1. What a Guangzhou equity lawyer does for you

• Financing and equity disputes: capital increases, valuation adjustment and repurchase obligations, disputes between investors and founders over equity adjustments
• Status and nominee shareholding: establishing beneficial ownership and disclosure, claims where a nominee disposes of shares (Arts. 22, 24)
• Governance and resolution validity: actions that a resolution is void (Art. 25), voidable (Art. 26) or not established (Art. 27)
• Transfers and pre-emption: review of transfer agreements, pre-emption rights (Arts. 84, 85), contribution liability on unmatured share transfers (Art. 88)
• Shareholder remedies: right of information (Art. 57), profit distribution (Arts. 210, 212), dissenting repurchase (Art. 89), judicial dissolution (Art. 231)
• Cross-border and regional investors: foreign-related structures, cross-border contributions and nominee arrangements, Hong Kong and Macao investment structures

2. Which court in Guangzhou hears your equity dispute?

2.1 General rule: the company’s domicile

Under Article 27 of the Civil Procedure Law, actions arising from the establishment of a company, confirmation of shareholder status, distribution of profits and dissolution are heard by the court of the company’s domicile — that is, the people’s court of the district where the company is registered. Significant first-instance cases and appeals go to the Guangzhou Intermediate People’s Court.

2.2 Foreign-related and Hong Kong / Macao / Taiwan cases: Yuexiu and Nansha

Foreign-related and Hong Kong / Macao / Taiwan commercial cases in Guangzhou are subject to centralised jurisdiction. Under the position of the Guangdong High People’s Court, the Guangzhou Intermediate People’s Court hears first-instance cases with an amount in dispute of RMB 40 million or more, while four categories of foreign-related commercial cases below that threshold — security interest disputes (where the principal contract is commercial or financial), commercial contract disputes, company and partnership disputes, and securities, futures, trust, insurance and financial derivative disputes — are heard by the Yuexiu District People’s Court (covering Haizhu, Liwan, Baiyun, Huadu and Conghua) and the Nansha District People’s Court (covering Tianhe, Huangpu, Panyu and Zengcheng). Other foreign-related civil and commercial cases not subject to centralised jurisdiction are heard by the district courts.

2.3 Arbitration under an arbitration clause

The most common choice in Guangzhou is the Guangzhou Arbitration Commission (GZAC), also known as the Guangzhou International Arbitration Court. GZAC is a leader in online arbitration and cross-border disputes can be advanced through its online platform, which suits headquarters companies and cross-border transactions.

3. Common equity disputes in Guangzhou

• Valuation adjustment and repurchase disputes: repurchase obligations triggered by missed performance targets, and disputes over the repurchasing party and price calculation
• Validity and funding of capital increases: procedural defects in the increase resolution, payment of subscribed capital and acceleration of unmatured contributions (Art. 54)
• Actions on resolution validity: voidable actions for unlawful convening or voting (60-day period, Art. 26) and actions that a resolution was not established (Art. 27)
• Exits from employee shareholding platforms: transfers of partnership interests, withdrawal and buy-out pricing
• Shareholder status in SOE restructuring: contributions, affiliation arrangements and property-rights delineation in historical structures
• Minority oppression and buy-out exit: remedies under Article 89 where a controlling shareholder abuses its rights to the prejudice of other shareholders

4. How we work

1. Commercial objective first: establish whether the client wants control, a cash exit or a valuation correction, then work back to the legal route.
2. Document and procedure review: examine the articles, shareholders’ agreement, subscription agreement and repurchase clauses, and audit the convening and voting of past resolutions.
3. Dispute resolution design: compare litigation and arbitration (including cross-border online arbitration) for cost and confidentiality, and apply for asset preservation where needed.
4. Enforcement and closing: deliver the judgment or award and complete the share registration and corporate governance documents.

5. Frequently Asked Questions (FAQ)

Q1: 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 with an amount in dispute 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 securities and financial derivatives disputes) are heard by the Yuexiu District People’s Court and the Nansha District People’s Court (Guangdong Pilot Free Trade Zone Nansha Area People’s Court). Confirm whether the case falls within the centralised jurisdiction before filing.

Q2: Can a defective resolution be set aside, and within what period?
Under Article 26 of the new Company Law, where the convening procedure or voting method of a shareholders’ or board meeting violates laws, administrative regulations or the articles, or the content of the resolution violates the articles, a shareholder may apply to the court to set it aside within 60 days of the resolution. Defects that are merely minor and have no substantive effect are excepted. A shareholder not notified of the meeting may apply within 60 days of learning of the resolution, and the right lapses one year after the resolution.

Q3: What can be done if the company fails to honour a repurchase obligation under a valuation adjustment agreement?
First distinguish whether the repurchasing party is the company or the founders — the ability to perform and the legal route differ. Where the company is the repurchasing party, check whether the capital reduction procedures under the Company Law (Art. 224) have been completed, since a failure to reduce capital lawfully may affect performance. Identify the agreement terms, assess available assets and consider asset preservation early to avoid winning an award that cannot be enforced.

Q4: How does a nominee shareholder establish status and become registered?
Under Article 22 of the Third Judicial Interpretation on the Company Law the claimant must prove lawful subscription or payment of capital, or acquisition by transfer or succession, without breaching mandatory provisions. Article 24 provides that a nominee arrangement is valid absent statutory grounds of invalidity, but disclosure — changing the shareholder, entry in the shareholders’ book and registration — requires the consent of more than half of the other shareholders. Secure the contribution and management-participation evidence before suing.

6. Contact us

Lawyer Kevin Jun Lin | Guangdong Zhenpin Law Firm

Phone / WeChat: +86 189 3887 1445

Office: Room 4004, Tower B, Shenfang Plaza, 3005 Renmin South Road, Luohu District, Shenzhen, China

Online: Contact us | FAQ | About us

Service areas: Guangzhou Equity Lawyer | Shenzhen Equity Lawyer | Dongguan Equity Lawyer | Huizhou Equity Lawyer