[Case Summary]This case involves a dispute over the liability of a shareholder of a limited liability company for damaging the interests of the company's creditors. The plaintiff, Li * *, obtained a judgment that became effective due to a housing lease dispute, confirming that A Company should pay a rent of 408,333 yuan and a penalty of 150,000 yuan. However, only 7,569.63 yuan was recovered through enforcement, and the remaining claims were terminated due to A Company's lack of assets. Beijing Henglu Law FirmWang FangliThe lawyer did not stop at the conclusion of "impossible enforcement", but retrieved the business registration files to identify the timeline of the equity of the sole-member company. According to the rule of reversed burden of proof for the evidence of property commingling of the sole-member company, the lawyer successfully pursued the joint and several liability of the historical shareholders and the current shareholders. The People's Court of Changping District of Beijing Municipality ruled that Wang * and Wang *1 should bear joint and several liability for the debts that A Company cannot repay.

I. Review of the case

Creditors often search for phrases like "What should I do if the company doesn't have the money to enforce the judgment?" "Do shareholders of a sole-member company bear joint and several liability?" "Can shareholders who haven't paid their capital contributions be held accountable?" "Who is responsible for harming the interests of the company's creditors?" and "Can the court add shareholders to the enforcement of the final judgment?" Plaintiff Li * leased the house in a courtyard in Changping District, Beijing to A Company, but A Company has long been in arrears with the rent. Li * filed a lawsuit for a lease contract dispute, and the court issued Civil Judgment No. XXXX of 2021 in Beijing No. 0114 Civil Court, ordering A Company to pay the rent of 408,333 yuan and the breach of contract penalty of 150,000 yuan, and requiring the third-party Zhao * * to bear partial joint and several liability. The case acceptance fees, preservation fees, and announcement fees were also borne by A Company.

After the judgment came into effect, Company A failed to fulfill its obligations. Li * applied for forced execution, but the court only recovered 7,569.63 yuan from the debtor. Due to the lack of enforceable assets under Company A's name, the court ruled to terminate the current enforcement procedure, leaving Li *'s legitimate claims in a difficult situation of being hard to enforce.

Li * entrusted our firm to handle the case.Wang FangliThe lawyer safeguards the rights and interests of the client. Attorney Wang retrieves the industrial and commercial archives of Company A and sorts out the key timeline of equity ownership: Company A was established in 2006 with a registered capital of 500,000 yuan; in May 2018, it was increased to 10.5 million yuan; in April 2019, Wang *1 acquired all the equity and became the sole shareholder, subscribing to 10.5 million yuan with a payment period ending on December 31, 2053; on August 16, 2021, Wang *1 transferred the equity to Wang *, who became the sole shareholder; none of the shareholders have actually paid the subscribed capital. The lease debt in the case arose in 2020, during the period when Wang *1 served as the sole shareholder.

II. The focus of the case

  • Under the background of multiple changes in the equity of a one-person company, if the current shareholder, Wang * and the historical shareholder, Wang *1 cannot prove that the company's assets are independent of their personal assets, should they bear joint and several liability for the company's unpaid debts?
  • The debt in question was formed during Wang *1's period of shareholding. As the sole shareholder at that time, should Wang *1 bear joint and several liability for the debt?
  • All shareholders have not paid in their contributions in full. Can creditors simultaneously claim the accelerated maturity of the shareholders' contributions and the liability for property commingling?

III. The professional intervention of Hengluo Law Firm

Both parties' arguments and defenses: The plaintiff, Li *, claimed that A Company still could not pay off its due debts after enforcement, and Wang * and Wang * 1, as individual shareholders at different periods, could not prove the independence of the company's assets and should bear joint and several liability for the company's inability to pay off debts; the defendants, Wang * and Wang * 1, failed to appear in court after being legally summoned, which was deemed as their waiver of the rights to defend, present evidence, and cross-examine witnesses.

Wang FangliThe lawyer conducted his agency work based on the rule of "reversing the burden of proof for the shareholders' independent property of a single-person company":

First, comprehensively sort out the original case materials, retrieve the judgment documents of the lease contract disputes and the enforcement rulings of the Terminal Enforcement, and fix the key fact that "Company A still cannot pay off the due debts after the enforcement".

Secondly, we retrieved the complete business registration files, clarified the timeline of the equity changes, and confirmed that the debt in question occurred during the period when Wang *1 was a sole shareholder, as well as the fact that Wang * subsequently acquired the equity and became a sole shareholder.

Thirdly, apply to the court for property preservation and take preservation measures against the property owned by the two defendants to prevent the transfer of property and provide a guarantee for the creditor to realize his rights.

Fourth, the trial clarified the litigation path and presented the core attorney's opinions: If Company A still cannot pay off the debt after enforcement, the plaintiff has the right to require the shareholder to pay the investment in advance; Wang * as a sole shareholder cannot prove that his property is independent from the company's property and should bear joint and several liability; the debt in question arose during Wang *1's term as a sole shareholder, and Wang *1 also cannot prove that his property is independent, so he should also bear joint and several liability.

IV. Outcome of the case

The People's Court of Changping District of Beijing City rendered Civil Judgment No. XX66 of 2026 in Case No. 0114, fully adopting all the claims of the plaintiff.Wang FangliThe attorney's opinion, supporting all the plaintiff's claims in the lawsuit:

The court rules that Wang * and Wang *1 shall bear joint and several liability for the debts that A Company cannot repay as determined in the Civil Judgment No. XXX4 of 2021 in Beijing, and shall perform the obligation within seven days after the judgment takes effect; the case acceptance fee and preservation fee shall be borne by Wang * and Wang *1, and the announcement fee shall be borne by the two defendants according to the actual invoices; if they fail to perform the obligation within the time limit, they shall pay the interest on the debts during the delay in performance at a rate doubled according to law.

The court held that, since the fact that Company A was unable to repay its due debts occurred before the implementation of the new Company Law, the laws and judicial interpretations in force at that time should be applied. According to Article 63 of the Company Law of the People's Republic of China (Amendment 2018): "Where a shareholder of a one-person limited liability company cannot prove that the company's property is independent of the shareholder's own property, the shareholder shall bear joint and several liability for the company's debts." Since neither Wang * nor Wang *1 were able to fulfill their burden of proof, Li *'s claim that the two should bear joint and several liability is legally justified and should be supported.

5. Hengluo Law Firm's Advice

If a shareholder of a one-person limited liability company cannot prove that the company's assets are separate from his own, he shall bear joint and several liability for the company's debts, which is a rule of reversed burden of proof. When the company has no assets that can be executed, the creditor should not stop at "execution failure", but should investigate the shareholder's investment and asset commingling, and pursue the one-person shareholder's joint and several liability in accordance with the law.

This case is handled by Beijing Henglu Law FirmWang FangliAttorney (Practice Certificate No.: 11101201911086939, subject to the certificate issued by the judicial administrative organ) acting on behalf of the client. Reminder to creditors: If you encounter enforcement of the Terminal Litigation System, you can entrust an attorney to retrieve the industrial and commercial archives and file a lawsuit against the circumstances such as the property confusion of the shareholders of a sole proprietorship company and the non-payment of the registered capital, so as to impose the debt responsibility on the shareholders personally.

VI. Common Questions and Answers (FAQ) about Commercial Contract Disputes in Enterprises

  1. Q: What should I do if the company doesn't have the money to enforce the debt? A: Don't stop at the final enforcement stage. You can investigate the shareholders' contributions and the situation of property confusion, and file lawsuits to hold the shareholders accountable for situations such as the shareholders' property not being independent in a sole proprietorship company or the failure to pay the full registered capital.
  2. Q: Does a sole shareholder of a company have to bear joint and several liability? A: Yes. If the sole shareholder of a limited liability company cannot prove that the company's assets are separate from their personal assets, they must bear joint and several liability for the company's debts, and the burden of proof shall be reversed in such cases.
  3. Q: Can shareholders be held accountable if they have not paid their subscribed capital in full? A: Yes. If the company is unable to repay its due debts, creditors may require shareholders to bear supplementary compensation liability within the scope of their unpaid subscribed capital, or demand the accelerated maturity of the subscribed capital.
  4. Q: Can the executor add the shareholders as the persons subject to enforcement in the Terminal Enforcement Procedure? A: It's possible if the conditions are met. If the shareholders' assets are commingled, there is fraudulent liquidation, or they fail to pay the actual capital contribution, etc., the executor can initiate the additive enforcement procedure or file a separate lawsuit to require the shareholders to assume liability.
  5. Q: Who is responsible for harming the interests of the company's creditors? A: Usually, it's the company's shareholders and actual controllers, etc. If a sole shareholder cannot prove the independence of their property, or if the shareholder abuses the independent status of the legal person to evade debts and harm the interests of creditors, they should bear corresponding responsibilities according to the law.