Talk to Us
If you are facing a legal issue involving business operations, shareholder rights, corporate governance, commercial disputes or White-Collar Crime, leave your question here. Lawyer Kevin Jun Lin will get back to you, and representative questions will be added to the FAQ library for other visitors.
Request a Consultation
The lawyer will get back to you shortly. Your information is kept strictly confidential.
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.
I discovered the resolution is unlawful, but two years have already passed—can I still sue?
It depends on the type. If it is a ‘void resolution’ (content violating mandatory law) or ‘not formed’ (no meeting was held at all), there is generally no time limit and you may still sue. But if it is ‘voidable’ (procedural defect or violation of the articles of association), the 60-day period has lapsed and the court will dismiss it.…
Read the answer ›How is pre-marital equity that has not been fully paid in divided in a divorce?
The unpaid portion should be deducted from the assessed value, because the party acquiring the equity must continue to bear the capital contribution obligation (Article 88 of the newly revised Company Law). The cash-out should be calculated based on ‘the value corresponding to the paid-in portion,’ so as to avoid ‘receiving equity amounting to receiving debt.’ Source article: ‘The Company…
Read the answer ›After a dissolution is ordered, may the company continue to operate?
No. After dissolution is ordered, the company enters liquidation proceedings, ceases business activities unrelated to liquidation, and its assets, claims, and debts are dealt with by the liquidation group in accordance with the law, culminating in deregistration.
Read the answer ›The husband says the equity is held as nominee for a friend — how can the wife rebut this?
Require the other party to produce the written nominee agreement, actual capital contribution vouchers (bank statements) and dividend flow records. If the other party cannot provide a complete chain of evidence, the court will find the nominee holding not established and the equity will be marital property.
Read the answer ›The nominee's heir has already sold the equity — can I still recover it?
It depends on whether the buyer qualifies as a bona fide acquirer. If the buyer knew or should have known of the existence of the nominee shareholding relationship, a bona fide acquisition is not constituted, and you may assert that the transfer is void and recover the equity. If the buyer was unaware, paid a reasonable price, and completed the…
Read the answer ›Under the newly revised Company Law, are directors, supervisors, and senior management also liable for withdrawal of capital?
Yes. Article 53 of the newly revised Company Law provides that where loss is caused to the company, the directors, supervisors, and senior management who are responsible shall bear joint and several liability for compensation together with the shareholder who has withdrawn capital. Directors, supervisors, and senior management must exercise their duty of review when approving and handling large transfers…
Read the answer ›If the other shareholders have long known that I am the actual investor, is a further vote still required?
Not necessarily. If the other shareholders were aware of your status as the actual investor and raised no objection for a long time (for example, you actually attended shareholders’ meetings and received profit distributions), the court may treat it as ‘implied consent,’ and the majority-vote procedure need not be repeated. Source article: Who Loses When Nominee Shareholding Goes Wrong? Conditions,…
Read the answer ›After a resolution is revoked, can the assets the company previously transferred under it be recovered?
Revocation of a resolution renders it void ab initio, but transactions between the company and a bona fide third party are unaffected (the newly revised law protects bona fide counterparties). If the assets were transferred to a ‘knowing related party,’ you may separately claim damages for the related-party transaction rather than relying solely on the revocation of the resolution. Source…
Read the answer ›Who is entitled to the post-marriage appreciation of limited partnership (LP) interests held before marriage?
An LP does not participate in the management of partnership affairs. If you have not substantively participated in the operation of the partnership after marriage, the appreciation is more likely to be characterized as natural appreciation (separate property). However, if you make additional capital contributions after marriage or substantively participate in decision-making, it may be recharacterized as investment income (marital…
Read the answer ›What shareholding is required to bring an action for judicial dissolution of the company?
A shareholder (or shareholders aggregating) holding more than ten percent (10%) of the voting rights of the company may bring the action. Note that the calculation is based on “voting rights,” and the proportion of voting rights may differ from the proportion of capital contribution by virtue of the articles of association.
Read the answer ›