Company capital reduction VS Targeted capital reduction
According to relevant laws and regulations, a company can reduce its registered capital after legal procedures. So, can the company target a certain shareholder to reduce its capital? If the shareholders pass a resolution of targeted capital reduction, what is the effectiveness of the resolution?
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1. Reproduction of targeted capital reduction cases for a limited company
2. Key points of court judgment on the effectiveness of targeted capital reduction cases for a limited company
3. Lawyer's opinions and suggestions on targeted capital reduction for a limited company
1. Reproduction of targeted capital reduction cases for a limited company
1. The shareholders' meeting of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
2. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
3. The voting result of the resolution involved in the case was that all shareholders except Hua Mou agreed, and the shareholders who agreed to the resolution accounted for 75.5% of the total number of shares.
4. The financial statements of XXX company show that the company was in a serious loss from February to October 2018. The net assets at the time of the company's resolution were more than 8.42 million yuan, and the net assets in October of the same year were only more than 2.3 million yuan.
5. Hua sued the court and claimed: 1. The company's targeted capital reduction should be unanimously agreed by all shareholders, rather than the shareholders holding more than 2/3 of the voting rights. Items 1, 3 and 4 of the resolution involved in the case involve the readjustment of the company's equity structure. Without the unanimous consent of all shareholders, it violates the basic principle of "same share and same rights" of Company Law, and should be unaffirmed; 2. The practice of X-Meng Company to return the capital reserve fund to individual shareholders is actually to distribute the company's assets to individual shareholders in disguise without the liquidation procedure, which not only infringes on the company's property rights, but also damages the interests of other shareholders and company creditors. Moreover, X-Meng Company is in a loss-making situation. Allowing shareholders to withdraw the capital reserve fund will lead to the inability to protect the interests of external creditors, so the second item of the resolution involved in the case is invalid.
6. The People's Court of Pudong New District of Shanghai made the Civil Judgment No. (2018) Shanghai 0115 Minchu 32686 on August 8, 2018: All Hua's lawsuits were rejected. After the first instance judgment of
, Hua was dissatisfied and appealed to the Shanghai No. 1 Intermediate People's Court. The Shanghai No. 1 Intermediate People's Court made the civil judgment No. (2018) Hu01 Civil Final 11780 on February 1, 2019. The judgment: 1. The civil judgment No. (2018) Hu0115 Minchu 32686 made by the People's Court of Pudong New District, Shanghai; 2. Confirm that the first, third and fourth resolutions of the shareholders' meeting resolution made by the respondent X-Ming Company on March 1, 2018 were not established; 3. Confirm that the second item of the shareholders' meeting resolution made by the respondent X-Ming Company on March 1, 2018 was invalid.
2. Court judges on the effectiveness of targeted capital reduction in the court on the effectiveness of targeted capital reduction in the company
The court effective judge believes that targeted capital reduction will directly break through the equity distribution situation at the time of establishment of the company. If only more than two-thirds of the shareholders with voting rights can make different capital reduction resolutions. In fact, it is a majority decision to change the equity structure formed by the promoters' unanimous decision when the company is established. The targeted capital reduction resolution involved in the case violated the basic principle that the equity structure was the result of the consensual result of all parties when the company was established. The first, third and fourth items of the shareholders' meeting resolution involved in the case comply with Article 5, item (5) of the "Interpretation of the Company Law (IV)" "Other circumstances that lead to the incompleteness of the resolution."At the same time, the trial court also believed that the company was in a continuous loss situation. If the company was allowed to return 5 million yuan of investment funds to the company, it would lead to a large-scale reduction of the company's assets, damage the company's property and credit foundation, and also damage the interests of other shareholders of the company and the company's creditors. Therefore, Hua's claim that the second item of the shareholders' meeting resolution involved in the case has factual and legal basis and should be supported.
3. Lawyers’ opinions and suggestions on targeted capital reduction of limited liability
Article 43, paragraph 2 of my country’s Company Law stipulates: "The shareholders’ meeting makes a resolution to amend the company’s articles of association, increase or decrease the registered capital, and a resolution to merge, split, dissolve or change the company’s form must be passed by shareholders representing more than two-thirds of the voting rights." But why are the matters related to the shareholders’ meeting resolutions in the case determined by the court’s effective judgment as inactivity or invalid? How to understand the legal connotation of this article? How to reduce capital in the company? This lawyer makes the following analysis for reference in shareholders' practice.
1. Article 43 of the Company Law Connotation: It only refers to the company's reduction of registered capital itself
Article 43 of the Company Law stipulates the rules of procedure for the company's capital reduction, that is, the resolution of a company's reduction of registered capital must be passed by shareholders representing more than two-thirds of the voting rights. From the perspective of legal interpretation , the "reducing registered capital" in this paragraph only refers to the company's reduction of registered capital itself and does not cover the allocation of capital reduction shares among shareholders. Therefore, the provisions of this paragraph on "representing more than two-thirds of the voting rights" only restrict the company's reduction of registered capital and do not restrict the reallocation of capital reduction shares among shareholders.
2. Co., Ltd. can deny the reduction of capital: if the law does not explicitly prohibit it, it can be
. Regarding the classification of company capital reduction, there will be different types according to different standards. According to whether the proportion of capital reductions by shareholders is the same, the company's capital reduction can be divided into equal proportion of capital reduction and unequal proportion of capital reduction. Equal proportion of capital reduction refers to capital reduction in which the proportion of capital contributions or shares of each shareholder remains unchanged after the company's capital reduction; unequal proportion of capital reduction means targeted capital reduction, which refers to the capital reduction method in which the proportion of capital contributions or shares of each shareholder changes after the capital reduction.
Can the company carry out targeted capital reduction? my country's Company Law does not make clear provisions, but my country's Company Law does not make negative provisions on targeted capital reductions for companies. According to the principle that it is possible to do without express prohibition by law, a limited company may reduce its capital in a targeted manner.
3. Rules of procedure for targeted capital reduction of Co., Ltd.: All shareholders must agree that
Co., Ltd. is not only inclusive and personal. The shareholding ratio is directly related to the basic rights and obligations of shareholders and should comply with the principle of voluntary voluntary. If the shareholders representing more than two-thirds of the voting rights pass, a resolution on reducing capital can be made in different proportions. In fact, it is a majority decision to change the equity structure formed by the unanimous resolution of the promoters when the company is established, which violates the principle of shareholders' voluntary. At the same time, exercising rights in terms of capital contribution ratio is a basic manifestation of shareholders' equal rights. The targeted capital reduction resolution made without the unanimous consent of all shareholders also violates the basic principle of "same shares and same rights". Therefore, the targeted capital reduction of a limited company must be approved by all shareholders.
Therefore, the company's major shareholder and actual controller should correctly understand the relevant provisions of the Company Law and perform the agreement between shareholders on the principle of integrity. One-sided understanding of relevant legal provisions and attempting to harm the interests of minority shareholders or creditors with "legal" resolutions will not receive legal support.
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