[Direct answer]In the Beijing area, if a company (enterprise) fails to repay a loan to a natural person when it is due, the lender may sue the company at the court located at the company's registered address or the place of contract performance, based on the loan contract and transfer receipts, and demand the repayment of the principal and interest of the loan. According to Article 667 of the Civil Code of the People's Republic of China (effective January 1, 2021) and Articles 9 and 10 of the "Provisions of the Supreme People's Court on the Application of Law in the Trials of Civil Loan Cases" (amended on December 23, 2020), loans between legal persons and between legal persons and natural persons are generally valid, but loans obtained by misappropriating credit funds for re-lending or illegal fund-raising are invalid. When suing, the lender should prepare loan notes, transfer records, and the company's business registration information, etc. If necessary, the shareholders should be listed as jointly and severally liable. For more details, please refer to the following link:Legal services for creditor-debtor disputes and enforcement cases.

I. Problem Background and Typical Scenarios

Loans between enterprises and individuals are very common in business operations, but disputes also occur frequently. Typical scenarios include: the legal representative of the company borrowing money in the name of the company and stamping the company's official seal, and then the company defending itself with the argument of "personal behavior" after the loan maturity; the loan being deposited into the legal representative's personal account rather than the company's account; the company being insolvent, and the lender worried about not getting the money back; and disputes over the nature of the loan, which is actually an investment or a withdrawal of investment. Such cases not only require proof of the loan agreement and the delivery of the funds, but also need to clarify whether the debt is a company debt or a personal debt. They even involve the transparency of shareholders' responsibilities, making the handling more difficult than ordinary private loans. For reference, please refer to the following cases:Legal services for corporate commercial and contract disputesClarify the main subject.

II. Key points of contention

The core disputes in corporate lending litigation include: First, the validity of the lending relationship. Generally, loans from enterprises to natural persons are valid, but there are invalid circumstances listed in Article 13 of the "Regulations on Private Lending" (such as obtaining loans from financial institutions for on-lending, illegally raising funds from unspecified individuals, lending knowing that the funds will be used for illegal activities, etc.); Second, the delivery and use of funds. Whether the funds are truly transferred and whether they enter the company's account determine the debtor; Third, corporate disregard of personality. If shareholders abuse the independent status of the legal person to evade debts, they can claim the shareholders' joint and several liability according to the relevant provisions of the "Company Law"; Fourth, the statute of limitations. Three years from the expiration of the agreed repayment period, it is necessary to timely claim the interruption of the statute of limitations. If there is insufficient evidence in any of these stages, there is a risk of losing the case or having no way to enforce the judgment.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers observed in handling corporate loan and enforcement cases that the most common pitfall for individuals lending to companies is "emphasizing trust and neglecting formalities". In practice, a written loan agreement should be signed before the loan, which should clearly specify the borrower (with the company's stamp and the legal representative's signature), the amount, interest rate, term, and repayment method. The interest rate shall not exceed four times the one-year loan market reference rate at the time of the contract's conclusion. For the payment, the funds must be transferred to the company's account and marked as "loan" to avoid entering private accounts and causing disputes over the subject of the loan. For preservation, apply for property preservation simultaneously with the lawsuit, seize the company's account, accounts receivable, and the shareholders' unpaid registered capital. For enforcement, if the company has no assets, promptly add the unpaid or withdrawn shareholders as the executed parties. For cases involving complex equity structures, reference can be made to the relevant provisions.Legal services for corporate commercial and contract disputes.

IV. Practical suggestions and legal basis

At the legal basis level: Article 667 of the Civil Code (implemented on January 1, 2021) defines loan contracts, and Article 679 stipulates that loan contracts between natural persons are concluded upon the provision of the loan. Enterprises acting as borrowers may refer to and apply the provisions accordingly. Article 9 and Article 10 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Private Lending Cases" (amended on December 23, 2020) clarify the effectiveness and validity of private lending contracts between legal persons and natural persons. Article 13 lists the circumstances under which loan contracts are invalid, and Article 25 sets the upper limit for interest rates. Article 28 stipulates the handling of cases where interest rates are not agreed upon or are unclear. Practical suggestions: Sign a written agreement and have the company stamp it; transfer the funds to the company's account and keep the receipts; verify the other party's business operations and creditworthiness; promptly collect debts to interrupt the statute of limitations; list the company and the responsible person when suing and apply for preservation measures. Creditor confirmation and enforcement can be combined together.Special services and legal services for other cases.

5. Henglu Law Firm's Reminder

Corporate and personal lending may seem simple, but in reality, it conceals multiple risks such as entity confusion, shareholders evading or defaulting on debts, and interest rate caps. Henglu Law Firm advises: It's better to "go through cumbersome procedures" before lending than to "lend based on personal connections". Written agreements, company stamps, and official transfers are all indispensable. After lending, monitor the company's operating conditions, promptly collect debts if any abnormalities are found, and preserve evidence. When entering litigation, make full use of preservation measures and shareholder liability investigations to avoid "winning the judgment but ending up with empty pockets". For borrowers, using a company's name to conduct personal transactions may trigger personality denial, which is not worth the effort. Whether lending or defending against lawsuits, it's crucial to involve professional lawyers as early as possible to identify the responsible parties and recovery paths in complex corporate debt structures.

VI. Frequently Asked Questions

Q1: If the company borrows money without stamping the official seal and only with the boss's signature, can we sue the company?

The key point is whether the signatory has the authority to represent the company and whether the funds have entered the company's account. If the boss is the legal representative, his signature is usually regarded as an official act. Even if the company's official seal is not affixed, the company may still bear the responsibility for repayment. If the funds are deposited into the company's account or used for the company's operations, it can further confirm the company's debt. Conversely, if the signature is only personal, the funds enter the boss's personal account and are not used for operations, it may be regarded as a personal loan to the boss. According to Article 61 of the Civil Code, the legal representative shall bear the legal consequences of the civil activities conducted in the name of the legal person. It is recommended that when suing, the company and the signatory be listed as defendants together. The court shall determine the responsible subject according to the contract, the transaction records and the use of the funds, and apply for the retrieval of the company's accounts to prove the flow of funds. For the compilation of relevant materials, please refer to the following link:Legal services for corporate commercial and contract disputes.

Q2: If the company doesn't have the money to repay the debt, can I directly ask the shareholders to repay it for me?

Generally, it cannot be directly demanded, but there are statutory breakthrough paths. As an independent legal person, the company shall bear liability for debts with all its property, and shareholders shall, in principle, bear liability only within the scope of their subscribed capital. If the following circumstances occur, the shareholders may be held jointly and severally liable: If the shareholders transfer their equity without fulfilling or fully fulfilling their investment obligations, they may be required to bear liability within the scope of the unpaid capital and interest; If the shareholders abuse the legal person's independent status and limited liability to evade debts and seriously harm the interests of creditors, the company's independent personality may be denied in accordance with the legal person's disregard system; If the shareholders of a one-person limited liability company cannot prove that their property is independent of the company, they shall bear joint and several liability for the company's debts; If the shareholders withdraw their investment, they shall bear liability within the scope of the withdrawn principal and interest. When claiming, the party concerned shall bear the corresponding burden of proof. It is recommended to entrust a lawyer to retrieve the industrial and commercial archives, capital verification reports, and bank transaction records to lock in clues. The relevant enforcement can be evaluated together with the legal services of creditor-debtor and enforcement cases.

Q3: If a company borrows money from me, is the agreed interest rate protected by law?

Protected, but subject to limits. According to Article 25 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Civil Loan Cases" (amended on December 23, 2020), if the interest rate agreed upon by the lender and the borrower does not exceed four times the one-year loan market reference rate (LPR) at the time of the contract's conclusion, the people's court shall support it; the interest agreed upon in excess of this amount shall be invalid, and the portion exceeding four times the LPR that the borrower has already paid may be deducted from the principal. Article 26 also stipulates that if the lender deducts interest from the principal in advance (head-cutting interest), the court shall determine the principal based on the actual amount lent. Therefore, even if the other party is a company, the high interest rate agreed upon is not necessarily fully protected. The lender should agree on an interest rate within four times the LPR and specify the interest calculation method in the contract. If the borrower is charged an excessively high interest rate, he/she may claim adjustment according to law. When suing, the borrower should provide evidence of the interest rate agreement, and the court shall calculate the legitimate principal and interest amounts. For more procedures, please refer toLegal services for creditor-debtor disputes and enforcement cases.

Q4: If I want to sue a company for not repaying a loan, which court should I go to and what materials should I prepare?

In terms of jurisdiction, according to Article 24 of the Civil Procedure Law, lawsuits arising from contract disputes shall be under the jurisdiction of the court at the defendant's domicile or the place of performance of the contract; the parties to the loan may agree on jurisdiction in writing. If there is no such agreement, the place where the party receiving the money (the lender) is located can usually be identified as the place of performance of the contract, and the lender's local court may also have jurisdiction. The specific determination shall be based on the agreement and evidence. The materials required include: ① a complaint (stating the information of the plaintiff and the defendant, the claims, and the factual grounds); ② the lender's ID card and the company's business registration information (printed from the National Enterprise Credit Information Publicity System); ③ the loan contract or promissory note and debt note; ④ bank transfer receipts and WeChat/Alipay payment records to prove the payment of the funds; ⑤ collection records for interrupting the statute of limitations; and ⑥ clues to the company's assets for facilitating preservation. Having all the materials ready can improve the efficiency of case filing and preservation. It is recommended to handle it through the following channels:Beijing Henglu Law FirmHelp sort out the list of evidence.

Q5: If the company goes bankrupt or is deregistered, can I still recover my loan?

There is still a possibility, but the time limit and procedures are different. If the company enters bankruptcy proceedings, you should declare your claims to the administrator within the time limit set by the court for creditor's claims, submit loan notes and transfer certificates, and receive compensation in accordance with the order of distribution of bankruptcy assets after verification; failure to declare will result in the loss of eligibility to participate in the distribution. If the company is deregistered without liquidation, you can require the liquidation obligors such as the shareholders of limited liability companies, the controlling shareholders of joint-stock limited companies, and the actual controllers to bear compensation liability in accordance with relevant judicial interpretations; if the shareholders promise to assume the debt, you can directly claim it. In addition, if there are cases of shareholders failing to pay the actual capital, withdrawing funds, or property confusion, you can claim compensation from them within their scope of responsibility. The key is to assert rights and fix property clues in time before deregistration or bankruptcy, and apply for preservation measures when necessary. For the confirmation of relevant creditor's rights, you can refer to the relevant provisions.Legal services for creditor-debtor relations and enforcement cases.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards 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, to avoid missing the statutory time limit. →\nLegal services for creditor-debtor disputes·Beijing Henglue Law Firm