court and entrusted Beijing Henglu Law Firm to handle the case.Su BenkaiThe lawyer is representing this case.

The defendant, Dai *, disagrees with the plaintiff's claims, stating that he established Beijing Mei XX Yan Company on January 8, 2021, as agreed. Although the plaintiff was not a registered shareholder, she gave her informed consent, appeared in the store and was known to many people, and the contract stipulated that she would not participate in the management. Therefore, she can be regarded as not participating in the company as a shareholder. Later, the company was dissolved, and both the plaintiff and the defendant, as investors, should bear the risks, rather than letting the defendant bear them alone.

II. The focus of the case

  • Focus 1: Can the other companies established by the defendant be regarded as the corresponding companies in the agreement?The registered capital, shareholders, and nature of the actual company established are inconsistent with the agreement. Whether the plaintiff agrees to hold shares on behalf of others or to amend the agreement will determine the allocation of responsibilities.
  • Focus 2: Should the investment funds be fully refunded if the company is not established?The plaintiff is not at fault for the company's failure to set up the company. Should the 100,000 yuan be fully refunded after the contract is terminated?
  • Focus 3: Should the breach of contract penalty and attorney's fees be supported?According to the agreement, the question is whether the claims for losses such as interest on the occupied funds, a 30% penalty for breach of contract, and attorney's fees for enforcing the creditor's rights can be supported.

III. The professional intervention of Hengluo Law Firm

The plaintiff (Pan *) alleges that:The plaintiff alleges that the defendant failed to establish a branch company in accordance with the agreement, and the conditions for terminating the agreement have been met. The plaintiff requests to terminate the agreement, return the investment of 100,000 yuan and the interest thereon, compensate for the breach of contract penalty of 30,000 yuan, and pay the attorney's fees of 8,000 yuan, with the defendant bearing the litigation costs.

The defendant (Dai * ) argued that:The defendant claimed that he had established Meixiyan Company, which is the corresponding company, and that the plaintiff had given his informed consent and would not participate in the management. After the company was deregistered, the risks should be shared by all investors.

Hengluo Lawyer's Agency Opinion:Su BenkaiAfter receiving the client's authorization, the lawyer immediately began to handle the case. Through multiple communications, sorting and analysis, and collection of key evidence, the lawyer quickly formed his legal opinion: The contract signed by the plaintiff and the defendant stipulating to jointly invest in establishing a company constitutes a true expression of intent and does not violate laws and regulations, thus it is valid. The parties agreed that the defendant would handle matters such as pre-approval of the company name and registration of the company. The defendant argued that Mei XX Yan Company corresponded to the established company, but the registered capital, shareholders, and nature of the company all differed from the contractual provisions, and the plaintiff did not agree to have others hold the equity on their behalf or amend the contract content. Since the plaintiff was not at fault for the failure to establish the company, the defendant should return the full amount of 100,000 yuan received after the contract was terminated. Additionally, the agreement stipulated that the party in breach of the contract should pay 30% of the subscribed capital as a penalty and all losses (including attorney's fees, litigation fees, etc.). The plaintiff claimed that the interest on the funds occupied, the penalty, and attorney's fees all fall within the scope of losses and should be supported.

IV. Outcome of the case

In accordance with Article 29 of the Company Law and Article 67 of the Civil Procedure Law, the court rules as follows: 1. Confirm that the "Agreement" signed by the plaintiff and the defendant on October 28, 2020 was terminated on July 4, 2022; 2. The defendant shall, within ten days after the effective date of this judgment, return to the plaintiff 100,000 yuan and pay interest on the funds during the period of occupation (based on 70,000 yuan from October 31, 2020, and 30,000 yuan from November 1, 2020, all calculated at the LPR rate until the actual payment date); 3. The defendant shall, within ten days after the effective date of this judgment, pay the plaintiff 8,000 yuan in attorney's fees for realizing the creditor's rights; 4. The defendant's other claims are dismissed.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Su BenkaiThe attorney (practice license number: 11101202110375397, subject to the document issued by the judicial administrative organ) acts as the agent. Attorney's reminder: When establishing a company, the founders and the obligations of establishing the company should be clearly defined. If the company fails to establish in accordance with the agreement and the investors are not at fault, the paid investment funds should be refunded; the agreement may stipulate the breach of contract penalty and the responsibility for realizing the creditor's rights. In the event of "founders' liability disputes" and "investment funds refunds", it is recommended to entrust professional lawyers to fix the establishment agreements and payment evidence.

VI. Common Questions and Answers about Corporate Commercial Investment Cases

  1. Q: If the company established according to the agreement has not been set up, can the investment funds be refunded?
    A:Yes, if the company fails to establish as agreed and the investor is not at fault, the paid investment funds shall be returned, and the investor may claim interest on the funds occupied.
  2. Q: If the other party says they've established another company, does that count as fulfilling the obligation? Is it considered established?
    A:If the actual registered capital, shareholders, and nature of the company established do not conform to the agreement, and the investors do not agree to the changes, it cannot be considered as fulfilling the obligation to establish the company.
  3. Q: Can the investment agreement stipulate a breach of contract penalty and attorney's fees?
    A:Yes, the party in compliance with the contract may, in accordance with the contract, claim the breach of contract penalty and the reasonable expenses for realizing the creditor's rights (including attorney's fees and litigation fees), but the actual losses shall be subject to the provisions of the contract.
  4. Q: What is the promoter's responsibility?
    A:The promoter signs the articles of association, subscribes to the investment, and performs the duties of establishing the company. If the company is not established, the relevant responsibilities and expenses shall be handled in accordance with the agreement or the provisions of the law.
  5. Q: What evidence should be prepared for an investment dispute?
    A:The investment agreement, payment receipts, establishment communication records, and company registration inquiries should be preserved, and professional lawyers should be consulted as soon as possible.