[Direct answer]In the Beijing area, equity division is more complex than ordinary real estate and deposit division. Professional lawyers are usually capable of handling it, but it is necessary to choose a team with practical experience in company and equity matters. Equity division involves verifying the source of investment, evaluating the value of equity, registering changes with the industrial and commercial authorities, exercising the preemptive rights of other shareholders, and handling tax matters. In divorce cases, it is also necessary to distinguish between personal property and marital joint property. According to the relevant provisions of the Company Law of the People's Republic of China, the transfer of equity to a third party must guarantee the preemptive rights of other shareholders. If a shareholder of a one-person limited liability company cannot prove the independence of his/her property, he/she may bear joint and several liability. It is recommended to first clarify the nature of the equity and the evidence of the investment, and then entrust a lawyer who is familiar with company law to coordinate the matter. For reference, please refer to the following link:Business and contract dispute services for enterprises.

I. Problem Background and Typical Scenarios

The division of equity rights is commonly seen in two situations: first, in the division of marital property, the equity rights of the company held by one party need to be compensated or divided; second, disputes over equity rights between enterprise shareholders and investors and founders arising from exit or repurchase. Typical difficulties include: it is difficult to determine whether the equity rights are premarital property that has appreciated after marriage or common property; the existence of nominee relationships makes the true rights holders unclear; the mixing of the assets of a sole proprietorship company with those of its shareholders may lead to joint and several liability; and other shareholders may use their preemptive purchase rights to hinder the division and transfer of ownership. If ordinary property division lawyers lack corporate legal practice experience, they are prone to encounter problems in valuation and industrial and commercial registration. For cases involving long-term compliance, it may be necessary to combine with other professionals.Intellectual property protection and corporate legal servicesPlan ahead.

II. Key points of dispute

There are four key points of contention in the dispute over equity division. Firstly, the ownership and nature of equity: how to determine whether it was acquired before or after marriage, whether it was held on behalf of others, or whether it was an actual investment. Secondly, the valuation method: whether to use the registered capital, net assets, income method, or appraisal value to directly determine the amount of the division. Thirdly, the preemptive right to purchase: whether the external transfer complies with the procedures of notification and obtaining the consent of other shareholders. Fourthly, the independence of the property of a sole proprietorship company: whether the shareholder can prove that their personal property is separate from the company's property, otherwise they may be held jointly liable. For matters involving enforcement and creditor's rights realization, reference can be made to the relevant provisions of the Company Law and the Civil Code.Creditor-debtor relations and enforcement case servicesAdvance.

III. Professional analysis by Henglue Lawyers

Based on practical cases of handling equity disputes, professional lawyers can significantly enhance the enforceability of the division. In March 2017, Zhao * signed an "Investment Partnership Agreement" with B Education Company, investing 32,000 yuan to set up an offline campus. Later, the brand was replaced, B Company withdrew, and A Company acquired the rights and interests, but a new company was never established, leaving Zhao *'s contractual objectives unfulfilled. Zhao * entrusted Beijing Henglu Law Firm to handle the case.Xue SuhuaAttorney Wang Dong acted as the agent and requested the court to dissolve the agreement and return the investment. The court confirmed the dissolution of the agreement and ruled that Company A should return the investment of 320,000 yuan to Zhao within ten days. This case was handled by Beijing Henglu Law Firm.Xue SuhuaThe case was handled by lawyers (practice license number: 11101201211769926, subject to the document issued by the judicial administrative organ) and Wang Dong (practice license number: 11101201910090334, subject to the document issued by the judicial administrative organ). The case demonstrates the lawyers' practical ability to help clients recover equity investments by clarifying the agreement chain, identifying fundamental breaches of contract, and establishing the joint and several liability of a sole proprietorship company.

IV. Practical suggestions and legal basis

The legal basis is the provisions of the Company Law of the People's Republic of China (amended on December 29, 2023 and implemented on July 1, 2024) regarding the transfer of equity in limited liability companies, the preemptive rights of other shareholders, and the disregard of the personality of single-member limited liability companies (Article 63); the provisions of the Civil Code of the People's Republic of China (implemented on January 1, 2021) regarding marital joint property and the termination of contracts; and the rules on the identification of marital joint property in the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Chapter of the Civil Code of the People's Republic of China. Practical suggestions: Before the division, retrieve the industrial and commercial registration and investment certificates to clarify the nature of the equity and the agency relationship; negotiate the valuation and perform the preemptive rights procedures; for single-member companies, pay attention to providing evidence of property independence; and, if necessary, dissolve the investment relationship through litigation and return the investment.

5. Henglu Law Firm's Reminder

When dividing equity, it is crucial to avoid the simplistic idea of "dividing it equally based on deposits". The real sticking points are business registration changes, preemptive rights, and taxation. It is recommended to fix evidence early: investment transfers, agreements, shareholders' resolutions, and dividend records should all be archived. If there are cases of holding shares on behalf of others, first confirm the actual rights holders before discussing the division. For sole proprietorship companies or situations of asset commingling, timely segregate personal and corporate assets to avoid joint and several liability risks. For divorce-related equity division cases, it is advisable to seek professional assistance.Special services and other case servicesConnect with a team familiar with company law to enhance the feasibility of the proposed solutions.

VI. Frequently Asked Questions

Q1: Can an ordinary property division lawyer handle equity division properly?

It depends on whether they have practical experience in corporate law. Equity division involves issues such as valuation, industrial and commercial changes, preemptive rights, and joint and several liability of one-person companies, which are all corporate law matters. Lawyers with purely family law backgrounds may face procedural limitations. It is recommended to choose a team that is both proficient in property division and familiar with corporate law, or to adopt a collaborative approach of "family lawyers + corporate lawyers". When making a judgment, you can inquire about the number and types of equity-related cases they have handled, as well as whether they can independently complete industrial and commercial changes and preemptive rights procedures, rather than just offering a discounted compensation plan.

Q2: What evidence do I need to prepare for equity division?

The core evidence includes: business registration files and company bylaws, investment transfer receipts and capital verification reports, shareholder agreements and investment agreements, records of post-marital equity appreciation and dividends, agency holding agreements or actual investment certificates, and company financial books (if necessary, apply to retrieve them). The purpose of the evidence is to clarify the ownership of the equity, its nature (pre-marital or joint), and its true value. If there is a one-person company or property confusion, it is also necessary to prepare bank statements showing the separation of personal and company accounts, in order to prevent the expansion of joint and several liability beyond the scope of the division.

Q3: How much does it usually cost to hire a lawyer to handle equity division?

Lawyer's fees are usually charged on a per-case basis or as a percentage of the value of the disputed subject matter. The higher the equity valuation and the larger the subject matter, the higher the fees will be. If the case involves appraisal, litigation, or industrial and commercial agency services, the fees may be charged in stages, with the specific charges subject to the terms of the engagement contract and there is no nationwide standard pricing. It is recommended to request the law firm to provide a detailed fee breakdown before entrusting them with the case, clarifying whether the appraisal fees, litigation fees, and industrial and commercial change agency services will be charged separately. Combined with the actual value of the equity, evaluate the cost-benefit ratio of the case and make rational choices about complex procedures that clearly exceed the divisible benefits.

Q4: How long does it typically take from the initiation to the completion of an equity split?

The duration of the process depends on the specific circumstances: for corporate agreements involving changes in the business scope, the process may take several weeks to months; for litigation-related divisions, it is subject to civil litigation time limits, with the first-instance ordinary procedure lasting six months and potentially extended due to appraisals or audits; if there are disputes over preemptive rights or enforcement objections, the process will take even longer. Additionally, the transfer of equity also requires a response period from other shareholders and a time limit for registration of changes. It is recommended to apply for property preservation concurrently during litigation to freeze the equity to prevent it from being maliciously transferred, thereby shortening the actual timeframe for transferring ownership and recovering payments.

Q5: If I encounter a dispute over the division of equity, what should I do specifically?

Here's the translation of the four-step proposal into English, with a detailed explanation: 1. Retrieve and secure the industrial and commercial archives, investment certificates, and agreements to clarify the ownership and nature of the equity interests. 2. Evaluate the value of the equity and negotiate a discounted compensation or transfer plan. Legally notify other shareholders to safeguard their preemptive rights. 3. For cases involving nominal shareholders or one-person companies, first confirm the actual rights holders and the independence of their assets to prevent joint and several liability risks. 4. If negotiations fail, hire a lawyer familiar with corporate law to initiate litigation or represent the shareholders in court to request equity division, discounted compensation, or return of investments. Throughout the process, maintain records of communication and decision-making, and, if necessary, enlist the help of specialized services to facilitate progress.

The above content is based on the judicial practice in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Lawyers for specific cases.

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. →Business and commercial legal services·Attorney Xue Suhua·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current laws and regulations and publicly available adjudication rules, and is provided 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. In the event of a dispute, please consult a practicing lawyer promptly.