[Direct answer]In the Beijing area, there are two different scenarios with different responsible parties. According to Article 88 of the Company Law of the People's Republic of China (amended on December 29, 2023 and implemented on July 1, 2024), if a shareholder transfers equity that has been subscribed but not yet reached the payment deadline, the transferee shall bear the obligation to pay the capital. If the transferee fails to pay in full on time, the transferor shall bear supplementary liability for the unpaid capital; if the shareholder fails to pay the capital according to the provisions of the articles of association, or transfers the equity when the actual value of the non-monetary property contributed as capital is significantly lower than the subscribed capital, the transferor and the transferee shall bear joint and several liability for the insufficient capital. If the transferee does not know or should not know of the above circumstances, the transferor shall bear the liability. Therefore, the key to the liability of "defective equity" lies in whether the payment deadline has arrived and whether the transferee is aware of the situation.

1. Problem background and typical scenarios

Under the subscribed capital system, many shareholders transfer their equity before actually paying the capital contribution. If the company or creditors later seek to recover the capital contribution, the transferor and the transferee may shift the blame to each other. In corporate litigation in Beijing, the allocation of responsibility for defective equity transfers is a frequent issue, especially when the company is liquidated and debts cannot be repaid. The responsibility for the capital contribution will then be "unearthed". Only by clarifying the timeframe for the capital contribution and the transferee's awareness of the situation can we determine where the responsibility lies.

II. Key points of contention

First, has the investment period already expired? Second, does the transferee know about this? Third, should the transferor bear supplementary liability or joint and several liability? Fourth, how should the company and the creditor assert their rights?

III. Professional analysis by Henglue Lawyers

The first layer distinguishes the investment period: if the investment period has not yet arrived at the time of transfer, it is an "unexpired equity transfer", and the transferee shall bear the obligation to pay. If the transferee fails to pay on time, the transferor shall bear the supplementary liability. If the investment period has expired but the investment has not been made or the investment is not genuine, the responsibility will be even greater, and the transferor and the transferee shall bear joint and several liability within the scope of insufficient investment. The second layer concerns the transferee's knowledge: if the transferee does not know and should not know that there are defects in the investment, the transferor shall bear the responsibility, and the transferee may be exempted from liability. Conversely, if the transferee knows or should know, they shall bear joint and several liability, so due diligence and representation and warranty clauses are particularly important. The third layer concerns the claimants and methods: the company may request the investor to fulfill the investment obligation; the creditor may claim the shareholder's investment liability in the execution or bankruptcy proceedings; in practice, the investment situation is often verified through industrial and commercial registration, articles of association, capital verification, or bank statements. In a equity investment dispute handled by our firm's lawyers, the investor made an investment, but the new company was never established. The court ruled to dissolve the agreement and return the investment of 320,000 yuan on the grounds that the contractual purpose could not be achieved. This case highlights that whether the investment has actually been made and whether the obligation has been fulfilled are the first facts that must be verified in disputes over company investments. The fourth layer concerns risk prevention: before acquiring the equity, the transferee should verify the investment certificates, articles of association, and industrial and commercial information. The transfer agreement should stipulate the assumption of investment liability and breach of contract clauses to avoid taking over "defective" equity. Related disputes can be resolved throughBusiness and contract disputes in enterprisesOverall handling of the service.

IV. Practical suggestions and legal basis

The first step is to verify the investment period and actual payment status of the target equity, as well as the evaluation of non-monetary contributions. The second step is for the transferee to conduct due diligence to confirm whether there are any defects in the investment and to keep written records. The third step is to clarify in the agreement the assumption of investment responsibilities, price adjustments, and breach of contract compensation. The fourth step is to accurately distinguish the liability forms of the transferor and transferee when the company or creditors assert investment responsibilities. The fifth step is to pay attention to the connection between investment responsibilities and the statute of limitations and enforcement procedures, and to assert and apply for preservation in a timely manner. Main legal basis: Article 88, Article 49, and Article 54 of the Company Law of the People's Republic of China (amended on December 29, 2023 and implemented on July 1, 2024); Articles 509 and 577 of the Civil Code of the People's Republic of China; the specific application shall be subject to the currently effective provisions.

5. Henglu Law Firm's Reminder

Three key points of transferring defective equity: 1. Transferring equity before the investment term has expired—the transferee must pay the full amount, and the transferor must make up the shortfall. 2. Transferring equity when the investment term has expired or the investment is not genuine—the transferor and the transferee who knew of the situation are jointly liable. 3. The transferee must conduct due diligence and ensure that the agreement clearly stipulates the assumption of investment responsibilities and breach-of-contract provisions. For corporate commercial and contract disputes, you can seek legal assistance throughBusiness and contract disputes in enterprisesThe service obtains a comprehensive solution, and disputes over equity and investment can be resolved togetherSpecial servicesThe plates, which involve execution and creditor recovery, can be referred to for reference.Creditor's rights and debts, and enforcementFor inquiries about intellectual property and general legal services, please refer to the relevant columnIntellectual property and corporate lawTeam.

VI. Frequently Asked Questions

Q1: Who will bear the responsibility for the investment if the unpaid shares are transferred?

When the investment period has not yet arrived, the transferee shall bear the obligation to make the payment. If the transferee fails to make the payment on time, the transferor shall bear the supplementary liability.

Q2: If the investment period has arrived, but the investor hasn't paid yet, can they transfer the shares instead?

The transferor and the transferee shall bear joint and several liability within the scope of insufficient investment; if the transferee does not know and should not know about the defects, the transferor shall bear the liability.

Q3: Can the transferee be exempt from liability if they are unaware of the situation?

Under the circumstances that the investment period has arrived, the transferee is exempt from liability if he/she is unaware of it and should not be aware of it; if the transfer is not within the investment period, the transferee shall pay it, and whether he/she is aware of it or not will affect the allocation of responsibilities between him/her and the transferor.

Q4: How can the company or creditors assert their rights?

The company may request the performance of the investment, and the creditor may claim the shareholder's investment liability in the execution or bankruptcy proceedings. It is necessary to verify the articles of association, registration, and investment certificates.

Q5: How can the transferee mitigate risks?

Conduct due diligence to verify the investment period and the actual payment situation, and stipulate the transfer of investment responsibilities, price adjustments, and breach of contract compensation clauses in the transfer agreement.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the interpretation of judgments in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.