Case Description

The three parties jointly invested and established Company A with a registered capital of 30 million yuan. The amount of capital contribution made by Party A is 20 million, the amount of capital contribution made by Party B is 6 million, and the amount of capital contribution made by Party C is 4 million. The articles of association stipulate that the time limit for each party's capital contribution is December 8, 2047. Since then, Party A has completed all the capital contributions, while Party B has successively invested 3 million yuan, while Party C has not actually contributed.

In 2020, Company A encountered some difficulties in its operation and had many external liabilities. Both Party A and Party B believed that they had already made capital contributions, but only Party C had no sign of making capital contributions. Therefore, they urged Party C to expedite the completion of capital contributions. However, Party C believed that the deadline for capital contribution stipulated in the articles of association was far from being met, so it refused the request of Party A and Party B. On August 15, 2020, in the event that shareholder C refused to attend the shareholders' meeting, Company A formed a "Shareholders' Meeting Resolution", which included amending the company's articles of association for the company's operational needs. The term of contribution of shareholders was changed from December 8, 2047 to September 15, 2020, and the resolution was approved by shareholders with more than two-thirds of the voting rights. "C believes that the majority shareholder has shortened the term of capital contribution by means of a majority decision, which has infringed upon his own interests, so he brings a lawsuit to the court and requests the court to confirm that the resolution is invalid.".

Lawyer Analysis

1、 Effectiveness of resolutions on shortening the period of capital contribution

Article 28 of the Company Law of the People's Republic of China stipulates that "shareholders shall pay their respective subscribed capital contributions as stipulated in the articles of association in full and on schedule.". The revised company law in 2013 established a capital subscription system, which not only eliminated the restriction on the first paid in ratio, but also no longer stipulated a minimum registered capital. Under the capital subscription system, shareholders can jointly determine a longer term of contribution through consultation.

The term of contribution of shareholders involves their own fundamental interests and plays a decisive role in their investment. Before the expiration of the term of contribution, the company has no right to require shareholders to make capital contributions in advance without legal reasons. If the shareholders who hold the majority of capital arbitrarily modify the term of contribution at any time through a capital majority decision, it may infringe upon the legitimate rights and interests of other small and medium-sized shareholders. Therefore, in the absence of specific circumstances, even if the shareholders' meeting adopts a two-thirds majority vote to shorten the investment period, the resolution will be deemed invalid by the court.

2、 How to shorten the investment period

Of course, in practice, not all resolutions of the shareholders' meeting that contribute capital in advance are considered invalid. If it is indeed necessary for shareholders to contribute to the normal operation of the company, or if there is no shareholder's contribution that may cause the company to be unable to continue to exist, there are also cases where the company requires shareholders to contribute in advance under certain conditions, which have been recognized by the court.

If a company wants to shorten the period of shareholders' capital contributions, it usually needs to meet the following conditions: First, there is legitimacy and urgency for the company to require shareholders to make capital contributions in advance, that is, the company is seriously short of operating funds and unable to operate normally. In practice, it can reflect the situation of serious losses in the company through financial statements or audit reports, etc; The second is that shareholders who agree to make capital contributions in advance should have fulfilled their capital contribution obligations and provide corresponding certificates. The third is that the company should perform due decision-making procedures, convene a shareholders' meeting and pass a two-thirds or more vote. 4、 Pay attention to giving shareholders who do not make capital contributions a reasonable time limit. If the above conditions are met, the resolution made by the shareholders' meeting to shorten the investment period may be recognized as valid by the court.
To sum up, in the case of a serious shortage of funds in Company A, the shareholders who have already made capital contributions, Party A and Party B, may require Company C to make capital contributions in advance within a reasonable period of time through a two-thirds shareholder resolution.