[Case Summary]This case is a dispute over liquidation liability arising from the simple cancellation of a company. The plaintiff, Li **, signed a contract for studying abroad services with Beijing A Business Information Consulting Co., Ltd. and paid a service fee of 52,800 yuan. Later, due to not receiving the admission notice from the target university, he claimed a full refund in accordance with the contract. However, before the debt was settled, the shareholders of A Company, Liu **1 and Liu **2, falsely promised that there were "no creditor's rights and debts" and proceeded with the simple cancellation of the company. Beijing Henglu Law FirmXiong BinrongAfter the lawyer took over the case, he used the contract terms as the anchor and the cancellation of the archives as the breakthrough point to successfully hold the two shareholders liable for liquidation compensation. The Haidian District People's Court of Beijing ruled that the two shareholders should refund the service fee of 52,800 yuan, pay the attorney's fee of 15,000 yuan and the breach of contract penalty, and the case acceptance fee of 1,495 yuan should be borne by the two shareholders.

I. Review of the case

Many consumers search for questions such as "Can I still get my money back if a company is liquidated?", "What should I do if a study abroad agency refuses to refund and disappears?", "Do shareholders bear legal responsibility for simple liquidation?", and "How to litigate disputes over liquidation responsibilities?". On November 21, 2022, the plaintiff, Li **, signed a "Consulting Service Contract for Study Abroad Application" with Beijing A Business Information Consulting Co., Ltd., which stipulated that A Company would provide consulting services for applying for graduate studies in the UK, with a service fee of 52,800 yuan and a service period ending on July 15, 2023. The contract also explicitly stated that if the plaintiff failed to receive an admission notice from the target program and did not breach the contract, A Company should refund all service fees. If the refund was not made within the time limit, A Company should pay a breach of contract penalty, and the litigation attorney's fees would be borne by the breaching party.

After the contract was signed, Li * * * paid 52,800 yuan as agreed and submitted the application materials. Company A provided him with document preparation, online application, and interview communication services for multiple programs at institutions such as the London School of Economics, University College London, Imperial College London, and the University of Cambridge. However, Li * * * ultimately failed to receive an admission notice from any of the target programs. On March 17, 2023, Li * * * requested a refund, but Company A stated that it was preparing a refund agreement but had not actually refunded the money.

More importantly, Company A applied for a simple deregistration on March 23, 2023, citing "unauthorized debts", and the deregistration was approved on March 28, 2023. Shareholders Liu *1 and Liu *2 pledged in the simple deregistration commitment letter that all creditor's rights and debts had been settled. Li * *, unable to recover the creditor's rights, entrusted someone to handle the matter on his behalf.Xiong BinrongThe lawyer filed a lawsuit, demanding that the two shareholders refund the service fee of 52,800 yuan, pay the breach of contract penalty, pay the attorney's fee of 15,000 yuan, and bear the litigation costs.

The defendants, Liu *1 and Liu *2, argued that they did not recognize the responsibility for refunds, and claimed that Li * did not recognize the quality of the documents and terminated the contract without refunding the fees; that Li * falsified the grades and violated the contract; that B Company could continue to perform the contract; that the failure was due to Li *'s voluntary abandonment of subsequent services; and that the attorney's fees were higher than the market price. On this basis, they claimed that they did not need to refund the fees or bear the liability for breach of contract.

II. The focus of the case

  • The question is whether the refund conditions of the study abroad service contract in this case have been met, whether Li ** has breached the contract, and whether Company A is obligated to provide a full refund.
  • Company A was simplifiedly liquidated by its shareholders while its debts were still outstanding. Should Liu *1 and Liu *2 bear the direct responsibility for repaying the company's debts?
  • How should the penalty be calculated, and should the attorneys' fees stipulated in the contract be borne by the two defendants?

III. The professional intervention of Hengluo Law Firm

Both parties presented their arguments: The plaintiff, Li **, claimed that the contract had triggered the full refund condition and that she had not breached the contract. A Company's unilateral cancellation of the contract could not exempt it from its debt obligations, and the two shareholders should refund the service fees, pay the breach of contract penalties, and the attorney's fees; the defendants, Liu **1 and Liu **2, denied the responsibility for the refund, claiming that the plaintiff's own reasons led to the failure of the application, and that B Company could take over the performance of the contract, and that the attorney's fees were too high.

Xiong BinrongThe lawyer comprehensively reviewed all the evidence related to the case, including WeChat chat records, contract texts, payment receipts, industrial and commercial archives, and rejection letters, and then put forward the following legal opinions:

Firstly, the contract in question is legal and valid, and the full refund condition has been triggered, so the plaintiff did not breach the contract. The contract stipulates a result-oriented clause that "if the applicant fails to obtain admission to the target university, the defendant will refund the full amount if the applicant does not breach the contract". The chat records and the rejection letters from the universities confirm that the plaintiff did not obtain any admission to the target university. The defendant claimed that the plaintiff falsified his academic qualifications, but there is no objective evidence to support this claim. Moreover, Company A agreed to refund the full amount multiple times during the communication, which sufficiently demonstrates that the defendant acknowledges its obligation to refund the money.

Secondly, Company A's unauthorized simple liquidation during the contract performance period does not exempt it from its debts, and the shareholders should bear the liability for liquidation compensation. The two shareholders promised "no creditor's rights and debts" in the liquidation application, but Li's creditor's rights were not satisfied, so Liu 1 and Liu 2 should bear civil liability for Company A's debts.

Thirdly, the penalty for breach of contract and the attorney's fees should be supported. The contract clearly stipulates the standard of penalty for late refund, and A Company's refusal to refund constitutes a breach of contract; the contract clearly stipulates that the party in breach shall bear the attorney's fees, and the plaintiff has actually incurred expenses with complete receipts, which are reasonable losses for safeguarding rights and interests and should be borne by the two defendants jointly.

IV. Outcome of the case

After trial, the People's Court of Haidian District, Beijing City ruled that:

First, Liu *1 and Liu *2 shall, within ten days from the date on which the judgment becomes effective, refund the service fee of 52,800 yuan to Li * and pay the breach of contract damages (based on the amount of 52,800 yuan, calculated at the one-year LPR interest rate from March 17, 2023 to the date of actual repayment);

II. Liu *1 and Liu *2 shall pay Li * the attorney's fee loss of 15,000 yuan within ten days from the date the judgment becomes effective;

III. Dismiss the other claims of Li **; the case acceptance fee of 1,495 yuan shall be borne by Liu **1 and Liu **2.

After trial, the court held that the service contract in the case is legal and valid; Li * * * did not obtain admission to any target project and did not breach the contract. A Company should refund all service fees in accordance with the contract; A Company agreed to refund the money after Li * * * requested a refund, but later cancelled it, which resulted in the contract being unable to be performed and constituted a breach of contract; Liu * * * and Liu * * *, as shareholders and liquidation obligors, promised in the simplified liquidation that there were "no creditor's rights and debts", but the creditor's rights were not satisfied. They should bear civil liability for A Company's debts; the standard of the breach of contract penalty was reduced to be calculated according to the one-year LPR; and the attorney's fees were supported based on the contract. This case applies the provisions of the Company Law of the People's Republic of China on the liability for liquidation compensation of shareholders and the provisions of the Contract Chapter of the Civil Code of the People's Republic of China.

5. Hengluo Law Firm's Reminder

The company's deregistration only means that the legal person's subject qualification is terminated, which is not equivalent to the extinction of debts. Company deregistration is not a protective shield for evading debts. For those who use equity transfer and false simplified deregistration to set up a chain of evading debts, the shareholders cannot evade their debt responsibilities at all. After the counterparty in the transaction is deregistered, the creditors can still hold the shareholders who made untrue liquidation commitments liable for liquidation compensation.

This case is handled by Beijing Henglu Law Firm.Xiong BinrongAttorney (Practice Certificate No.: 11101202211410897, subject to the certificate issued by the judicial administrative organ) acting on behalf of the client. Reminder to consumers: When signing a service contract, the refund conditions and breach of contract liability should be clearly specified. After the other party is deregistered, timely retrieve the industrial and commercial files and claim rights against the shareholders who make untrue promises in accordance with the law.

VI. Common Questions and Answers about Enterprise Commercial Contract Disputes

  1. Q: If the company is deregistered, can the money still be recovered? A: Yes. If the shareholders make a false commitment of "no creditor's rights and debts" during the simplified deregistration process, the creditors may hold them liable for liquidation compensation according to the Company Law and require the shareholders to assume responsibility for repaying the company's debts.
  2. Q: What should I do if a study abroad agency refuses to refund fees and the company disappears? A: First, collect evidence such as contracts, payment receipts, communication records, and rejection letters. If the company has been deregistered, you can sue the shareholders who made false liquidation commitments, demanding that they refund the service fees and bear the liability for breach of contract.
  3. Q: Are shareholders liable for simple liquidation of a company? A: Yes, they are. If a shareholder promises that all creditor's rights and debts have been settled during the liquidation process but fails to actually fulfill this obligation, they will be held civilly liable for the company's debts and cannot evade their responsibilities by simply liquidating the company.
  4. Q: Can I get a full refund if I don't achieve the contracted results? A: It depends on the contract terms. If the contract includes a result-oriented clause stating "a full refund will be provided if the agreed results are not achieved," and you haven't breached the contract, you can claim a full refund. The other party cannot unilaterally waive the obligation to refund just because some work has been completed.
  5. Q: Can the attorney's fees be borne by the other party? A: This can be agreed upon. If the contract clearly stipulates that the breaching party shall bear the attorney's fees incurred in litigation, and the plaintiff has actually paid these fees and provided supporting documents, the court will generally support the breaching party's obligation to bear these costs.