Frequently Asked Questions

23 2026-10

Can the securities firm forcefully liquidate the position when the stock pledge is subject to a margin call?

After the stock pledge is liquidated, whether the securities firm can force the position to be closed out depends on the contractually agreed upon liquidation line and the notification procedure. Articles 425, 428, and 437 of the Civil Code clearly stipulate the rules for the realization of the pledge right. If the procedure violates the rules or the price is unfair, the party concerned may claim ...

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23 2026-10

How is the joint and several compensation calculated for intermediary agencies?

The intermediary agency shall bear joint and several liability for compensation based on the actual losses, determined in accordance with the degree of fault and causality, and the scope of compensation shall include the loss of principal, interest, and reasonable legal defense costs; the jointly liable person may seek internal recourse, and the statute of limitations is three years.

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23 2026-10

Can shareholders request to review the company's financial records?

Shareholders may request to inspect the company's accounting books and accounting vouchers, but they shall submit a written request to the company and explain the purpose of the inspection. If the company has reasonable grounds to believe that the purpose of the inspection is improper, it may refuse the request and shall provide a written response within 15 days.

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23 2026-10

Is the equity transfer valid if the change registration has not been completed?

If the equity transfer has not been registered for change, the contract is generally still valid; the decision to change the shareholder register has internal validity, and the decision to register the change with the industry and commerce administration has external opposability. Unregistered changes cannot be used against bona fide third parties.

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23 2026-10

When transferring equity, do other shareholders have the right of first refusal?

When a shareholder transfers equity to a person other than a shareholder, the other shareholders shall have the preemptive right to purchase the equity under the same conditions; the transferor shall notify the other shareholders in writing of the quantity, price, payment method, and time limit, and the other shareholders shall exercise their right to purchase within 30 days.

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23 2026-10

If a shareholder's investment is not genuine, are the other shareholders liable for it?

If the shareholders' contributions are not genuine, the other shareholders at the time of establishment may bear joint and several liabilities within the scope of insufficient contributions; creditors may claim supplementary compensation within the scope of unpaid principal and interest, and the subscribed capital must be paid in full within five years. The statute of limitations for litigation is...

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23 2026-10

How can creditors hold shareholders accountable for withdrawing their invested capital?

If a shareholder withdraws his investment funds without authorization, the creditor may request the shareholder to bear supplementary compensation liability within the scope of the withdrawn capital and interest, and assist the directors, supervisors, and senior managers who assist in the withdrawal of funds to bear joint and several liability. The statute of limitations for litigation is three ye...

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23 2026-10

After the lease expires, who will own the renovated items?

After the lease expires, the ownership of the renovated items shall be as follows: those that have not become attached can be dismantled and recovered, and those that have become attached shall generally not be compensated; the renovation costs shall be borne by the tenant unless otherwise agreed in the contract.

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23 2026-10

Is it valid to sublet without the landlord's consent?

Subletting without the landlord's consent is not necessarily invalid. The landlord may terminate the contract. If the landlord knows or should have known about the subletting and does not raise objections within six months, it shall be deemed as consent. The statute of limitations for litigation is three years.

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23 2026-10

What situations are suitable for specialized legal advisors?

Special legal advisors are suitable for single matters with clear objectives and concentrated timeframes, such as protecting intellectual property rights, financing and mergers and acquisitions, major contracts, and bulk labor disputes, and they are paid based on the project commission.

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23 2026-10

Should startups hire legal consultants?

Startup companies are advised to hire legal consultants, but they can do so in stages: review the articles of association and IP ownership during the establishment phase, purchase legal services on a project-by-project basis after operations commence, and switch to annual contracts once the company stabilizes, all while keeping the budget under control.

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23 2026-10

How to choose a corporate legal counsel and a law firm?

The five key considerations when selecting a legal advisor are: professional matching, team configuration, response timeline, transparent fees, and professional ethics. Law firms accept mandates and sign written contracts in a standardized manner, ensuring clearer accountability for responsibilities.

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