Source: Supreme People's Court
"Provisions of the Supreme People's Court on Several Issues Concerning the Enforcement of Equity in the People's Court" was adopted by the 1850th meeting of the Judicial Committee of the Supreme People's Court on November 15, 2021. It is now announced and will come into effect on January 1, 2022.
Supreme People's Court
December 20, 2021
Fashi [2021] No. 20
Supreme Court
Provisions on Several Issues Concerning the Personnel’s Court’s Compulsory Execution of Equity
(adopted at the 1850th meeting of the Supreme People’s Court Judicial Committee on November 15, 2021, and will come into effect on January 1, 2022)
In order to correctly handle relevant issues in the compulsory execution of equity in the People’s Court and safeguard the legitimate rights and interests of the parties and interested parties, these provisions are formulated in accordance with the Civil Procedure Law of the People’s Republic of China, the Company Law of the People’s Republic of China and other laws, and in combination with the actual implementation of the execution work.
Article 1 The equity referred to in these regulations includes equity of limited liability companies and shares of joint-stock companies, but the shares of joint-stock companies listed on stock exchanges established in accordance with the law and traded on other national stock trading venues approved by the State Council .
Article 2 If the person subject to execution is a shareholder of the company, the people's court may enforce the equity it holds in the company and shall not directly enforce the company's property.
Article 3 If the jurisdiction court is determined by the location of the executed equity in accordance with Article 224 of the Civil Procedure Law, the location of the equity refers to the domicile of the company where the equity is located.
Article 4 The people's court may freeze the equity belonging to the person subject to execution as stated in one of the following information or information:
(I) Articles of association, shareholder register and other information of the company where the equity is located;
(II) Registration and filing information of the company registration authority;
(III) Public information of the National Enterprise Credit Information Disclosure System.
If a non-party filed a severance objection to the frozen equity based on the substantive rights, the people's court shall review it in accordance with Article 227 of the Civil Procedure Law.
Article 5 The people's court freezes the equity of the person subject to execution, and shall not be frozen if the price is sufficient to repay the amount of the debt and the execution expenses determined by the effective legal document. If the equity price of cannot be determined, it can be frozen according to the proportion or quantity applied for by the applicant for freezing.
The person to be executed believes that the amount that has been frozen is significantly exceeded, and may raise a written objection in accordance with Article 225 of the Civil Procedure Law, and attach evidence materials to prove that equity and other seizure, seize and freeze property price. If the people's court rules that an objection is established after review, it shall lift the freezing of the amount that is significantly exceeding the standard within seven days from the date of the ruling.
Article 6 When the people's court freezes the equity of the person subject to execution, it shall serve a ruling and a notice of assistance to the company registration authority, and require it to publicize it in the National Enterprise Credit Information Disclosure System. equity freeze freeze and legal effect will take place during public announcement of the system. If multiple people's courts freeze the same equity, they shall first freeze if the public announcement is handled in the public notice system. If the equity of the person subject to be executed is frozen in accordance with the provisions of the preceding paragraph, the ruling shall be delivered to the person subject to be executed and the applicant for execution in a timely manner, and the company in which the equity is located shall be notified in writing of the equity freezing situation.
Article 7 The transfer, pledge or other acts that hinder the execution of the person subject to execution shall not be opposed to the applicant for execution.
Article 8 If the people's court freezes the equity of the person subject to execution, it may serve a notice of assistance to the company where the equity is located, requiring them to report the relevant situation in writing to the people's court before implementing capital increase, capital reduction, merger, division, etc. that have a significant impact on the proportion and equity value of the frozen equity. After receiving the report, the people's court shall promptly notify the applicant for execution, except where state secrets or commercial secrets are involved.
If the company where the equity is located performs the acts stipulated in the preceding paragraph without reporting to the people's court, it shall be handled in accordance with Article 114 of the Civil Procedure Law.
If the company where the equity is located or the company's directors and senior management deliberately depreciates the value of the frozen equity through capital increase, capital reduction, merger, division, transfer of major assets, and providing guarantees to the outside world, which affects the realization of the debt rights of the applicant, the applicant for execution may file a lawsuit in accordance with the law.
Article 9 The People's Court shall freeze the dividends, dividends and other income enjoyed by the person subject to execution based on the equity, and shall serve a ruling to the company where the equity is located and require it to notify the People's Court when the income expires. The people's court may notify the company where the equity is located in writing to the applicant for execution or the people's court for the due dividends, dividends and other income.
After dividends, dividends, dividends and other income are frozen, and the company where the equity is located makes a payment to the person subject to execution or pays in disguise, it will not affect the people's court's request to the company where the equity is located to pay the income.
Article 10 The person subject to execution applied for a self-change price and was frozen in equity. With the consent of the applicant and other known execution creditors or the change of the price is sufficient to repay the execution debt, the people's court may approve it, but the change of the price shall be supervised within the specified period without controlling the change of the price, for a maximum of no more than three months.
Article 11 When the equity of the person subject to be executed is auctioned, the people's court shall determine the reference price for equity disposal in accordance with the procedures stipulated in the "Regulations of the Supreme People's Court on Several Issues Concerning the Determination of Reference Price for Property Disposal of Property", and determine the starting price for reference. If the reference price is determined by
, the people's court may retrieve it from the company registration authority, tax authority and other departments, or order the person to be executed, the company where the equity is located, and other entities controlling the relevant materials to provide it; if it refuses to provide it, it may be withdrawn forcibly and may be handled in accordance with the provisions of Articles 111 and 114 of the Civil Procedure Law.
In order to determine the reference price for equity disposal, the people's court may entrust an auditing agency to audit the company where the equity is located after the parties apply in writing.
Article 12 entrusts the evaluation of the equity of the person subject to execution. If the evaluation institution fails to evaluate the complete materials required for the evaluation or believes that it affects the evaluation results, the person subject to execution fails to provide and the people's court is unable to retrieve supplementary materials, the people's court shall notify the evaluation institution to evaluate based on the existing materials and inform the parties of the possible adverse consequences due to the lack of materials. If the evaluation agency cannot issue an evaluation report based on existing materials, the people's court may determine the starting price based on the specific circumstances at an amount appropriately higher than the execution fee after the applicant for execution application, but the operation of the company where the equity is located is serious and the equity is obviously worthless. If the starting price determined in accordance with the provisions of the preceding paragraph is auctioned, the amount of deposit that the bidder should pay in advance shall be determined by the People's Court based on the actual situation.
Article 13 The people's court shall adopt online judicial auction method when auctioning the equity of the person subject to execution.
Based on the disposal reference price and in combination with the specific circumstances, if the proceeds from the auction of frozen equity may be significantly higher than the amount of the debt and the execution expenses, the people's court shall auction the corresponding part of the equity. If the auction of the corresponding part of the equity is seriously reduced to the value of the frozen equity, the excess of the frozen equity can also be auctioned together after the written application of the person subject to execution.
Article 14 If the person subject to execution or the interested party requests that the equity is not allowed to be forcibly auctioned on the grounds that one of the following circumstances occurs, the People's Court will not support it:
(I) The person subject to execution fails to perform the capital contribution obligation in accordance with the law or fails to fully perform the capital contribution obligation in accordance with the law;
html ml9 (II) The capital contribution subscribed by the person subject to execution has not expired;
(III) There are restrictions on the transfer of the equity by itself;
(IV) The company's articles of association, shareholder agreement, etc. have restrictions on the transfer of the equity by itself.
When the people's court auctions equity in the first and second circumstances of the preceding paragraph, it shall state the amount of capital subscribed by the person subject to execution, the amount of capital paid, the period of capital contribution and other information in the auction announcement. After the equity is disposed of, the relevant entities shall fulfill their capital contribution obligations in accordance with relevant regulations.
Article 15 If the change of equity of should be approved by the relevant departments, the people's court shall state in the auction announcement that the qualifications or conditions that the bidder shall have as stipulated by laws, administrative regulations or decisions of the State Council. If necessary, the people's court may seek opinions from relevant departments on bidding qualifications or conditions. After the auction is completed by
, the people's court shall notify the buyer to apply to the relevant department for approval procedures for equity change with the transaction confirmation letter. If the buyer obtains the approval procedures, the people's court shall make an auction transaction ruling; if the buyer fails to obtain the approval procedures within a reasonable period of time, the equity shall be auctioned again. If the auction is re-auctioned, the original buyer shall not participate in the bidding.
If the buyer knows that he does not meet the bidding qualification or the conditions are still involved in the bidding, and fails to obtain the relevant department's equity change approval procedures within a reasonable period after the transaction, the deposit paid will not be refunded. margin is not sufficient to pay for the expenses and losses arising from the auction and make up for the difference in the re-auction price is lower than the original auction price difference, the people's court may rule that the original buyer will pay the compensation; if the compensation is refused, it shall be enforced.
Article 16 If the effective legal document of determines that the person subject to execution delivers the equity. If the company where the equity is located increases or reduces the capital after the effective legal document is made, the people's court shall handle it separately according to the following circumstances:
(I) effective legal document has clearly stated the capital contribution of the equity, and the equity shall be delivered according to the capital contribution;
(II) If the effective legal document of only clearly expresses the delivery of a certain proportion of the equity, will deliver the equity in accordance with the proportion of the capital contribution corresponding to the total registered capital of the company when the effective legal document is made.
Article 17 In the trial of a shareholder qualification confirmation dispute case, if the parties make a lawsuit request to the company to issue a capital contribution certificate, record it in the shareholder register and handle the company registration authority, and their claim is established, the people's court shall support it; if the parties fail to submit the above lawsuit request, they may explain it to them according to the specific circumstances of the case.
effective legal documents only confirm that the equity belongs to the parties, and the parties may apply to the company where the equity is located and the company registration authority to go through the equity change procedures; if they apply for compulsory execution to the people's court, the parties will not accept it.
Article 18 If the people's court enforces the investment rights enjoyed by the person subject to execution in other profit-making legal persons, these provisions shall be applied in accordance with reference to.
Article 19 These regulations shall come into effect on January 1, 2022.
If the judicial interpretation published by this court before the implementation is inconsistent with these provisions, these provisions shall prevail.
Attachment: Main document reference style
××× People's Court
Assistance execution notice
(××××)............... No.
××× Market Supervision Administration:
According to the enforcement ruling of this court (××××)....................., in accordance with Article 242 of the Civil Procedure Law of the People's Republic of China and Article 6 of the "Regulations of the Supreme People's Court on Several Issues Concerning the Enforcement of Equity of the People's Courts", please assist in the implementation of the following matters:
1. Publicize the following situations: Freeze the person to be executed (type, number,...) holds ×××... (amount of equity), and the freezing period will be from ×××××× to ××××××;
2. During the freezing period, the frozen equity shall not be handled within the scope of your authority without the permission of this court. etc. that hinder execution (describe specific assistance to execution according to different company types and freezing needs).
××××Year ××Month ××Day
(Court Printing)
Agency Personnel: ×××
Contact Number:...
××× People's Court
Assisting for execution notice
(Receipt)
××× People's Court:
Your court (××××)..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................
××××Year ××Month ××Day 6
Agency personnel: ×××
Contact number:...
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