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Equity Dispute FAQ

Below are frequently asked questions on equity and shareholder disputes, compiled by Lawyer Kevin Jun Lin from litigation practice. Every case differs — please consult a lawyer for advice on your specific situation. Answers are currently published in Chinese; use the language switch for the Chinese version, or contact us in English through the form.

Now that the new Company Law abolished “majority consent,” is dividing equity in divorce easier?

For “transfer efficiency,” yes: new Company Law Art. 84 replaces majority consent with a notice system, and no reply within 30 days is a waiver, sharply shortening the blocking period. But the right of first refusal itself remains, and the substantive barrier to the “spouse’s entry” persists — only the procedure is clearer.

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婚内签的”股权归我”协议,离婚时法院一定认吗?

首页 › 婚内签的”股权归我”协议,离婚时法院一定认吗? 不一定。如果协议以离婚为条件(如”如离婚则股权归某方”),可能被定性为离婚协议,须离婚登记后才生效,未登记则不生效。如果协议是即时生效的婚内财产约定,则原则上有效,但可能因显失公平被撤销。

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Which court hears a foreign-related equity dispute in Guangzhou?

Foreign-related and Hong Kong / Macao / Taiwan commercial cases in Guangzhou are subject to centralised jurisdiction. Under the current position of the Guangdong High People’s Court, first-instance cases of RMB 40 million or more are heard by the Guangzhou Intermediate People’s Court; four categories of foreign-related commercial cases below that threshold (security interest, commercial contract, company and partnership, and…

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The other side makes the company look tiny with no money on the books, so the appraisal will surely be low—what do I do?

Focus on off-book factors: contracts, receivables, intangibles, pipeline projects, brand, and customer resources; also check for off-balance-sheet cycling and profit shifting. Apply to obtain tax filings and bank flows, and where possible exercise inspection rights (new Company Law Art. 57) to audit directly.

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Can the company refuse to register a minor heir as a shareholder?

Where the articles contain no exclusion clause, no. A minor inherits shareholder qualification under new Company Law Art. 90; the capacity issue affects only how rights are “exercised” (by the legal representative), not whether qualification is “obtained.” Where the articles contain a lawful exclusion clause, the clause governs (typically repurchase at a discount).

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I only realized after the appraisal that the reference date cost me—can it be changed?

An admitted appraisal report generally cannot be overturned merely because ‘a more favorable date later appears.’ But if the reference date was determined with procedural defects (e.g., no consultation, no explanation of legal consequences) or new evidence proves it was severely distorted, one may apply for the court to re-determine the date or re-appraise. Evidence must be timely; missing the…

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If the court orders the spouse to become a shareholder, can the other shareholders still say “no”?

A court order changing the equity registration is a judicial act and does not apply the “exercise” procedure of first refusal. But the court will affirmatively weigh the company’s associational nature; in practice the spouse’s success rate is limited, and most cases close with compensation in lieu.

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The company is registered in Shenzhen but mainly operates in Dongguan — where should we sue?

It depends which company the claim targets. Under Article 27 of the Civil Procedure Law, corporate-organisation disputes go to the court of the company’s domicile: sue the Shenzhen company in Shenzhen; sue the Dongguan company in the First, Second or Third People’s Court of Dongguan according to the town. Where the claim is contractual, such as an unpaid transfer or…

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Which court has jurisdiction over a company equity dispute in Huizhou?

The Huizhou Intermediate People’s Court supervises six basic-level courts: Huicheng District, Huiyang District, Boluo County, Huidong County, Longmen County and the Daya Bay Economic and Technological Development Zone. Under Article 27 of the Civil Procedure Law, corporate-organisation disputes go to the court of the company’s domicile, that is the basic-level court covering the registered district or county. Larger or more…

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If the other shareholders exercise first refusal, can I still get money?

Yes. After first refusal is exercised, the transfer price, as the consideration for the equity’s property value, remains part of the community property and is divided proportionally on divorce. The spouse merely changes form from “equity” to “proceeds.”

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