[Direct answer]When a company goes bankrupt or has no assets under its name, the debts are not impossible to recover. According to Article 6 of the "Memorandum of the National Court's Civil and Commercial Trial Work Conference" (issued on November 14, 2019) and Article 35 of the "Enterprise Bankruptcy Law of the People's Republic of China", if a company, as the party subject to enforcement, has no assets available for enforcement after the court has exhausted all enforcement measures, and already meets the bankruptcy conditions but does not apply for bankruptcy, the shareholders who have not reached the deadline for making capital contributions shall bear supplementary compensation liabilities within the scope of the unpaid capital, that is, the "accelerated maturity of capital contributions". Beijing Henglue Law FirmAttorney Yuan HangI have handled cases like this before, and successfully ordered the shareholders to repay the company's debts within the scope of their subscribed capital. It is recommended to first apply for compulsory enforcement and investigate the shareholders' investment situation. If necessary, hire a lawyer to file a lawsuit against the shareholders for harming the company's creditors' interests. For more details, please refer to the following link:Legal services for creditor-debtor disputesAndBeijing Henglu Law Firm.

I. Legal basis and interpretation of provisions

1. Article 35 of the Enterprise Bankruptcy Law of the People's Republic of China (effective June 1, 2007)

The provision stipulates that after the people's court accepts the bankruptcy application, if the debtor's investors have not fully fulfilled their investment obligations, they shall pay the subscribed investment without being subject to the time limit for investment. This is a typical statutory situation of accelerated maturity of investment, indicating that the time limit benefit under the subscribed system is not absolute. When the company enters the bankruptcy procedure, the shareholders' investment obligations will mature immediately, providing a direct legal basis for creditors to pierce the corporate veil.

2. Article 6 of the "Memorandum on the Work of Civil and Commercial Trials in Courts Across the Country" (issued on November 14, 2019)

The Jiumin Summary clarifies that under the subscribed capital system, shareholders are entitled to time-limited benefits according to law. If a creditor requests a shareholder who has not yet reached the capital contribution deadline to bear supplementary compensation liability, the request will generally not be supported; however, in cases where the company is the defendant, and the people's court has exhausted all enforcement measures but has no property available for enforcement, or the company already meets the bankruptcy criteria but does not file for bankruptcy, the people's court shall support the request. This provision identifies "meeting the bankruptcy criteria but not filing for bankruptcy" as the key triggering point for the accelerated maturity of capital contributions.

3. The interpretation of the case by the court

In practice, the court reviews two key elements: first, the company has no assets after enforcement and meets the criteria for bankruptcy but fails to apply for bankruptcy; second, the shareholders have not paid the subscribed capital before the deadline. Creditors need to retrieve the industrial and commercial archives and the public disclosure certificate of the enterprise's credit information to verify whether the capital has been paid. If the shareholders claim that the capital has been paid, they must provide evidence themselves, otherwise they will bear adverse consequences. If the conditions are met, the court may order the shareholders to bear supplementary compensation liability for the company's inability to pay off debts within the scope of their unpaid capital, which is also related to other legal consequences.Business commercial contract disputesThe logic of accountability for this incident.

II. Real cases of Henglue Law Firm (detailed review)

Review of the case:The dispute over the intermediary contract between Ma and Company A was adjudicated by the Chaoyang District Court of Beijing, which ordered Company A to return the intermediary service fee of 423,500 yuan. After Company A appealed, the appeal was automatically withdrawn. After the judgment came into effect, Company A failed to perform its obligations, and Ma applied for compulsory execution. However, as Company A had no property available for execution, the court ruled to terminate the current enforcement. Ma then entrusted Beijing Henglu Law Firm to handle the case on his behalf.Yuan HangThe lawyer is chasing the debt.

The focus of the controversy:First, when the company has no property to be executed against, can unpaid shareholders be held accountable for additional liabilities? Second, under the subscribed capital system, can the shareholders' investment period be accelerated to maturity? Third, what is the scope of the shareholders' respective supplementary compensation liabilities?

Our position and the position of the other party are as follows:Ma * claimed that A Company had no property after the enforcement, and shareholders Liu * and Zhang * failed to pay in their capital contributions. They should bear supplementary compensation liability for the company's debts within the scope of their unpaid contributions. Shareholders are entitled to the benefit of time according to law, with a subscription period of 2039 years. They claimed that the company's debts are unrelated to the unpaid capital contributions, and they did not appear in court to defend themselves or provide evidence of the paid-in capital.

Attorney's Strategy and Legal Opinions:Attorney Yuan Hang found through retrieving the materials that A Company's shareholders, Liu * and Zhang *, each subscribed to 9 million yuan and 1 million yuan, with the subscription period ending on September 23, 2039. There were no records of actual payment in the industrial and commercial archives. In accordance with the Nine Civil Cases Notes and the Third Judicial Interpretation of the Company Law, the attorney argued that since A Company, as the party subject to enforcement, has exhausted all means of enforcement without any assets and meets the criteria for bankruptcy but fails to file for bankruptcy, the plaintiff has the right to request the shareholders whose subscription period has not yet expired to bear supplementary compensation liability within the scope of their unpaid subscriptions. Therefore, a lawsuit was initiated on the liability dispute of shareholders harming the interests of the company's creditors.

The court's reasoning and case handling results:The court adopted the lawyer's opinion and ruled that the defendant Liu * shall bear supplementary compensation liability for the debt owed by Company A to Ma * as determined by the relevant judgment of Chaoyang Court, within the scope of his unpaid investment of 9 million yuan; and the defendant Zhang * shall bear supplementary compensation liability for the debt owed by Company A to Ma *, within the scope of his unpaid investment of 1 million yuan. The court determined that Company A is unable to pay off its due debts and clearly lacks the ability to do so, and meets the criteria for bankruptcy but has not applied for bankruptcy. The shareholders no longer enjoy the benefit of time limits, and the unpaid investment shall be accelerated to maturity. Liu * and Zhang * failed to appear in court to provide evidence of full payment and shall bear the consequences of failing to provide evidence.

This case is handled by Beijing Henglu Law Firm.Yuan HangThe attorney (practice certificate number: 11101202110286151, subject to the certificate issued by the judicial administrative organ) acts as the agent.

III. Frequently Asked Questions

Q1: If the company doesn't have the money to enforce the contract, can it still recover the debt owed to it?

Yes. First, apply for enforcement and investigate the property. If the court rules to terminate the enforcement, you can investigate whether the shareholders have actually paid their contributions. When the company meets the bankruptcy criteria but does not file for bankruptcy, and there are no assets left after exhausting all enforcement measures, you can claim that the unpaid shareholders' contributions are due immediately, and they shall bear supplementary compensation liability within the scope of their subscribed capital. This case is a typical example of this situation.

Q2: Under the subscribed capital system, do shareholders have to repay the company's debts on behalf of the company?

Generally, shareholders enjoy the benefits of the statute of limitations and do not need to make advance payments. However, when the company meets the criteria for bankruptcy but fails to file for bankruptcy, and after all enforcement efforts have been exhausted and no assets are found, the payment obligation accelerates and the shareholders must bear supplementary compensation liability for the company's inability to pay off debts within the unpaid amount. In this case, Liu * and Zhang * were held liable within the range of 9 million yuan and 1 million yuan.

Q3: How to prove that the shareholders have not made actual capital contributions?

It is possible to retrieve industrial and commercial archives, the enterprise credit information disclosure system, and capital verification materials; if there are no actual payment records, the shareholders shall provide evidence of the actual payment facts, otherwise they will bear adverse consequences. Creditors may apply to the court to retrieve the key facts of the shareholders' failure to make investments in litigation, laying the foundation for additional liability.

Q4: What is a lawsuit in which shareholders harm the interests of the company's creditors?

This refers to a lawsuit in which creditors request shareholders who have not fulfilled or fully fulfilled their capital contribution obligations to bear supplementary compensation liability for the company's inability to pay off debts within the scope of unpaid capital and interest. It breaks through the limited liability of the company and is an important path for recovering arrears after the implementation of the final enforcement. It requires that all enforcement measures have been exhausted and that the prerequisites for bankruptcy exist.

Q5: Can the execution proceed again after the completion of the litigation process for debtors who are unable to repay their debts?

Yes. If new clues to the company's or shareholders' assets are found, the enforcement can be resumed; if the shareholders are added as the parties subject to enforcement, the liability can also be confirmed through separate litigation. In this case, after the shareholders were ordered to bear supplementary compensation liability, the creditor can apply for the forced execution of their personal assets based on this and recover the debt.

IV. Suggestions for Protecting Rights

  • After winning the lawsuit, apply for forced execution as soon as possible to investigate and control the company's bank accounts, real estate, vehicles, and other assets.
  • Before executing the final settlement of the case, we need to retrieve the industrial and commercial archives to verify the amount of capital subscribed by the shareholders, the time limit, and the actual payment situation.
  • When the company has no assets and meets the conditions for bankruptcy, it entrusts a lawyer to file a lawsuit against the shareholders who have damaged the interests of the company's creditors.
  • If any new clues regarding the shareholders' assets are discovered, the court shall resume enforcement promptly and, if necessary, add the shareholders who have not paid the full amount of their subscribed capital to the list of the persons subject to enforcement.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Attorney Yuan Hang·Beijing Henglu Law Firm