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BONING CASE

A case of dissolution of a company of a real estate development company in Ningbo, a third person

First, the case of basic information collection

Case type: Lawyer lawsuit case

Business Category: Corporate litigation

Court decision Time: February 26, 2014

Court name: Xiangshan County People's Court of Zhejiang province

Name of solicitor: Yang Weiguo, Zeng Jun

Law firm name: Zhejiang boning law Firm

Feeds: (real name, unit + names) Zhejiang boning law firm Zeng Jun

Review: (real name, progressive)

Retrieving the main inscription: human-combined obstacle management serious difficulties company deadlock company dissolved

 

Second, the case body collection

A case of dissolution of a company of a real estate development company in Ningbo, a third person

 

【Briefs】

March 2010, the plaintiff Yang MoU with the case of a joint venture to establish a defendant in Ningbo, a real estate company, registered capital of 10 million yuan. June 2010, the defendant through the listing form is located in the Xiangshan industrial Zone Chengdong Industrial Area and the east corner of the intersection, the northeast corner of two cases of land use rights. "State-owned construction land use right to sell contract" agreed that the site is idle for two years and did not start construction, the assignor (Xiangshan County Land and Resources Bureau) is entitled to free resumption of state-owned construction land use rights.

August 19, 2010, the plaintiff, Bao MoU and the third person of Ningbo City, a real estate development company signed the "Equity transfer Agreement", the agreement: After the transfer of equity, the defendant shareholders held a stake of 3 million yuan for the plaintiff to hold 30% of the equity, the third person to 7 million yuan to hold 70% of the equity; Two of the transfer price of land use rights, the defendant has paid 69 million yuan, as well as other rights and obligations content. August 24, 2010, August 25, the third person through the case of Ningbo, a building materials company to Xiangshan County Land and Resources Bureau to pay the surplus of 95.3 million yuan.

From April 2011 to September, the defendant commissioned the design company to undertake two plots construction project related project plan design, and paid some design fee. In October of that year, the defendant rented office space for office. In the same year October 21, the defendant to the Xiangshan County Land and Resources Bureau to put forward the application for the renewal of the mortgage registration, was approved for 1 years. Since then, the defendant has carried out a number of work on the development and construction of two plots, including through intermediary services to seek financing cooperation, commissioned by the relevant design companies to carry out traffic impact analysis, geotechnical engineering survey specifications and environmental protection feasibility analysis. In November 2012, the defendant again approved the application for the extension of the 1-year extension of the land mortgage registration and the completion time for the ancillary facilities.

September 16, 2011, November 14, the plaintiff and the third party signed two shareholder meeting resolution, Consent to the defendant in his name of the two land use rights for a Ningbo building materials company to the Industrial Bank Ningbo branch of the 95 million Yuan loan and Ningbo a metal material company to ICBC Ningbo branch of the 31 million yuan loan to provide collateral. After the two loans were due in 2012, the defendant again in his name of the two land use rights for a building materials company in Ningbo and Ningbo a metal material company total of 126 million yuan of bank loans to provide collateral security, but the defendant to the bank to provide the shareholder resolution and the board of Directors agreed to the mortgage submissions on the plaintiff's name is not his own signature.

In January 2013, the plaintiff complained to the Ningbo Public Security Bureau that the legal representative of the defendant had allegedly cheated the loan. March 15, 2013, the above two cases of land use rights cancellation mortgage registration. In the same year, March 19, the Ningbo Public Security Bureau made a decision not to file a complaint against the plaintiff. The plaintiff in the same year March 28 application for reconsideration, the Ningbo Public Security Bureau on April 3, 2013 to make a reconsideration decision to maintain the original decision.

July 22, 2013, the plaintiff filed a lawsuit, claims that the defendant has not held a shareholder meeting for three years, the cooperation between the shareholders has become a deadlock, the third person and the defendant's legal representative not only not to carry out the real estate project development, but also take the land use right under the defendant's name as its illegal financing platform, which causes the defendant to be in The plaintiff's interest was greatly lost. The basis for the human relationship between the shareholders is no longer in existence and the Court is requested to dissolve the defendant.

 

【Agent Opinion】

The defendant has been in normal operation and management since the third person became a major shareholder in August 2010.

1. A third person holds a 70% per cent stake in the defendant, and in accordance with the articles of Incorporation and the company law, the defendant will not form a company deadlock in the management of the shareholders ' meeting through the resolution of the shareholder meeting.

2. The main purpose of the defendants was to develop two plots of land in the East Industrial Park of the Xiangshan County industrial zone, and since 2010, the third person and the plaintiff had held several shareholder meetings for the Mortgage and project development of the two plots of land, and the corresponding shareholders ' meeting resolutions and minutes had been formed.

3. The accused has a normal organizational structure, employs the relevant staff to conduct day-to-day operations, operates around the purpose of the company's establishment, and pays most of the contract price.

4. The ownership of a third person comes from a plaintiff and an outsider in the case of abalone, the third person has fully fulfilled the financing obligation according to the agreement of the transfer of shares, and has paid 4.8 million yuan for the plaintiff to pay the amount of the tax payable by the plaintiff due to late payment of the land transfer payment and the share of the taxes and fees required for the land use certificate.

Second, the continued existence of the defendant in favor of the interests of the two shareholders, the dissolution of the company is not necessary.

1. The defendant, with two plots of land under his name, provides collateral for a building material company in Ningbo and a Ningbo metal material company, after the agreement of the shareholders ' meeting, the plaintiff still agrees that the defendant will continue to provide the mortgage guarantee for the loan, and that the mortgage guarantee is a probable debt, and does not necessarily impair the defendant and the shareholders ' interests.

2. The plaintiff complained to the public security organ that the legal representative of the defendant was suspected to have cheated on a loan, but the public security organ did not file. Now the mortgage guarantee has been written off and there is no case that may prejudice the interests of the defendant or the shareholders.

3. If the accused were dissolved, the land development project could not continue, and the defendant faced the enormous risk of land tenure being freely recovered by the government, while the defendant had almost no other property to liquidate except for the right to land, and ultimately the interests of two shareholders.

Third, the plaintiff in the defendant's management failure to perform the supervisory duties, its own fault, and exhaustion of other relief channels is the shareholder's request to dissolve the company's necessary preconditions, and the plaintiff did not prove that they have exhausted other relief channels.

In summary, request to dismiss the plaintiff's claim.

 

【Verdict】

The Xiangshan County People's Court of Zhejiang province rejected the lawsuit request of the plaintiff Yang on February 26, 2014 (2013) The first word of the letter No. No. 927.

 

【Referee Documents】

The court found that: although there is a certain contradiction between the defendant's two shareholders, the company's land development projects have not been carried out on schedule for objective reasons, but the plaintiff's request to dissolve the company's reasons is still inadequate. First of all, for the plaintiff to put forward the defendant's legal representative Pang MoU to cheat a loan, damage the shareholder's rights and interests. The Court concluded that the plaintiff had no direct evidence that Pang had signed the plaintiff's signature for personal gain, the public security organ also considers that the plaintiff's complaint is not a criminal offence and does not have a case, and that the two mortgage has been cancelled and the situation which may damage the shareholders ' interests has been eliminated. Secondly, the defendant does not exist in the three years of the plaintiff's claim that no shareholder meeting has been held and no effective resolution has been reached. According to the facts found in the trial, the plaintiff and the third person in September 16, 2011, the same year November 14 reached two effective shareholder meeting resolution, October 25, 2011, the original, the defendant and the third person also on the Xiangshan Industrial Area Land Development project held progress briefing, and formed the meeting minutes. Even if the third person or the defendant's executive director is negligent in discharging his duties, where a shareholder meeting is not convened, the plaintiff, as the defendant's supervisor, may, in accordance with the Articles of Association, convene and preside at the meeting of the shareholders when the Executive Director fails to perform his duties, and the plaintiff has never discharged that authority, indicating that it has not exhausted the means of relief as it claims. Moreover, the defendant did not appear in the management of the case that the plaintiff said could not survive. The company has the necessary organizational structure, staff, for the company's major industrial area development projects, has also completed the design, survey, environmental assessment and other prophase work, if the plaintiff, the third person with a positive attitude, their respective effective implementation of shareholder rights and obligations, the situation of the stagnation of project development should be improved. On the contrary, if hastily dissolved the company, two plots land project will be forced to stop operation, in the case of no one to take over, two land use rights will face the threat of free resumption by the government, seriously affecting the interests of the company. It is still too early to dissolve the company, as the judicial advocate maximizes the viability of the company, while the defendant land project is still in progress and the gap between the shareholders is likely to improve. In summary, the plaintiff Yang, the defendant in Ningbo, a real estate company and a third person in Ningbo City, the company's operation and management process, each has a certain fault, take the negative approach to dissolve the company, will only make the contradictions more confrontation. At present, the company and the shareholders of the company only actively strive to improve and even eliminate mutual estrangement, and seek a way out, is to achieve mutual win. In addition, the plaintiff Yang, as a small shareholder of the company, if its legitimate rights and interests are damaged, can also be legally through other channels to seek corresponding relief.

 

【Case Review】

There is a certain contradiction between shareholders, whether the company will inevitably lead to dissolution?

Under the current 182th of the company law, the Court decree that the dissolution of the Company shall meet four elements at the same time: first, the plaintiff shareholders must hold the total voting rights of all the shareholders more than 10%; second, the company's management has serious difficulties; third, the continuation of the existence of shareholders will be a major loss of interest; Among them, "the company manages the management to take place the serious difficulty" as the core element.

The guiding case issued by the Supreme People's Court No. 8th, "Lin Fangqing v. Changshu Gloria Industrial Co., Ltd., Di Xiaoming Company dissolved dispute case" established the following main points: to judge "whether the company's business management has serious difficulties", should be a comprehensive analysis of the running state of the company's organizational structure. If the shareholders ' meeting mechanism has a long time failure, the internal management has the serious obstacle, has the deadlock condition, may decide for the company management to take place serious difficulty. The people's court may decide the dissolution of the company according to law in accordance with other conditions stipulated in the judicial interpretation. That is, how to identify the "serious difficulties in the management of the company" in the judicial dissolution of the company, the Supreme Court has determined the referee rules with the core factor of "People's combination obstacle".

When the shareholders filed a lawsuit to dissolve the company, it is difficult for the court to discuss the company does not exist "human obstacles", but the existence of "human combination barrier" does not necessarily lead to the dissolution of the company. The first article of "Explanation of company Law" stipulates four kinds of causes of "serious difficulty in business management": (a) The company has been unable to convene a shareholder meeting or a general meeting for more than two years, and the company's business management has been seriously difficult; Lasting more than two years can not make effective shareholder meeting or general meeting resolution, the company's business management has serious difficulties; (iii) the company chairman of the conflict, and can not be resolved through the shareholders meeting or shareholders meeting, the company's business management has serious difficulties; (iv) Other serious difficulties in management A situation in which a company's continued existence can cause significant loss of shareholder interest. Only one of the above four reasons can determine the existence of the company's "human-combination barrier."

In combination with this case, the third person as a controlling shareholder (70% per cent), the shareholding has exceeded Two-thirds, according to the statute of the defendant and the provisions of the company law, can form an effective shareholder meeting resolution; The third person and the plaintiff held several shareholder meetings for the land Mortgage and the project development, and formed the corresponding shareholder meeting resolution and the Minutes; The defendant has the necessary organization structure, the staff, the company main project preliminary work also has completed, therefore the defendant does not appear the shareholder deadlock, does not belong to "the company manages the management to have the serious difficulty". From the company's survival and dissolution of two separate directions, the dissolution will increase the defendant project land by the Government free resumption of the risk, and survival is more beneficial to shareholders. At the same time, the plaintiff has not exhausted other means of relief, and has failed to fulfill the duties of supervisor. In summary, the defendant does not exist the cause of dissolution.

Although the defendant in this case has some obstacles of human combination, however, by analyzing the constituent elements of the system of judicial dissolution of the company and taking into account the interests of the company and the shareholders, the agent demonstrates the legitimacy and rationality of the company's continued existence, and the facts and reasons expounded are adopted by the Court, which effectively defends the interests of the company and the shareholders.

 

【Conclusion and suggestion】

How to protect the interests of small shareholders, avoid the abuse of corporate control by large shareholders and even damage the interests of small shareholders, has always been a difficult problem in the corporate governance structure. If the company deadlock, the small shareholder can bring up the shareholder's right to know dispute, the company resolution dispute, the company surplus distribution dispute, the request company buys the stock dispute, damages the shareholder benefit responsibility dispute lawsuit to defend own benefit. The judicial compulsory dissolution of the company belongs to the most stringent measures of judicial intervention in the corporate governance system, whose direct consequence is the disappearance of the company main body. Therefore, the law has strict stipulation to the constituent element of the company dissolution lawsuit, requires the small shareholder before bringing up the dissolution company lawsuit, should exhaustion other relief way first.

When the small shareholders exhausted other remedies, they could not defend their own interests, so they could bring up the lawsuit to dissolve the company, and strive for the profit maximization as bargaining chips. The court in dealing with the dissolution of the dispute, the general will first mediate, in the process, the plaintiff may put forward their own corporate governance claims or equity transfer to the price, if there is a risk of judicial dissolution of the company, large shareholders will usually carefully consider the plaintiff's appeal.

Large shareholders in possession of equity 51% is still not enough to avoid the risk of judicial dissolution of the company, as far as possible to obtain more than two-thirds equity or in the Charter of special provisions or special voting rights, in order to avoid the company's organizational structure of the operation of failure, the formation of a company deadlock.

BONING CASE