Corporate Litigation Study... Corporate litigation rules of the company's capital reduction dispute.

Foreword The company's capital reduction dispute refers to the civil dispute caused by the company's reduction of registered capital in violation of legal procedures and conditions, which harms the interests of the company's shareholders or creditors. Capital reduction disputes are mainly divided into several categories: 1. Company shareholders file a lawsuit to confirm that the company's capital reduction is invalid or cancel the company's capital reduction resolution, which belongs to the company resolution dispute in the company dispute; 2. Company creditors file a lawsuit to require the company to pay off its debts or provide corresponding guarantee, which belongs to other disputes in the commercial field; 3. Due to the illegal capital reduction procedure, the company's creditors sued the capital reduction shareholders to assume supplementary liability for the company's debts within the scope of the capital reduction, and this type of dispute is a typical capital reduction dispute. By combing the relevant laws, supplemented by typical cases, this paper tries to clarify the relevant legal provisions and judicial rules for reference. 1. related regulations (I) related laws 1. the People's Republic of China Civil Procedure Law Article 26 Litigation arising from disputes over the establishment of a company, confirmation of shareholder qualifications, distribution of profits, dissolution, etc., shall be under the jurisdiction of the people's court of the place where the company is domiciled. 2. Company Law of the People's Republic of China Article 177 When a company needs to reduce its registered capital, it must prepare a balance sheet and an inventory of its property. The company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make a public announcement in the newspaper within 30 days. The creditor shall have the right to require the company to pay off its debts or provide corresponding guarantee within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if the notice is not received. (II) judicial interpretation 1. Circular of the Supreme People's Court of China, on Printing and Issuing the Revised Provisions on the Cause of Action in Civil Cases (2011) 21. Disputes related to the company 281. Company capital reduction dispute 2. Interpretation of the Supreme People's Court on the Application of the the People's Republic of China Civil Procedure Law Article 3 The domicile of a citizen refers to the place where the citizen's household registration is located, and the domicile of a legal person or other organization refers to the place where the main office of the legal person or other organization is located. If the location of the principal office of a legal person or other organization cannot be determined, the place of registration or registration of the legal person or other organization shall be the place of domicile. Article 22 Jurisdiction shall be determined in accordance with the provisions of Article 26 of the Civil Procedure Law for lawsuits arising from disputes over records in the register of shareholders, requests for changes in company registration, shareholders' right to know, company resolutions, company mergers, company division, company capital reduction, company capital increase, etc. 3. (III) of the Provisions of the Supreme People's Court on Several Issues concerning the Application of the the People's Republic of China Company Law Article 13 If a shareholder fails to perform or fails to fully perform its capital contribution obligations, and the company or other shareholders request it to fully perform its capital contribution obligations to the company in accordance with the law, the people's court shall support it. If the creditors of the company request that the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations shall bear supplementary compensation liability for the part of the company's debts that cannot be paid off within the scope of the principal and interest of the unfunded capital contribution, the people's court shall support it; the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations have already undertaken the above-mentioned responsibilities, and other creditors make the same request, the people's court shall not support it. If a shareholder fails to perform or fails to fully perform the obligation of capital contribution at the time of the establishment of the company, and the plaintiff who files a lawsuit in accordance with the first or second paragraph of this article requests the promoter of the company and the defendant shareholder to bear joint and several liability, the people's court shall support it; after the promoter of the company assumes responsibility, it may recover compensation from the defendant shareholder. If a shareholder fails to perform or fully perform the obligation of capital contribution when the company increases its capital, the plaintiff who files a lawsuit in accordance with the first or second paragraph of this article requests that the directors and senior managers who have not paid their capital contribution bear the corresponding responsibilities for failing to fulfill the obligations stipulated in the first paragraph of Article 147 of the company law, The people's court shall support it; after the directors and senior managers bear the responsibility, they may recover compensation from the defendant shareholders. Article 14 Where a shareholder withdraws his capital contribution, the people's court shall support the request of the company or other shareholders to return the principal and interest of the capital contribution to the company, and other shareholders, directors, senior managers or actual controllers who assist in the withdrawal of capital contribution shall bear joint and several liability for this. The people's court shall support the shareholders who request the withdrawal of capital contributions to bear supplementary liability for the unpayable part of the company's debts within the scope of the principal and interest of the withdrawal of capital contributions, and other shareholders, directors, senior managers or actual controllers who assist in the withdrawal of capital contributions shall bear joint and several liability for this. The people's court shall not support the shareholders who have already assumed the above-mentioned responsibilities and other creditors make the same request. Minutes of the (III) National Civil and Commercial Trial Conference Notice of the Supreme People's Court on Issuing the Minutes of the National Courts Conference on Civil and Commercial Trials (Law [2019] No. 254) 2. on the trial of company dispute cases (I) on the validity and performance of the "gambling agreement". 5. ["Gambling" with the target company] If the "gambling agreement" concluded between the investor and the target company does not have any statutory reasons for invalidity, if the target company claims that the "gambling agreement" is invalid only on the grounds of the existence of equity repurchase or monetary compensation agreement, the people's court will not support it, but the investor claims that it is actually performed, the people's court shall examine whether it complies with the mandatory provisions of the Company Law on "shareholders shall not withdraw their capital contributions" and share repurchase, and whether the judgment supports their claims. If the investor requests the target company to buy back its shares, the people's court shall examine it in accordance with the mandatory provisions of Article 35 of the Company Law on "shareholders may not withdraw their capital contributions" or Article 142 on share repurchase. After examination, if the target company has not completed the capital reduction procedure, the people's court shall reject its claim. If the investor requests the target company to assume the obligation of monetary compensation, the people's court shall conduct a review in accordance with the mandatory provisions of Article 35 of the Company Law on "shareholders may not withdraw their capital contributions" and Article 166 on profit distribution. If, after examination, the target company has no profit or is not profitable enough to compensate the investor, the people's court shall reject or partially support its claim. In the future, when the target company has profits, the investor may also file a separate lawsuit based on that fact. Provisions issued by regional courts in (IV) 1. Guiding Opinions of the Higher People's Court of Jiangxi Province on Several Issues Concerning the Trial of Cases of Company Disputes (2008 No. 4) On the Dispute of 2. Shareholder's Capital Contribution 12. When the company is established, if the promoter falsely contributes capital, the other promoters shall bear joint and several liability for the payment. This liability is not waived by the transfer of equity by other promoters. If a shareholder withdraws his capital contribution, the shareholders, directors, managers and other senior management personnel who help to withdraw their capital contribution shall be jointly and severally liable. When the company increases its capital, if the shareholders make false capital contributions, the responsible shareholders, directors, managers and other senior managers shall bear joint and several liability. After the responsible person stipulated in the above three paragraphs has assumed responsibility, he may recover the compensation from the promoter or shareholder of the defective capital contribution, or he may demand from other jointly and severally responsible persons to pay off his share. 18. If the company fails to notify the creditors in accordance with the provisions of Article 178 of the Company Law, or fails to pay off the debts or provide corresponding guarantees in accordance with the requirements of the creditors, the company's creditors may require the shareholders to recover their respective capital contributions. Within the scope of the company's debts before the capital reduction, it shall jointly and severally bear supplementary liability for compensation. 2. Guidelines for the Judgment of the Second Civil Division of the Higher People's Court of Guangxi Zhuang Autonomous Region on Several Issues Concerning the Trial of Company Dispute Cases (Guigao Fa Min II [2020] No. 19) The effectiveness of the capital system of 1. companies. 2. [Capital Maintenance in Shareholder Withdrawal] Shareholder withdrawal involves the withdrawal of capital contribution and further the reduction of the company's capital. Therefore, based on the protection of creditors' interests, the company's capital system places certain restrictions on shareholder withdrawal:(1) Shareholders agree to withdraw their shares through the resolution of the company's shareholders' meeting, or withdraw their shares through claiming the right of repurchase of dissenting shareholders (Article 74 of the Company Law), the interests of creditors of the company shall be protected through legal capital reduction procedures (Article 177 of the Company Law);(2) If shareholders withdraw their shares through dissolution of the company, they shall protect the interests of creditors of the company through legal liquidation procedures (Article 183 of the Company Law);(3) Shareholders withdraw from the company by transferring all their shares, which does not involve the reduction of the company's capital and is not subject to the company's capital control, however, if the transferring shareholder transfers the equity without making a full capital contribution, he still bears the obligation to make up the capital contribution (Article 18 of Interpretation III of the Company Law). 2. the legal effect of the articles of association Review of the validity of 9. gambling agreements. 45. [Nature of Repurchase Clause] If the gambling agreement mode is adopted in the equity transfer transaction, the repurchase clause is usually set to withdraw the investment, I .e. to recover the "loan" or "financing fund". The people's court shall conduct a review at the level of the company's capital system, I .e. whether the repurchase complies with the statutory capital reduction procedure, so as to ensure that the interests of all parties behind the withdrawal of capital contribution or recovery of "financing fund" are fairly protected. However, if the investor requests the target company to repurchase its shares and at the same time appeals to the target company to perform the capital reduction procedure, the people's court will not support it because the company's capital reduction procedure is a matter of corporate autonomy and the judiciary will not intervene. Overview of 2. Litigation Plaintiff: Creditor Defendant: All or part of the shareholders (according to: Articles 13 and 14 of the (III) on Several Issues Concerning the Application of the the People's Republic of China Company Law of the People's Republic of China by the Supreme People's Court) Jurisdiction: under the jurisdiction of the people's court of the company's domicile (based on Article 26 of the Civil Procedure Law and Article 22 of the Interpretation of the Supreme People's Court on the Application of the the People's Republic of China Civil Procedure Law) Litigation request: 1. Request to order the defendant x x x to bear supplementary liability for the part of x x company's debt that cannot be paid off by the plaintiff within the scope of the capital reduction of x x yuan; 2, the case acceptance fee, preservation fee and other litigation costs are borne by the defendant. 3. Disputes and Judgment Rules (I) Controversial Question 1: Is the nature of capital reduction in violation of legal procedures equivalent to the withdrawal of capital contributions? Are shareholders liable for the withdrawal of capital contributions? The judgment case of Shanghai Delixi Group Co., Ltd. v. Jiangsu Boenshitong High-tech Co., Ltd., Feng Jun and Shanghai Boenshitong Optics Co., Ltd. in the 11th issue of the Bulletin of the Supreme People's Court in 2017 equated the nature of illegal capital reduction with the withdrawal of capital contribution. The Supreme Court heard the dispute over the loan contract between Anhui Xinji Coal and Electricity (Group) Co., Ltd., Rudong County Rural Credit Cooperative Association and Shanghai Hengde Zhidi Co., Ltd. [(2010) Min Ti Zi No. 79], the Supreme Court clearly put forward this point of view for the first time. There are different views that illegal capital reduction is equivalent to the nature of capital withdrawal, which will inappropriately expand the scope of liability, and will extend the scope of liability to other shareholders, directors, senior managers or actual controllers who assist in the withdrawal of capital, and will improperly amplify the "harmfulness" of illegal capital reduction, Because in civil cases, it may involve the crime of withdrawing capital in criminal cases. Case 1: Shanghai Delixi Group Co., Ltd. v. Jiangsu Boen Shitong High-tech Co., Ltd., Feng Jun and Shanghai Boen Shitong Optics Co., Ltd. Case of Dispute over Purchase and Sales Contracts [Supreme Court Gazette Case 2016 Hu 02 Min Zhong No. 10330]] The court held that the shareholders of Jiangsu Boen Company formed resolutions of the shareholders' meeting on August 10 and September 27, 2012 on the reduction of the company's capital. At this time, the creditor's rights of Delixi Company had already been formed. As shareholders of Jiangsu Boen Company, Shanghai Boen Company and Feng Jun should know clearly. However, in this case, Shanghai Boen Company and Feng Jun still agreed to Feng Jun's request for capital reduction through the resolution of the shareholders' meeting, and did not directly notify Delixi Company, which not only damaged the solvency of Jiangsu Boen Company, but also infringed on the claims of Delixi Company, and should bear corresponding legal liability for the debts of Jiangsu Boen Company. When the company fails to notify known creditors of a capital reduction, the situation is not essentially different from the substance of the shareholder's illegal withdrawal of capital and the effect on the damage to the creditors' interests. Therefore, although our law does not specify the liability of shareholders in the event of damage to the interests of creditors as a result of a company's failure to comply with the statutory procedures for capital reduction, it can be determined by reference to the relevant principles and provisions of the company law. Due to the defects in the capital reduction behavior of Jiangsu Boen Company, the company's claims formed before the capital reduction cannot be paid off after the capital reduction, Shanghai Boen Company and Feng Jun, as shareholders of Jiangsu Boen Company, shall bear supplementary liability for the non-payment of the debts of Jiangsu Boen Company within the scope of the amount of the company's capital reduction. Case 2: Dispute over Loan Contract between Anhui Xinji Coal and Electricity (Group) Co., Ltd. and Rudong County Rural Credit Cooperative Association and Shanghai Hengde Real Estate Co., Ltd. [(Supreme People's Court (2010) Min ti Zi No. 79)]] The court held that: therefore, the withdrawal of the coal power company from Hengde company violated the legal procedure of capital reduction, which should be recognized as the name of capital reduction, which is actually the nature of capital withdrawal, and the coal power company should bear joint and several liability for the guaranteed debts of Hengde company within the scope of its capital contribution of 25 million yuan. Case 3: Xiangtan Dahan Iron and Steel Trading Co., Ltd. and Hu Zhi and Liang Shuai Company's Capital Reduction Dispute heard by Xiangtan Intermediate People's Court [(2014) Tan Zhongmin Erchu Zi No. 20]] The court held that: Jinrong Company did not notify the known creditor Dahan Company when reducing its capital, resulting in Dahan Company not knowing about its capital reduction, nor could it ask it to pay off its debts or provide guarantees in advance, the capital reduction procedure was flawed and had no legal effect on Dahan Company. Although the company law stipulates that the notice obligor when the company is reducing its capital is the company, the company's capital reduction is the result of the resolution of the shareholders' meeting, and whether and how to reduce the capital depends entirely on the will of the shareholders. As the shareholders of Jinrong Company, Hu Zhi and Liang Shuai still reduced the company's registered capital through the resolution of the shareholders' meeting even though they knew that the company's external liabilities had not been paid off. Subjectively, there was a fault, which objectively damaged the solvency of Jinrong Company and endangered the realization of the creditor's rights of Dahan Company. In essence, it caused the same consequences as the withdrawal of capital contribution, therefore, we should refer to the second paragraph of Article 14 of the "(III) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Law". The people's court shall support the shareholders who request the company's creditors to withdraw their capital contributions to bear supplementary compensation for the unpayable part of the company's debts within the scope of the principal and interest of the withdrawal of capital contributions, and other shareholders, directors, senior managers or actual controllers who assist in withdrawing capital contributions shall bear joint and several liability for this; the shareholders who have withdrawn their capital contributions have already assumed the above-mentioned responsibilities. If other creditors make the same request, the people's court will not support the "treatment, I .e. the defendants Hu Zhi and Liang Shuai shall, within the scope of capital reduction, bear supplementary compensation liability for the payment obligations of Jin Rong Company as determined in the civil mediation document No. 43 of Tanzhong Min Er Chu Zi of our hospital (2012). Case 4: Cai Ruixian et al. v. Shanghai Yongdian Garment Technology Co., Ltd. Shareholder's Capital Contribution Dispute [(2014) Hu Yi Zhong Min Si (Shang) Zhong Zi No. 462]] The court held that, according to the provisions of the current company law, shareholders have the obligation to effectively perform their capital contributions in accordance with the articles of association of the company, and at the same time have the responsibility to maintain the company's registered capital. The company's capital reduction should be subject to legal procedures in accordance with the law to ensure that the company's creditors have the opportunity to make corresponding decisions before the company's assets are reduced.

2021-12-20

Zhongcheng Qingtai. Real estate perspective: how to judge the nature of developers to promote school district housing behavior?

1. issues raised In order to improve the subsidiary value and attractiveness of the development of real estate, more and more developers choose to take "XX school district housing" and "gathering XX school" as the highlights of house sales promotion. However, the general commercial housing is mostly short-term housing, and the supporting construction is not synchronized with the delivery of housing, there is the possibility that the school district will fail or be inconsistent with the publicity. Article 473, paragraph 2, of the Civil Code clearly states that "commercial advertisements and publicity that meet the conditions for an offer constitute an offer." Does the developer's behavior of publicizing the school district housing constitute an offer? Does the publicized school have any influence on determining whether the developer constitutes a breach of contract within the scope of the commercial housing development plan? How should the developer and consumers avoid the possible risks brought by the school district housing publicity? 2.-related views and cases, refereeing views (I) the developer's publicity on the school district housing has a significant impact on whether the buyer enters into a commercial housing sales contract with him. The publicity color page should be regarded as the content of the contract and is binding on both parties to the contract. The house involved in the case is not in the school district, which is inconsistent with the contract agreement, resulting in the buyer's contract purpose cannot be realized, and the buyer can request to terminate the contract. Case: Cheng Juan and Chen Baoyin's Dispute over Housing Sales Contract (Heze Intermediate People's Court (2020) Lu 17 Civil Judgment No. 1331) The court held that the focus of the dispute in this case is whether the contract for the sale of the house involved should be terminated. First of all, Article 3 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Commercial Housing Sales Contract Disputes" stipulates: "Commercial housing sales advertisements and promotional materials are invitations to offer, but the seller's housing and related within the scope of the commercial housing development plan If the explanation and promise made by the facility are specifically determined, and have a significant impact on the conclusion of the commercial housing sales contract and the determination of the housing price, it shall be regarded as an offer. Even if the statement and promise are not included in the contract for the sale of commercial housing, they shall be regarded as the content of the contract, and if the parties violate it, they shall bear the liability for breach of contract." The publicity color page of the appellant Hejian Real Estate Company clearly indicates the words "live in Hejian Zijun City and study in Boyu Middle School". Dong Bowen, the daughter of the appellant Cheng Juan, is in high school. Such publicity by the appellant Hejian Real Estate Company has a significant impact on whether Cheng Juan and Chen Baoyin enter into a commercial housing sales contract with them. Therefore, the publicity color page should be regarded as the content of the contract and binding on both parties to the contract. At present, the house involved in the case is not in the enrollment area of Boyu Middle School in Cao County, which is inconsistent with the contract agreement. As a result, the contract purpose of Cheng Juan and Chen Baoyin cannot be realized. Therefore, the appellants Cheng Juan and Chen Baoyin's request to terminate the commercial housing sales contract involved in the case is based on the law, and the court supports it. If the description and promise made by the (II) developer on the housing and related facilities within the scope of the commercial housing development plan are specifically determined, and have a significant impact on the conclusion of the commercial housing sales contract and the determination of the housing price, it shall be regarded as an offer, even if it is not included in the commercial housing sales contract, It should also be regarded as the content of the contract. Case: Wang Xinxin, Liu Shangneng and Suzhou New High Land Co., Ltd. Commercial Housing Sales Contract Dispute (Jiangsu Suzhou huqiu district People's Court (2018) Su 0505 Minchu No. 3012 Civil Judgment) The court held that:... the defendant repeatedly mentioned "double school district", "the third middle school of the new district and the experimental middle school of science and technology city", "double school district guarantee", "easy to choose a house but difficult to choose a school", "double school district, experimental middle school" and other contents in the pavement and billboards, website publicity materials and WeChat promotion platform of Hongjinwan real estate, according to the above sales advertisements and publicity materials, ordinary buyers can naturally draw the conclusion that the house involved in the case belongs to the school district of Science and Technology City Experimental Middle School (Science and Technology City Branch of New District Experimental Middle School) and their children can study in the school, which will have an important impact on whether to buy the house involved in the case and the determination of the price of the house involved. Therefore, it should be regarded as an offer, even if both parties fail to include the defendant's publicity and promise about the school district in the Commercial Housing Purchase Contract. However, this content shall also be an integral part of the contract and both parties shall be bound by it. According to the relevant documents of the education department of Suzhou City and the High-tech Zone on the division of the school district, the house involved does not belong to the school district of the New District Experimental Middle School Science and Technology City Branch, but belongs to the school district of the New District No. 3 Middle School, so the defendant violated the contract and constituted a breach of contract., Should bear the liability for breach of contract. Real estate belongs to the family's large property, its primary function is to live. Buyers who buy houses in order to choose school districts are different from ordinary buyers. They have reason to believe that they have a deeper understanding of local school district policies, and they should be more cautious than ordinary buyers. Therefore, the choice of the school district is not the contractual purpose of the contract for the sale of the house in this case, and the plaintiff made the decision to purchase the house involved due to negligence and recklessness, and he himself was quite at fault. In view of the fact that the plaintiff did not provide any evidence to prove the price difference between the house involved in the case and the surrounding non-key school district houses in the same location and the same quality at the time of purchase, and the appraisal application for similar cases in the same district was also returned due to the incomparable sample, there is no evidence to prove the loss of the house price difference claimed by the plaintiff. However, the defendant's improper publicity constituted a breach of contract, which caused the dispute in this case. The court considered the fault degree of both parties and the performance of the contract, and decided to compensate the plaintiff for the loss of 10000 yuan. As for the agreement between the two parties in annex 5 to the contract: article 2 of the supplementary agreement to the contract, the court believes that the above agreement, as a standard clause provided by the seller, does not formally prompt and explain the plaintiff in a way sufficient to attract the attention of the buyer. the content excludes the buyer's main rights and exempts itself from its own obligations, thus it is invalid. (III) the school is outside the scope of the housing development plan involved in the case, the supplementary agreement clearly stipulates that the promotion of commercial housing does not constitute a contract offer, the buyer fully understands the terms of the contract when the contract is signed, and the developer does not constitute a breach of contract. Case: Li Shougang's Dispute over Commercial Housing Sales Contract with Jinan Yuantai Real Estate Co., Ltd. and Shandong Beida Resources Real Estate Co., Ltd. (Jinan Intermediate People's Court (2017) Lu 01 Min Zhong No. 5484 Civil Judgment) The court held that the "Notice" issued by Peking University Resources Company... was not included in the commercial housing sales contract, and the seventh paragraph of Article 17 of the contract stipulates that "the sand table, model, model room, publicity materials and publicity advertisements displayed by the seller are only for promotion indication, and do not constitute any offer. All agreements in this contract shall prevail, and the delivery entity shall prevail if there is no agreement in this contract", therefore, the contents of the above notice cannot be regarded as the contents of the contract. Article 3 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Contracts for the Sale of Commercial Housing stipulates that ...... the "housing and related facilities" referred to in this provision are "within the scope of the planning for the development of commercial housing", while the school referred to in the Notice does not fall within the scope of the planning for the development of the housing involved, so the provisions of the judicial interpretation cannot be applied to this case. In the case that the content of the school district housing in the "Notice" was not included in the commercial housing sales contract, Li Shougang claimed the relevant liability for breach of contract based on the content. There was no basis in the law, and the first instance did not support it, which was not improper. (IV) the school has changed due to planning adjustment, it is still equipped with corresponding educational resources. The occurrence of this fact is related to the corresponding planning adjustment of the local government. The developer's publicity about the school district housing is not false publicity and does not constitute a breach of contract. Case: Wu Kouzhu, Miao Yamin and Ocean Real Estate Zhenjiang Co., Ltd. Commercial Housing Sales Contract Dispute (Jiangsu Higher People's Court (2017) Su Minshen No. 957 Civil Judgment) The court held that there was a primary school originally planned in the third phase plot of Sino-Ocean Company, but according to the planning adjustment of Zhenjiang City Planning Committee, it was decided that the primary school and the junior high school reserved in the resettlement house on the east side of the third phase plot of Sino-Ocean Company should be merged into a nine-year consistent school. ... Even if it is confirmed that the introduction of the propaganda of Runzhou Experimental Primary School by Ocean Company is indeed an offer, the original primary school is changed to a nine-year consistent school due to planning adjustment, and the teachers are arranged by the Education Bureau of Runzhou District, Zhenjiang Experimental School and Runzhou Experimental Primary School as a whole, and they are still equipped with corresponding educational resources, and the school actually built is changed from a primary school to a nine-year consistent school, which is related to a consistent school. Therefore, the 1. Court of Second Instance did not support Wu Kaozhu and Miao Yamin's claim that the Ocean Company "introduced Runzhou Experimental Primary School" as false propaganda, which constituted a breach of contract and also constituted fraud. 3. Summary Article 472 of the Civil Code provides for the definition and constituent elements of an offer, and article 473, paragraph 2, provides that "if the content of commercial advertisements and publicity meets the conditions of an offer, it constitutes an offer." Article 3 of the interpretation of the Supreme People's Court on Several Issues concerning the application of law in the trial of disputes over commercial housing sales contracts stipulates that "the sales advertisements and publicity materials of commercial housing are invitation to offer, but the seller's explanation and promise on the housing and related facilities within the scope of the commercial housing development plan are specifically determined, and have a significant impact on the conclusion of the commercial housing sales contract and the determination of the housing price, It constitutes an offer. The statement and promise, even if it is not included in the contract for the sale of commercial housing, shall be the content of the contract, and if the parties violate it, they shall bear the liability for breach of contract." Whether the developer's behavior of publicizing the school district housing constitutes an offer is the key to judging whether the developer is in breach of contract and whether the contract for the sale of commercial housing can be terminated. One point of view is that commercial housing and related facilities generally include commercial housing itself and the supporting infrastructure and public buildings of commercial housing. Schools are not within the scope of commercial housing development planning. Supporting schools are decided by the local government's corresponding planning and adjustment, and are not based on the will of the developer. The relevant commercial housing sales contract also clearly stipulates that the content of the contract shall prevail. There is no guarantee about the school in the contract. The publicity of the school district housing cannot constitute an offer, there is no possibility of default by the developer; however, if the school is indeed within the scope of the commercial housing development plan, the school advertised by the developer does not exist or is different from the school actually attended, there is a risk of being identified as an offer and constituting a default. Another point of view is that there are transportation, schools, hospitals and other supporting facilities around the house, and the school should belong to the relevant facilities within the scope of the commercial housing development plan. The promise made by the publicity is clear and definite, and the publicity of xx school has an important impact on whether the buyers conclude the commercial housing sales contract and the determination of the housing price. The publicity of the school district housing constitutes an offer, and the failure or change of the school district leads to the developer to breach of contract, should bear the liability for compensation, the circumstances are serious so that the buyer can not achieve the purpose of school may have the risk of termination of the contract. In practice, local courts have slightly different criteria for judging whether the developer's publicity of the school district house constitutes an offer, which needs to be judged in combination with the actual situation of the case. Even if most courts determine that the developer's publicity of the school district house constitutes an offer, the inconsistency between the school and the publicity when the house is actually delivered constitutes a breach of contract. In most cases, the breach of contract has not reached the level of termination of the contract, but the developer should bear certain liability. 4. Risk Alert Our lawyers believe that developers should raise their risk awareness when promoting commercial housing, carefully carry out advertising activities, avoid misleading publicity, and clearly mark the behavior as an invitation to offer in publicity materials such as leaflets and advertising walls, and the actual commercial housing sales contract signed by both parties shall prevail. In addition, because the commercial housing sales contract is a standard contract provided by the developer, there is a risk that individual clauses will be recognized as standard clauses, the important terms can be prompted and explained in a way that is sufficient to attract the attention of the buyer, and the buyer can be fully explained when signing the contract, and it is clear that "if the agreement in the commercial housing sales contract is inconsistent with the advertising agreement, the agreement in the sales contract shall prevail". As an important asset of the family, consumers should exercise prudent care when buying a house, have an in-depth understanding of the local school district policy, and avoid taking losses due to negligence and rash decisions to buy a house.

2021-12-20

Viewpoint | Analysis of the reliability of patent protection

It is generally believed that the value of patent rights includes legal value, technical value and economic value. The reliability of patent protection is an important index to evaluate and analyze the legal value of patent. The so-called reliability of patent protection refers to the reliability of the patentee or patent user in the face of the suspected infringing object, using the current infringement determination rules to determine whether the suspected infringing object falls into the scope of specific patent protection. Through the analysis of the stability of the specific patent itself and the restriction degree of the following patent, the probability of a specific patent winning a patent infringement lawsuit is judged. This paper will start with the writing quality of the claims and instructions to analyze the reliability of patent protection, so it is only applicable to inventions or utility models, not design. The author thinks that the reliability of patent protection can be analyzed comprehensively from the five dimensions of patent category, patent text quality, restriction degree of implementation, restriction degree of following patent and stability, so as to draw a more objective expectation judgment on whether infringement is established in patent infringement litigation. 1. patent category According to China's current patent examination and authorization rules, utility model patents can be authorized only through formal examination, while invention patents can only be authorized after passing formal examination and passing substantive examination. Therefore, the stability of a particular patent can be judged by the type of patent and the nature of the invention, and it is clear that the stability of the invention patent is higher than that of the utility model patent. In addition, starting with the layout of the claims, the independent claim is a product claim and has more subordinate claims, which is better than only one product claim, and then better than only the method claim. 2. patent text quality The consideration of the quality of the patent text should include at least the following three aspects: first, the writing quality of the independent claims; second, the layout and writing quality of the dependent claims; third, the clarity and completeness of the patent specification and the support for the claims. An ideal authorized patent should meet all the following conditions:(1) the patent specification provides a clear and complete description of the invention and creation, and the embodiments are specific, to the extent that can be realized by those skilled in the art in combination with the accompanying drawings;(2) The independent claims are supported by the specification, with clear expressions and appropriate generalizations;(3) The subordinate claims are reasonably arranged and have a considerable number of subordinate claims;(4) There is no case where the amendment provided for in Article 33 of the Patent Law exceeds the scope. Obviously, if a patent deviates more and more negatively from the above conditions, the text quality will be worse. Constraints on 3. implementation The purpose of this indicator is to analyze whether a specific patented technical solution falls within the scope of protection of the prior patent, and if so, the implementation of the specific patent requires the permission of the prior patentee, otherwise the prior patent will be infringed. In the specific judgment method, after searching, compare a particular patent with a closest prior patent, determine the degree of overlap with the prior patent independent claim, and determine whether the two constitute equivalent if there is a difference in technical characteristics. Obviously, if there is a substantial difference between a particular patent and the nearest prior patent, and the technical characteristics of the independent claim are significantly different, then the particular patent can be implemented independently and is not subject to the surviving patent, which is the best. If a particular patent is subject to a prior patent, but the prior patent clearly has a flaw that has been declared invalid or if the particular patent has room to avoid the prior patent, it is an intermediate result. If a particular patent falls within the scope of prior patent protection and lacks substantive characteristics relative to the prior patent, it is a poor result. 4. degree of restriction on following patents This indicator is used to determine the degree of restriction of a particular patent on the implementation of a subsequent follow-up improvement technology, I .e., the probability of a subsequent follow-up technology avoiding a particular patent infringement. In the specific method, compare the specific patent with the following patent, and analyze whether the specific patent can effectively restrict the independent implementation of the following patent relative to the specific patent. Obviously, it is best if the follow-up patent is not retrieved, or if the follow-up patent falls unquestionably within the scope of protection of a particular patent. If, although there are different technical characteristics between the following patent and the specific patent, there is no substantial difference, that is, the following patent has a high probability of falling into the scope of protection of the specific patent, is also a better result. If the follow-up patent does not fall within the scope of protection of the particular patent, I .e. the follow-up patent can be implemented freely without the restriction of the particular patent, then the value of the particular patent will be diminished. 5. stability This indicator is used to determine the possibility of invalidation of a particular patent. Compare the specific patent with the existing technology before the filing date, and determine whether the specific patent has the risk of being declared invalid as stipulated in Article 65 of the Regulations of the Patent Law. Under this index system, the stability of patents with more distinguishing technical features is higher than that of patents with less distinguishing technical features. If a particular patent independent claim has more distinguishing technical features that are materially different from the combination of more than one prior art, then the probability of that particular patent being declared invalid is small and optimal. If a particular patent independent claim has few or no distinguishing technical features that differ materially from a combination of prior art within 3 articles, then the probability that the particular patent will be invalidated is high and is a poor result. If a particular patent independent claim has several distinguishing technical features compared with the combination of 3 or so existing technologies, but it is doubtful whether the distinguishing technical feature is a replacement of customary technical means, then the probability of the particular patent being declared invalid is in the middle. To sum up, according to the relevant provisions of China's Patent Law, Detailed Rules for the Implementation of the Patent Law and Patent Examination Guidelines, the author takes the quality of patent text as the main line, combines the characteristics of invention or utility model patents, and discusses the reliability of patent protection from five aspects: patent category, patent text quality, restriction degree of patent implementation, restriction degree of patent to follow patent, and stability of patent, the legal restriction effect of specific patented technology on the related technology in the same technical field is given objectively, and the result probability of infringement litigation is expected. It is generally believed that the value of patent rights includes legal value, technical value and economic value. The reliability of patent protection is an important index to evaluate and analyze the legal value of patent. The so-called reliability of patent protection refers to the reliability of the patentee or patent user in the face of the suspected infringing object, using the current infringement determination rules to determine whether the suspected infringing object falls into the scope of specific patent protection. Through the analysis of the stability of the specific patent itself and the restriction degree of the following patent, the probability of a specific patent winning a patent infringement lawsuit is judged. This paper will start with the writing quality of the claims and instructions to analyze the reliability of patent protection, so it is only applicable to inventions or utility models, not design. The author thinks that the reliability of patent protection can be analyzed comprehensively from the five dimensions of patent category, patent text quality, restriction degree of implementation, restriction degree of following patent and stability, so as to draw a more objective expectation judgment on whether infringement is established in patent infringement litigation. 1. patent category According to China's current patent examination and authorization rules, utility model patents can be authorized only through formal examination, while invention patents can only be authorized after passing formal examination and passing substantive examination. Therefore, the stability of a particular patent can be judged by the type of patent and the nature of the invention, and it is clear that the stability of the invention patent is higher than that of the utility model patent. In addition, starting with the layout of the claims, the independent claim is a product claim and has more subordinate claims, which is better than only one product claim, and then better than only the method claim. 2. patent text quality The consideration of the quality of the patent text should include at least the following three aspects: first, the writing quality of the independent claims; second, the layout and writing quality of the dependent claims; third, the clarity and completeness of the patent specification and the support for the claims. An ideal authorized patent should meet all the following conditions:(1) the patent specification provides a clear and complete description of the invention and creation, and the embodiments are specific, to the extent that can be realized by those skilled in the art in combination with the accompanying drawings;(2) The independent claims are supported by the specification, with clear expressions and appropriate generalizations;(3) The subordinate claims are reasonably arranged and have a considerable number of subordinate claims;(4) There is no case where the amendment provided for in Article 33 of the Patent Law exceeds the scope. Obviously, if a patent deviates more and more negatively from the above conditions, the text quality will be worse. Constraints on 3. implementation The purpose of this indicator is to analyze whether a specific patented technical solution falls within the scope of protection of the prior patent, and if so, the implementation of the specific patent requires the permission of the prior patentee, otherwise the prior patent will be infringed. In the specific judgment method, after searching, compare a particular patent with a closest prior patent, determine the degree of overlap with the prior patent independent claim, and determine whether the two constitute equivalent if there is a difference in technical characteristics. Obviously, if there is a substantial difference between a particular patent and the nearest prior patent, and the technical characteristics of the independent claim are significantly different, then the particular patent can be implemented independently and is not subject to the surviving patent, which is the best. If a particular patent is subject to a prior patent, but the prior patent clearly has a flaw that has been declared invalid or if the particular patent has room to avoid the prior patent, it is an intermediate result. If a particular patent falls within the scope of prior patent protection and lacks substantive characteristics relative to the prior patent, it is a poor result. 4. degree of restriction on following patents This indicator is used to determine the degree of restriction of a particular patent on the implementation of a subsequent follow-up improvement technology, I .e., the probability of a subsequent follow-up technology avoiding a particular patent infringement. In the specific method, compare the specific patent with the following patent, and analyze whether the specific patent can effectively restrict the independent implementation of the following patent relative to the specific patent. Obviously, it is best if the follow-up patent is not retrieved, or if the follow-up patent falls unquestionably within the scope of protection of a particular patent. If, although there are different technical characteristics between the following patent and the specific patent, there is no substantial difference, that is, the following patent has a high probability of falling into the scope of protection of the specific patent, is also a better result. If the follow-up patent does not fall within the scope of protection of the particular patent, I .e. the follow-up patent can be implemented freely without the restriction of the particular patent, then the value of the particular patent will be diminished. 5. stability This indicator is used to determine the possibility of invalidation of a particular patent. Compare the specific patent with the existing technology before the filing date, and determine whether the specific patent has the risk of being declared invalid as stipulated in Article 65 of the Regulations of the Patent Law. Under this index system, the stability of patents with more distinguishing technical features is higher than that of patents with less distinguishing technical features. If a particular patent independent claim has more distinguishing technical features that are materially different from the combination of more than one prior art, then the probability of that particular patent being declared invalid is small and optimal. If a particular patent independent claim has few or no distinguishing technical features that differ materially from a combination of prior art within 3 articles, then the probability that the particular patent will be invalidated is high and is a poor result. If a particular patent independent claim has several distinguishing technical features compared with the combination of 3 or so existing technologies, but it is doubtful whether the distinguishing technical feature is a replacement of customary technical means, then the probability of the particular patent being declared invalid is in the middle. To sum up, according to the relevant provisions of China's Patent Law, Detailed Rules for the Implementation of the Patent Law and Patent Examination Guidelines, the author takes the quality of patent text as the main line, combines the characteristics of invention or utility model patents, and discusses the reliability of patent protection from five aspects: patent category, patent text quality, restriction degree of patent implementation, restriction degree of patent to follow patent, and stability of patent, the legal restriction effect of specific patented technology on the related technology in the same technical field is given objectively, and the result probability of infringement litigation is expected.

2021-12-20

Viewpoint. Whether the applicant can request the setting aside of the arbitral award on the grounds that the arbitral tribunal has not made the arbitral award within the statutory time limit.

The revocation of the arbitral award needs to meet the statutory requirements, and this paper focuses on the analysis of whether the arbitral tribunal's failure to make an arbitral award within the statutory time limit constitutes a violation of the statutory procedure in the arbitral procedure and leads to the revocation of the arbitral award. 1. [link to the law]] the People's Republic of China Arbitration Act Article 58 If the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located to cancel the award. (I) there is no arbitration agreement; The matters awarded by the (II) do not fall within the scope of the arbitration agreement or the arbitration commission does not have the power to arbitrate; (III) the composition of the arbitration tribunal or the arbitration procedure violates the legal procedure; (IV) the evidence on which the award is based is falsified; (V) the opposing party conceals evidence sufficient to affect a just decision; (VI) arbitrators have solicited or accepted bribes, practiced favoritism, or perverted the law in adjudicating the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law Article 20 The term "violation of legal procedures" as stipulated in Article 58 of the Arbitration Law refers to the circumstances in which the violation of the arbitration procedures stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case. 2. Typical Case] Case 1: The case of Company A and Company B applying for setting aside the arbitral award. On November 11, 2019, Chen and Company B filed an application for arbitration in this case to the Beijing Arbitration Commission. The respondent was Company A. After the Beijing Arbitration Commission formally accepted the case on November 18, 2019, it was held on December 31, 2019. Form an arbitration tribunal. In accordance with the arbitral award made on 8 March 2021, the arbitral tribunal of summary proceedings shall, in accordance with the provisions of the Arbitration Rules, make an award within 75 days from the date of the formation of the tribunal. If there are special circumstances that require an extension, the sole arbitrator shall submit it to the Secretary-General for approval, and the extension may be appropriately extended. Company A believes that the arbitration award made by the Arbitration Commission on March 8, 2021 exceeds the above-mentioned time limit, and requests the court to revoke the (2021) Beijing Arbitration Zi No. XXX award made by the Arbitration Commission in accordance with the law. The court held that this case was a case in which the parties applied for the revocation of the domestic arbitration award and should be reviewed in accordance with Article 58 of the the People's Republic of China Arbitration Law. Article 58 of the the People's Republic of China Arbitration Law stipulates that if the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located for cancellation of the award: (1) there is no arbitration agreement; the matters on which the award is (II) do not fall within the scope of the arbitration agreement or the arbitration commission has no power to arbitrate; the composition of the arbitration tribunal or the arbitration procedure violates legal procedure; the evidence on which the (IV) award is based is forged; the other party to the (V) has concealed evidence sufficient to affect the fairness of the award; the (VI) arbitrator has solicited and accepted bribes, practiced favoritism, or perverted the law in the arbitration of the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. The above-mentioned provisions are the statutory reasons for the people's court to revoke the domestic arbitral award. With regard to Company A's claim that the arbitration procedure violates the legal procedure, the Court holds that the "violation of legal procedure" stipulated in Article 58 of the the People's Republic of China Arbitration Law refers to the situation that the violation of the arbitration procedure stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case, and the violation of legal procedure shall seriously affect the procedural rights of the parties and substantially affect the correct award of the case. With regard to the fact that the award involved in the case was heard by a sole arbitrator, the Beijing Arbitration Commission made a clear statement on the matter. In addition, in accordance with Article 54, paragraph (I), and Article 55, paragraph (I), of the Arbitration Rules, the arbitration involved in the case was filed on the basis of the parties' arbitration request, which met the conditions for the application of the summary procedure in the Arbitration Rules, and it was not improper for the sole arbitrator to hear the case. Article 58 of the Arbitration Rules stipulates that if the amount of the dispute in the case exceeds 5 million yuan due to the change of the arbitration request, the summary procedure shall not be affected. Regarding the extension of the trial limit of the arbitration involved in the case, the case was applied by the sole arbitrator and approved by the Secretary-General of the Beijing Arbitration Commission to extend the trial limit, which does not violate the provisions of the Arbitration Rules. In addition, the arbitration tribunal heard all the arbitration requests of Chen Mou and Company B and the defense of Company A, investigated the relevant facts of the case, and organized both parties to provide evidence and cross-examine the evidence. The two parties debated around the focus of the dispute. Before the end of the trial, the two parties issued their final statements. No company A's rights were infringed. Therefore, the court did not support company A's claim. Case 2: The case of Xu and Chen's application to set aside the special procedure of the arbitral award. On September 23, 2009, Xu filed an arbitration application with the Yangzhou Arbitration Commission in accordance with the arbitration clause agreed in the contract, requesting the cancellation of the equity transfer agreement signed on October 16, 2008. The Yangzhou Arbitration Commission accepted Xu's arbitration request on September 24, 2009, and served relevant materials to the respondent Chen. On 26 November 2009, the Tribunal held its first hearing. On 19 and 20 December 2009, the Tribunal held its second session. On January 30, 2010, Xu filed an application for withdrawal from the chief arbitrator Xing. On February 8, 2010, Yangzhou Arbitration Commission made (2009) decision No. 668-1, deciding to reject Xu's application for chief arbitrator Xing to withdraw. On August 23, 2010, Yangzhou Arbitration Commission delivered the decision to Xu and Chen. … On July 5, 2016, Yangzhou Arbitration Commission made Award (2009) Yang Arbitration Zi No. XX, which was served on Xu and Chen on July 27, 2016. Xu later considered that the arbitral award had exceeded the statutory time limit and requested that it be set aside. Court view: on the question of whether the arbitration proceedings are illegal. Article 46 of the Yangzhou Arbitration Rules stipulates: "The arbitral tribunal shall make an arbitral award within four months after the formation of the arbitral tribunal. If there are special circumstances that require an extension, the chief arbitrator or the sole arbitrator may report to the chairman of the arbitration commission for approval, and the extension may be appropriately extended." According to this provision, four months is the time limit that the arbitral tribunal should abide by. Even if it needs to be extended, it should be appropriately extended, and the extended time limit should be specified when handling the application and approval procedures. The arbitral award involved in the case took 6 years and 8 months from the formation of the arbitral tribunal on November 2, 2009 to the service of the arbitral award to the parties on July 27, 2016, far exceeding the four-month period stipulated in the Yangzhou Arbitration Rules. Although the arbitral tribunal applied for an extension of the trial period on the grounds of the complexity of the case, no specific time limit was determined at the time of application and approval, resulting in an extension of the arbitration period for more than six years, a serious departure from the provisions of the Yangzhou Arbitration Rules on the period of award. The arbitration case file also reflects that the arbitration tribunal's trial activities were mainly concentrated before the end of 2010, and the trial activities were basically stagnant from 2011 to 2012, and no trial activities were carried out for more than three years from 2013 to 2015. The applicant Xu has written to the arbitration tribunal many times to request the award as soon as possible, but it was not until July 2016 that the arbitration tribunal made a final award. It is therefore clearly inappropriate for the arbitral tribunal to extend a period sufficient to give the parties reasonable doubt as to the fairness of the arbitral proceedings. The Court needs to emphasize that "to ensure fair and timely arbitration of economic disputes and to protect the legitimate rights and interests of the parties" is the basic legislative purpose of China's arbitration law. As we all know, the procedure design of arbitration system is to achieve the value goal of fair and timely settlement of disputes. This is an important reason why the parties choose arbitration to resolve disputes, and it is also an important basis for the survival and development of the arbitration system. However, the arbitration tribunal in this case did not adjudicate for a long time without legitimate reasons and justifiable reasons, and the arbitration period lasted as long as six years and eight months, resulting in a long-term unstable legal relationship between the parties and unable to obtain timely and effective relief, which seriously damaged the legitimate rights and interests of the parties, the arbitral award involved in the case seriously violates the provisions of Article 51, paragraph 1, of the the People's Republic of China Arbitration Law and Article 42, paragraph 1, and Article 46 of the Yangzhou Arbitration Rules, which may affect the correct award of the case and should be revoked in accordance with the law. Summary of 3. Lawyers From the above cases 1 and 2, it can be seen that failure to make an arbitration award within the prescribed time limit does not constitute a violation of the arbitration procedure stipulated in the third paragraph of Article 58 of the Arbitration Law and a violation of the legal procedure. The "circumstances that may affect the correct award of the case" stipulated in Article 20 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law shall also apply." After comprehensive consideration, if it is necessary to extend the arbitration trial period due to special circumstances such as complex circumstances or epidemic situation, it will not affect the correct award of the case, and the arbitration award cannot be revoked according to this clause. On the contrary, arbitration is an efficient and convenient way to resolve disputes. If the arbitration tribunal does not issue an award for a long time without justifiable and legal reasons, and it will affect the rights of the parties and the correct award of the case, the court may set aside the arbitral award accordingly.

2021-12-20

Corporate Litigation Study... Corporate litigation rules of the company's capital reduction dispute.

Foreword The company's capital reduction dispute refers to the civil dispute caused by the company's reduction of registered capital in violation of legal procedures and conditions, which harms the interests of the company's shareholders or creditors. Capital reduction disputes are mainly divided into several categories: 1. Company shareholders file a lawsuit to confirm that the company's capital reduction is invalid or cancel the company's capital reduction resolution, which belongs to the company resolution dispute in the company dispute; 2. Company creditors file a lawsuit to require the company to pay off its debts or provide corresponding guarantee, which belongs to other disputes in the commercial field; 3. Due to the illegal capital reduction procedure, the company's creditors sued the capital reduction shareholders to assume supplementary liability for the company's debts within the scope of the capital reduction, and this type of dispute is a typical capital reduction dispute. By combing the relevant laws, supplemented by typical cases, this paper tries to clarify the relevant legal provisions and judicial rules for reference. 1. related regulations (I) related laws 1. the People's Republic of China Civil Procedure Law Article 26 Litigation arising from disputes over the establishment of a company, confirmation of shareholder qualifications, distribution of profits, dissolution, etc., shall be under the jurisdiction of the people's court of the place where the company is domiciled. 2. Company Law of the People's Republic of China Article 177 When a company needs to reduce its registered capital, it must prepare a balance sheet and an inventory of its property. The company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make a public announcement in the newspaper within 30 days. The creditor shall have the right to require the company to pay off its debts or provide corresponding guarantee within 30 days from the date of receipt of the notice, or within 45 days from the date of announcement if the notice is not received. (II) judicial interpretation 1. Circular of the Supreme People's Court of China, on Printing and Issuing the Revised Provisions on the Cause of Action in Civil Cases (2011) 21. Disputes related to the company 281. Company capital reduction dispute 2. Interpretation of the Supreme People's Court on the Application of the the People's Republic of China Civil Procedure Law Article 3 The domicile of a citizen refers to the place where the citizen's household registration is located, and the domicile of a legal person or other organization refers to the place where the main office of the legal person or other organization is located. If the location of the principal office of a legal person or other organization cannot be determined, the place of registration or registration of the legal person or other organization shall be the place of domicile. Article 22 Jurisdiction shall be determined in accordance with the provisions of Article 26 of the Civil Procedure Law for lawsuits arising from disputes over records in the register of shareholders, requests for changes in company registration, shareholders' right to know, company resolutions, company mergers, company division, company capital reduction, company capital increase, etc. 3. (III) of the Provisions of the Supreme People's Court on Several Issues concerning the Application of the the People's Republic of China Company Law Article 13 If a shareholder fails to perform or fails to fully perform its capital contribution obligations, and the company or other shareholders request it to fully perform its capital contribution obligations to the company in accordance with the law, the people's court shall support it. If the creditors of the company request that the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations shall bear supplementary compensation liability for the part of the company's debts that cannot be paid off within the scope of the principal and interest of the unfunded capital contribution, the people's court shall support it; the shareholders who have not fulfilled or fully fulfilled their capital contribution obligations have already undertaken the above-mentioned responsibilities, and other creditors make the same request, the people's court shall not support it. If a shareholder fails to perform or fails to fully perform the obligation of capital contribution at the time of the establishment of the company, and the plaintiff who files a lawsuit in accordance with the first or second paragraph of this article requests the promoter of the company and the defendant shareholder to bear joint and several liability, the people's court shall support it; after the promoter of the company assumes responsibility, it may recover compensation from the defendant shareholder. If a shareholder fails to perform or fully perform the obligation of capital contribution when the company increases its capital, the plaintiff who files a lawsuit in accordance with the first or second paragraph of this article requests that the directors and senior managers who have not paid their capital contribution bear the corresponding responsibilities for failing to fulfill the obligations stipulated in the first paragraph of Article 147 of the company law, The people's court shall support it; after the directors and senior managers bear the responsibility, they may recover compensation from the defendant shareholders. Article 14 Where a shareholder withdraws his capital contribution, the people's court shall support the request of the company or other shareholders to return the principal and interest of the capital contribution to the company, and other shareholders, directors, senior managers or actual controllers who assist in the withdrawal of capital contribution shall bear joint and several liability for this. The people's court shall support the shareholders who request the withdrawal of capital contributions to bear supplementary liability for the unpayable part of the company's debts within the scope of the principal and interest of the withdrawal of capital contributions, and other shareholders, directors, senior managers or actual controllers who assist in the withdrawal of capital contributions shall bear joint and several liability for this. The people's court shall not support the shareholders who have already assumed the above-mentioned responsibilities and other creditors make the same request. Minutes of the (III) National Civil and Commercial Trial Conference Notice of the Supreme People's Court on Issuing the Minutes of the National Courts Conference on Civil and Commercial Trials (Law [2019] No. 254) 2. on the trial of company dispute cases (I) on the validity and performance of the "gambling agreement". 5. ["Gambling" with the target company] If the "gambling agreement" concluded between the investor and the target company does not have any statutory reasons for invalidity, if the target company claims that the "gambling agreement" is invalid only on the grounds of the existence of equity repurchase or monetary compensation agreement, the people's court will not support it, but the investor claims that it is actually performed, the people's court shall examine whether it complies with the mandatory provisions of the Company Law on "shareholders shall not withdraw their capital contributions" and share repurchase, and whether the judgment supports their claims. If the investor requests the target company to buy back its shares, the people's court shall examine it in accordance with the mandatory provisions of Article 35 of the Company Law on "shareholders may not withdraw their capital contributions" or Article 142 on share repurchase. After examination, if the target company has not completed the capital reduction procedure, the people's court shall reject its claim. If the investor requests the target company to assume the obligation of monetary compensation, the people's court shall conduct a review in accordance with the mandatory provisions of Article 35 of the Company Law on "shareholders may not withdraw their capital contributions" and Article 166 on profit distribution. If, after examination, the target company has no profit or is not profitable enough to compensate the investor, the people's court shall reject or partially support its claim. In the future, when the target company has profits, the investor may also file a separate lawsuit based on that fact. Provisions issued by regional courts in (IV) 1. Guiding Opinions of the Higher People's Court of Jiangxi Province on Several Issues Concerning the Trial of Cases of Company Disputes (2008 No. 4) On the Dispute of 2. Shareholder's Capital Contribution 12. When the company is established, if the promoter makes a false capital contribution, the other promoters shall bear the joint and several liability for the payment. This liability is not waived by the transfer of equity by other promoters. If a shareholder withdraws his capital contribution, the shareholders, directors, managers and other senior management personnel who help to withdraw their capital contribution shall be jointly and severally liable. When the company increases its capital, if the shareholders make false capital contributions, the responsible shareholders, directors, managers and other senior managers shall bear joint and several liability. After the responsible person stipulated in the above three paragraphs has assumed responsibility, he may recover the compensation from the promoter or shareholder of the defective capital contribution, or he may demand from other jointly and severally responsible persons to pay off his share. 18. If the company fails to notify the creditors in accordance with the provisions of Article 178 of the Company Law, or fails to pay off the debts or provide corresponding guarantees in accordance with the requirements of the creditors, the company's creditors may require the shareholders to recover their respective capital contributions. Within the scope of the company's debts before the capital reduction, it shall jointly and severally bear supplementary liability for compensation. 2. Guidelines for the Judgment of the Second Civil Division of the Higher People's Court of Guangxi Zhuang Autonomous Region on Several Issues Concerning the Trial of Company Dispute Cases (Guigao Fa Min II [2020] No. 19) The effectiveness of the capital system of 1. companies. 2. [Capital Maintenance in Shareholder Withdrawal] Shareholder withdrawal involves the withdrawal of capital contribution and further the reduction of the company's capital. Therefore, based on the protection of creditors' interests, the company's capital system places certain restrictions on shareholder withdrawal:(1) Shareholders agree to withdraw their shares through the resolution of the company's shareholders' meeting, or withdraw their shares through claiming the right of repurchase of dissenting shareholders (Article 74 of the Company Law), the interests of creditors of the company shall be protected through legal capital reduction procedures (Article 177 of the Company Law);(2) If shareholders withdraw their shares through dissolution of the company, they shall protect the interests of creditors of the company through legal liquidation procedures (Article 183 of the Company Law);(3) Shareholders withdraw from the company by transferring all their shares, which does not involve the reduction of the company's capital and is not subject to the company's capital control, however, if the transferring shareholder transfers the equity without making a full capital contribution, he still bears the obligation to make up the capital contribution (Article 18 of Interpretation III of the Company Law). 2. the legal effect of the articles of association Review of the validity of 9. gambling agreements. 45. [Nature of Repurchase Clause] If the gambling agreement mode is adopted in the equity transfer transaction, the repurchase clause is usually set to withdraw the investment, I .e. to recover the "loan" or "financing fund". The people's court shall conduct a review at the level of the company's capital system, I .e. whether the repurchase complies with the statutory capital reduction procedure, so as to ensure that the interests of all parties behind the withdrawal of capital contribution or recovery of "financing fund" are fairly protected. However, if the investor requests the target company to repurchase its shares and at the same time appeals to the target company to perform the capital reduction procedure, the people's court will not support it because the company's capital reduction procedure is a matter of corporate autonomy and the judiciary will not intervene. Overview of 2. Litigation Plaintiff: Creditor Defendant: All or part of the shareholders (according to: Articles 13 and 14 of the (III) on Several Issues Concerning the Application of the the People's Republic of China Company Law of the People's Republic of China by the Supreme People's Court) Jurisdiction: under the jurisdiction of the people's court of the company's domicile (based on Article 26 of the Civil Procedure Law and Article 22 of the Interpretation of the Supreme People's Court on the Application of the the People's Republic of China Civil Procedure Law) Litigation request: 1. Request to order the defendant x x x to bear supplementary liability for the part of x x company's debt that cannot be paid off by the plaintiff within the scope of the capital reduction of x x yuan; 2, the case acceptance fee, preservation fee and other litigation costs are borne by the defendant. 3. Disputes and Judgment Rules (I) Controversial Question 1: Is the nature of capital reduction in violation of legal procedures equivalent to the withdrawal of capital contributions? Are shareholders liable for the withdrawal of capital contributions? The judgment case of Shanghai Delixi Group Co., Ltd. v. Jiangsu Boenshitong High-tech Co., Ltd., Feng Jun and Shanghai Boenshitong Optics Co., Ltd. in the 11th issue of the Bulletin of the Supreme People's Court in 2017 equated the nature of illegal capital reduction with the withdrawal of capital contribution. The Supreme Court heard the dispute over the loan contract between Anhui Xinji Coal and Electricity (Group) Co., Ltd., Rudong County Rural Credit Cooperative Association and Shanghai Hengde Zhidi Co., Ltd. [(2010) Min Ti Zi No. 79], the Supreme Court clearly put forward this point of view for the first time. There are different views that illegal capital reduction is equivalent to the nature of capital withdrawal, which will inappropriately expand the scope of liability, and will extend the scope of liability to other shareholders, directors, senior managers or actual controllers who assist in the withdrawal of capital, and will improperly amplify the "harmfulness" of illegal capital reduction, Because in civil cases, it may involve the crime of withdrawing capital in criminal cases. Case 1: Shanghai Delixi Group Co., Ltd. v. Jiangsu Boen Shitong High-tech Co., Ltd., Feng Jun and Shanghai Boen Shitong Optics Co., Ltd. Case of Dispute over Purchase and Sales Contracts [Supreme Court Gazette Case 2016 Hu 02 Min Zhong No. 10330]] The court held that the shareholders of Jiangsu Boen Company formed resolutions of the shareholders' meeting on August 10 and September 27, 2012 on the reduction of the company's capital. At this time, the creditor's rights of Delixi Company had already been formed. As shareholders of Jiangsu Boen Company, Shanghai Boen Company and Feng Jun should know clearly. However, in this case, Shanghai Boen Company and Feng Jun still agreed to Feng Jun's request for capital reduction through the resolution of the shareholders' meeting, and did not directly notify Delixi Company, which not only damaged the solvency of Jiangsu Boen Company, but also infringed on the claims of Delixi Company, and should bear corresponding legal liability for the debts of Jiangsu Boen Company. When the company fails to notify known creditors of a capital reduction, the situation is not essentially different from the substance of the shareholder's illegal withdrawal of capital and the effect on the damage to the creditors' interests. Therefore, although our law does not specify the liability of shareholders in the event of damage to the interests of creditors as a result of a company's failure to comply with the statutory procedures for capital reduction, it can be determined by reference to the relevant principles and provisions of the company law. Due to the defects in the capital reduction behavior of Jiangsu Boen Company, the company's claims formed before the capital reduction cannot be paid off after the capital reduction, Shanghai Boen Company and Feng Jun, as shareholders of Jiangsu Boen Company, shall bear supplementary liability for the non-payment of the debts of Jiangsu Boen Company within the scope of the amount of the company's capital reduction. Case 2: Dispute over Loan Contract between Anhui Xinji Coal and Electricity (Group) Co., Ltd. and Rudong County Rural Credit Cooperative Association and Shanghai Hengde Real Estate Co., Ltd. [(Supreme People's Court (2010) Min ti Zi No. 79)]] The court held that: therefore, the withdrawal of the coal power company from Hengde company violated the legal procedure of capital reduction, which should be recognized as the name of capital reduction, which is actually the nature of capital withdrawal, and the coal power company should bear joint and several liability for the guaranteed debts of Hengde company within the scope of its capital contribution of 25 million yuan. Case 3: Xiangtan Dahan Iron and Steel Trading Co., Ltd. and Hu Zhi and Liang Shuai Company's Capital Reduction Dispute heard by Xiangtan Intermediate People's Court [(2014) Tan Zhongmin Erchu Zi No. 20]] The court held that: Jinrong Company did not notify the known creditor Dahan Company when reducing its capital, resulting in Dahan Company not knowing about its capital reduction, nor could it ask it to pay off its debts or provide guarantees in advance, the capital reduction procedure was flawed and had no legal effect on Dahan Company. Although the company law stipulates that the notice obligor when the company is reducing its capital is the company, the company's capital reduction is the result of the resolution of the shareholders' meeting, and whether and how to reduce the capital depends entirely on the will of the shareholders. As the shareholders of Jinrong Company, Hu Zhi and Liang Shuai still reduced the company's registered capital through the resolution of the shareholders' meeting even though they knew that the company's external liabilities had not been paid off. Subjectively, there was a fault, which objectively damaged the solvency of Jinrong Company and endangered the realization of the creditor's rights of Dahan Company. In essence, it caused the same consequences as the withdrawal of capital contribution, therefore, we should refer to the second paragraph of Article 14 of the "(III) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Law". The people's court shall support the shareholders who request the company's creditors to withdraw their capital contributions to bear supplementary compensation for the unpayable part of the company's debts within the scope of the principal and interest of the withdrawal of capital contributions, and other shareholders, directors, senior managers or actual controllers who assist in withdrawing capital contributions shall bear joint and several liability for this; the shareholders who have withdrawn their capital contributions have already assumed the above-mentioned responsibilities. If other creditors make the same request, the people's court will not support the "treatment, I .e. the defendants Hu Zhi and Liang Shuai shall, within the scope of capital reduction, bear supplementary compensation liability for the payment obligations of Jin Rong Company as determined in the civil mediation document No. 43 of Tanzhong Min Er Chu Zi of our hospital (2012). Case 4: Cai Ruixian et al. v. Shanghai Yongdian Garment Technology Co., Ltd. Shareholder's Capital Contribution Dispute [(2014) Hu Yi Zhong Min Si (Shang) Zhong Zi No. 462]] The court held that, according to the provisions of the current company law, shareholders have the obligation to effectively perform their capital contributions in accordance with the articles of association of the company, and at the same time have the responsibility to maintain the company's registered capital. The company's capital reduction should be subject to legal procedures in accordance with the law to ensure that the company's creditors have the opportunity to make corresponding decisions before the company's assets are reduced.

2021-12-20

Zhongcheng Qingtai. Real estate perspective: how to judge the nature of developers to promote school district housing behavior?

1. issues raised In order to improve the subsidiary value and attractiveness of the development of real estate, more and more developers choose to take "XX school district housing" and "gathering XX school" as the highlights of the sales promotion. However, the general commercial housing is mostly short-term housing, and the supporting construction is not synchronized with the delivery of housing, there is the possibility that the school district will fail or be inconsistent with the publicity. Article 473, paragraph 2, of the Civil Code clearly states that "commercial advertisements and publicity that meet the conditions for an offer constitute an offer." Does the developer's behavior of publicizing the school district housing constitute an offer? Does the publicized school have any influence on determining whether the developer constitutes a breach of contract within the scope of the commercial housing development plan? How should the developer and consumers avoid the possible risks brought by the school district housing publicity? 2.-related views and cases, refereeing views (I) the developer's publicity on the school district housing has a significant impact on whether the buyer enters into a commercial housing sales contract with him. The publicity color page should be regarded as the content of the contract and is binding on both parties to the contract. The house involved in the case is not in the school district, which is inconsistent with the contract agreement, resulting in the buyer's contract purpose cannot be realized, and the buyer can request to terminate the contract. Case: Cheng Juan and Chen Baoyin's Dispute over Housing Sales Contract (Heze Intermediate People's Court (2020) Lu 17 Civil Judgment No. 1331) The court held that the focus of the dispute in this case is whether the contract for the sale of the house involved should be terminated. First of all, Article 3 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Commercial Housing Sales Contract Disputes" stipulates: "Commercial housing sales advertisements and promotional materials are invitations to offer, but the seller's housing and related within the scope of the commercial housing development plan If the explanation and promise made by the facility are specifically determined, and have a significant impact on the conclusion of the commercial housing sales contract and the determination of the housing price, it shall be regarded as an offer. Even if the statement and promise are not included in the contract for the sale of commercial housing, they shall be regarded as the content of the contract, and if the parties violate it, they shall bear the liability for breach of contract." The publicity color page of the appellant Hejian Real Estate Company clearly indicates the words "live in Hejian Zijun City and study in Boyu Middle School". Dong Bowen, the daughter of the appellant Cheng Juan, is in high school. Such publicity by the appellant Hejian Real Estate Company has a significant impact on whether Cheng Juan and Chen Baoyin enter into a commercial housing sales contract with them. Therefore, the publicity color page should be regarded as the content of the contract and binding on both parties to the contract. At present, the house involved in the case is not in the enrollment area of Boyu Middle School in Cao County, which is inconsistent with the contract agreement. As a result, the contract purpose of Cheng Juan and Chen Baoyin cannot be realized. Therefore, the appellants Cheng Juan and Chen Baoyin's request to terminate the commercial housing sales contract involved in the case is based on the law, and the court supports it. If the description and promise made by the (II) developer on the housing and related facilities within the scope of the commercial housing development plan are specifically determined, and have a significant impact on the conclusion of the commercial housing sales contract and the determination of the housing price, it shall be regarded as an offer, even if it is not included in the commercial housing sales contract, It should also be regarded as the content of the contract. Case: Wang Xinxin, Liu Shangneng and Suzhou New High Land Co., Ltd. Commercial Housing Sales Contract Dispute (Jiangsu Suzhou huqiu district People's Court (2018) Su 0505 Minchu No. 3012 Civil Judgment) The court held that:... the defendant repeatedly mentioned "double school district", "the third middle school of the new district and the experimental middle school of science and technology city", "double school district guarantee", "easy to choose a house but difficult to choose a school", "double school district, experimental middle school" and other contents in the pavement and billboards, website publicity materials and WeChat promotion platform of Hongjinwan real estate, according to the above sales advertisements and publicity materials, ordinary buyers can naturally draw the conclusion that the house involved in the case belongs to the school district of Science and Technology City Experimental Middle School (Science and Technology City Branch of New District Experimental Middle School) and their children can study in the school, which will have an important impact on whether to buy the house involved in the case and the determination of the price of the house involved. Therefore, it should be regarded as an offer, even if both parties fail to include the defendant's publicity and promise about the school district in the Commercial Housing Purchase Contract. However, this content shall also be an integral part of the contract and both parties shall be bound by it. According to the relevant documents of the education department of Suzhou City and the High-tech Zone on the division of the school district, the house involved does not belong to the school district of the New District Experimental Middle School Science and Technology City Branch, but belongs to the school district of the New District No. 3 Middle School, so the defendant violated the contract and constituted a breach of contract., Should bear the liability for breach of contract. Real estate belongs to the family's large property, its primary function is to live. Buyers who buy houses in order to choose school districts are different from ordinary buyers. They have reason to believe that they have a deeper understanding of local school district policies, and they should be more cautious than ordinary buyers. Therefore, the choice of the school district is not the contractual purpose of the contract for the sale of the house in this case, and the plaintiff made the decision to purchase the house involved due to negligence and recklessness, and he himself was quite at fault. In view of the fact that the plaintiff did not provide any evidence to prove the price difference between the house involved in the case and the surrounding non-key school district houses in the same location and the same quality at the time of purchase, and the appraisal application for similar cases in the same district was also returned due to the incomparable sample, there is no evidence to prove the loss of the house price difference claimed by the plaintiff. However, the defendant's improper publicity constituted a breach of contract, which caused the dispute in this case. The court considered the fault degree of both parties and the performance of the contract, and decided to compensate the plaintiff for the loss of 10000 yuan. As for the agreement between the two parties in annex 5 to the contract: article 2 of the supplementary agreement to the contract, the court believes that the above agreement, as a standard clause provided by the seller, does not formally prompt and explain the plaintiff in a way sufficient to attract the attention of the buyer. the content excludes the buyer's main rights and exempts itself from its own obligations, thus it is invalid. (III) the school is outside the scope of the housing development plan involved in the case, the supplementary agreement clearly stipulates that the promotion of commercial housing does not constitute a contract offer, the buyer fully understands the terms of the contract when the contract is signed, and the developer does not constitute a breach of contract. Case: Li Shougang's Dispute over Commercial Housing Sales Contract with Jinan Yuantai Real Estate Co., Ltd. and Shandong Beida Resources Real Estate Co., Ltd. (Jinan Intermediate People's Court (2017) Lu 01 Min Zhong No. 5484 Civil Judgment) The court held that the "Notice" issued by Peking University Resources Company... was not included in the commercial housing sales contract, and the seventh paragraph of Article 17 of the contract stipulates that "the sand table, model, model room, publicity materials and publicity advertisements displayed by the seller are only for promotion indication, and do not constitute any offer. All agreements in this contract shall prevail, and the delivery entity shall prevail if there is no agreement in this contract", therefore, the contents of the above notice cannot be regarded as the contents of the contract. Article 3 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Contracts for the Sale of Commercial Housing stipulates that ...... the "housing and related facilities" referred to in this provision are "within the scope of the planning for the development of commercial housing", while the school referred to in the Notice does not fall within the scope of the planning for the development of the housing involved, so the provisions of the judicial interpretation cannot be applied to this case. In the case that the content of the school district housing in the "Notice" was not included in the commercial housing sales contract, Li Shougang claimed the relevant liability for breach of contract based on the content. There was no basis in the law, and the first instance did not support it, which was not improper. (IV) the school has changed due to planning adjustment, it is still equipped with corresponding educational resources. The occurrence of this fact is related to the corresponding planning adjustment of the local government. The developer's publicity about the school district housing is not false publicity and does not constitute a breach of contract. Case: Wu Kouzhu, Miao Yamin and Ocean Real Estate Zhenjiang Co., Ltd. Commercial Housing Sales Contract Dispute (Jiangsu Higher People's Court (2017) Su Minshen No. 957 Civil Judgment) The court held that there was a primary school originally planned in the third phase plot of Sino-Ocean Company, but according to the planning adjustment of Zhenjiang City Planning Committee, it was decided that the primary school and the junior high school reserved in the resettlement house on the east side of the third phase plot of Sino-Ocean Company should be merged into a nine-year consistent school. ... Even if it is confirmed that the introduction of the propaganda of Runzhou Experimental Primary School by Sino-Ocean Company is indeed an offer, the original primary school is changed to a nine-year consistent school due to planning adjustment, and the teachers are arranged by the Education Bureau of Runzhou District, Zhenjiang Experimental School and Runzhou Experimental Primary School as a whole, and they are still equipped with corresponding educational resources, and the school actually built is changed from a primary school to a nine-year consistent school, which is related to the corresponding planning adjustment of local government, the 1. Court of Second Instance did not support Wu Kaozhu and Miao Yamin's claim that the Ocean Company "introduced Runzhou Experimental Primary School" as false propaganda, which constituted a breach of contract and also constituted fraud. 3. Summary Article 472 of the Civil Code provides for the definition and constituent elements of an offer, and article 473, paragraph 2, provides that "if the content of commercial advertisements and publicity meets the conditions of an offer, it constitutes an offer." Article 3 of the interpretation of the Supreme People's Court on Several Issues concerning the application of law in the trial of disputes over commercial housing sales contracts stipulates that "the sales advertisements and publicity materials of commercial housing are invitation to offer, but the seller's explanation and promise on the housing and related facilities within the scope of the commercial housing development plan are specifically determined, and have a significant impact on the conclusion of the commercial housing sales contract and the determination of the housing price, It constitutes an offer. The statement and promise, even if it is not included in the contract for the sale of commercial housing, shall be the content of the contract, and if the parties violate it, they shall bear the liability for breach of contract." Whether the developer's behavior of publicizing the school district housing constitutes an offer is the key to judging whether the developer is in breach of contract and whether the contract for the sale of commercial housing can be terminated. One point of view is that commercial housing and related facilities generally include commercial housing itself and the supporting infrastructure and public buildings of commercial housing. Schools are not within the scope of commercial housing development planning. Supporting schools are decided by the local government's corresponding planning and adjustment, and are not based on the will of the developer. The relevant commercial housing sales contract also clearly stipulates that the content of the contract shall prevail. There is no guarantee about the school in the contract. The publicity of the school district housing cannot constitute an offer, there is no possibility of default by the developer; however, if the school is indeed within the scope of the commercial housing development plan, the school advertised by the developer does not exist or is different from the school actually attended, there is a risk of being identified as an offer and constituting a default. Another point of view is that there are transportation, schools, hospitals and other supporting facilities around the house, and the school should belong to the relevant facilities within the scope of the commercial housing development plan. The promise made by the publicity is clear and definite, and the publicity of xx school has an important impact on whether the buyers conclude the commercial housing sales contract and the determination of the housing price. The publicity of the school district housing constitutes an offer, and the failure or change of the school district leads to the developer to breach of contract, should bear the liability for compensation, the circumstances are serious so that the buyer can not achieve the purpose of school may have the risk of termination of the contract. In practice, local courts have slightly different criteria for judging whether the developer's publicity of the school district house constitutes an offer, which needs to be judged in combination with the actual situation of the case. Even if most courts determine that the developer's publicity of the school district house constitutes an offer, the inconsistency between the school and the publicity when the house is actually delivered constitutes a breach of contract. In most cases, the breach of contract has not reached the level of termination of the contract, but the developer should bear certain liability. 4. Risk Alert Our lawyers believe that developers should raise their risk awareness when promoting commercial housing, carefully carry out advertising activities, avoid misleading publicity, and clearly mark the behavior as an invitation to offer in publicity materials such as leaflets and advertising walls, and the actual commercial housing sales contract signed by both parties shall prevail. In addition, because the commercial housing sales contract is a standard contract provided by the developer, there is a risk that individual clauses will be recognized as standard clauses, the important terms can be prompted and explained in a way that is sufficient to attract the attention of the buyer, and the buyer can be fully explained when signing the contract, and it is clear that "if the agreement in the commercial housing sales contract is inconsistent with the advertising agreement, the agreement in the sales contract shall prevail". As an important asset of the family, consumers should exercise prudent care when buying a house, have an in-depth understanding of the local school district policy, and avoid taking losses due to negligence and rash decisions to buy a house.

2021-12-20

Viewpoint | Analysis of the reliability of patent protection

It is generally believed that the value of patent rights includes legal value, technical value and economic value. The reliability of patent protection is an important index to evaluate and analyze the legal value of patent. The so-called reliability of patent protection refers to the reliability of the patentee or patent user in the face of the suspected infringing object, using the current infringement determination rules to determine whether the suspected infringing object falls into the scope of specific patent protection. Through the analysis of the stability of the specific patent itself and the restriction degree of the following patent, the probability of a specific patent winning a patent infringement lawsuit is judged. This paper will start with the writing quality of the claims and instructions to analyze the reliability of patent protection, so it is only applicable to inventions or utility models, not design. The author thinks that the reliability of patent protection can be analyzed comprehensively from the five dimensions of patent category, patent text quality, restriction degree of implementation, restriction degree of following patent and stability, so as to draw a more objective expectation judgment on whether infringement is established in patent infringement litigation. 1. patent category According to China's current patent examination and authorization rules, utility model patents can be authorized only through formal examination, while invention patents can only be authorized after passing formal examination and passing substantive examination. Therefore, the stability of a particular patent can be judged by the type of patent and the nature of the invention, and it is clear that the stability of the invention patent is higher than that of the utility model patent. In addition, starting with the layout of the claims, the independent claim is a product claim and has more subordinate claims, which is better than only one product claim, and then better than only the method claim. 2. patent text quality The consideration of the quality of the patent text should include at least the following three aspects: first, the writing quality of the independent claims; second, the layout and writing quality of the dependent claims; third, the clarity and completeness of the patent specification and the support for the claims. An ideal authorized patent should meet all the following conditions:(1) the patent specification provides a clear and complete description of the invention and creation, and the embodiments are specific, to the extent that can be realized by those skilled in the art in combination with the accompanying drawings;(2) The independent claims are supported by the specification, with clear expressions and appropriate generalizations;(3) The subordinate claims are reasonably arranged and have a considerable number of subordinate claims;(4) There is no case where the amendment provided for in Article 33 of the Patent Law exceeds the scope. Obviously, if a patent deviates more and more negatively from the above conditions, the text quality will be worse. Constraints on 3. implementation The purpose of this indicator is to analyze whether a specific patented technical solution falls within the scope of protection of the prior patent, and if so, the implementation of the specific patent requires the permission of the prior patentee, otherwise the prior patent will be infringed. In the specific judgment method, after searching, compare a particular patent with a closest prior patent, determine the degree of overlap with the prior patent independent claim, and determine whether the two constitute equivalent if there is a difference in technical characteristics. Obviously, if there is a substantial difference between a particular patent and the nearest prior patent, and the technical characteristics of the independent claim are significantly different, then the particular patent can be implemented independently and is not subject to the surviving patent, which is the best. If a particular patent is subject to a prior patent, but the prior patent clearly has a flaw that has been declared invalid or if the particular patent has room to avoid the prior patent, it is an intermediate result. If a particular patent falls within the scope of prior patent protection and lacks substantive characteristics relative to the prior patent, it is a poor result. 4. degree of restriction on following patents This indicator is used to determine the degree of restriction of a particular patent on the implementation of a subsequent follow-up improvement technology, I .e., the probability of a subsequent follow-up technology avoiding a particular patent infringement. In the specific method, compare the specific patent with the following patent, and analyze whether the specific patent can effectively restrict the independent implementation of the following patent relative to the specific patent. Obviously, it is best if the follow-up patent is not retrieved, or if the follow-up patent falls unquestionably within the scope of protection of a particular patent. If, although there are different technical characteristics between the following patent and the specific patent, there is no substantial difference, that is, the following patent has a high probability of falling into the scope of protection of the specific patent, is also a better result. If the follow-up patent does not fall within the scope of protection of the particular patent, I .e. the follow-up patent can be implemented freely without the restriction of the particular patent, then the value of the particular patent will be diminished. 5. stability This indicator is used to determine the possibility of invalidation of a particular patent. Compare the specific patent with the existing technology before the filing date, and determine whether the specific patent has the risk of being declared invalid as stipulated in Article 65 of the Regulations of the Patent Law. Under this index system, the stability of patents with more distinguishing technical features is higher than that of patents with less distinguishing technical features. If a particular patent independent claim has more distinguishing technical features that are materially different from the combination of more than one prior art, then the probability of that particular patent being declared invalid is small and optimal. If a particular patent independent claim has few or no distinguishing technical features that differ materially from a combination of prior art within 3 articles, then the probability that the particular patent will be invalidated is high and is a poor result. If a particular patent independent claim has several distinguishing technical features compared with the combination of 3 or so existing technologies, but it is doubtful whether the distinguishing technical feature is a replacement of customary technical means, then the probability of the particular patent being declared invalid is in the middle. To sum up, according to the relevant provisions of China's Patent Law, Detailed Rules for the Implementation of the Patent Law and Patent Examination Guidelines, the author takes the quality of patent text as the main line, combines the characteristics of invention or utility model patents, and discusses the reliability of patent protection from five aspects: patent category, patent text quality, restriction degree of patent implementation, restriction degree of patent to follow patent, and stability of patent, the legal restriction effect of specific patented technology on the related technology in the same technical field is given objectively, and the result probability of infringement litigation is expected.

2021-12-20

Viewpoint. Whether the applicant can request the setting aside of the arbitral award on the grounds that the arbitral tribunal has not made the arbitral award within the statutory time limit.

The revocation of the arbitral award needs to meet the statutory requirements, and this paper focuses on the analysis of whether the arbitral tribunal's failure to make an arbitral award within the statutory time limit constitutes a violation of the statutory procedure in the arbitral procedure and leads to the revocation of the arbitral award. 1. [link to the law]] the People's Republic of China Arbitration Act Article 58 If the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located to cancel the award. (I) there is no arbitration agreement; The matters awarded by the (II) do not fall within the scope of the arbitration agreement or the arbitration commission does not have the power to arbitrate; (III) the composition of the arbitration tribunal or the arbitration procedure violates the legal procedure; (IV) the evidence on which the award is based is falsified; (V) the opposing party conceals evidence sufficient to affect a just decision; (VI) arbitrators have solicited or accepted bribes, practiced favoritism, or perverted the law in adjudicating the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law Article 20 The term "violation of legal procedures" as stipulated in Article 58 of the Arbitration Law refers to the circumstances in which the violation of the arbitration procedures stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case. 2. Typical Case] Case 1: The case of Company A and Company B applying for setting aside the arbitral award. On November 11, 2019, Chen and Company B filed an application for arbitration in this case to the Beijing Arbitration Commission. The respondent was Company A. After the Beijing Arbitration Commission formally accepted the case on November 18, 2019, it was held on December 31, 2019. Form an arbitration tribunal. In accordance with the arbitral award made on 8 March 2021, the arbitral tribunal of summary proceedings shall, in accordance with the provisions of the Arbitration Rules, make an award within 75 days from the date of the formation of the tribunal. If there are special circumstances that require an extension, the sole arbitrator shall submit it to the Secretary-General for approval, and the extension may be appropriately extended. Company A believes that the arbitration award made by the Arbitration Commission on March 8, 2021 exceeds the above-mentioned time limit, and requests the court to revoke the (2021) Beijing Arbitration Zi No. XXX award made by the Arbitration Commission in accordance with the law. The court held that this case was a case in which the parties applied for the revocation of the domestic arbitration award and should be reviewed in accordance with Article 58 of the the People's Republic of China Arbitration Law. Article 58 of the the People's Republic of China Arbitration Law stipulates that if the parties provide evidence to prove that the award has one of the following circumstances, they may apply to the intermediate people's court where the arbitration commission is located for cancellation of the award: (1) there is no arbitration agreement; the matters on which the award is (II) do not fall within the scope of the arbitration agreement or the arbitration commission has no power to arbitrate; the composition of the arbitration tribunal or the arbitration procedure violates legal procedure; the evidence on which the (IV) award is based is forged; the other party to the (V) has concealed evidence sufficient to affect the fairness of the award; the (VI) arbitrator has solicited and accepted bribes, practiced favoritism, or perverted the law in the arbitration of the case. If the people's court, after forming a collegial panel to examine and verify the award, has one of the circumstances specified in the preceding paragraph, it shall rule to cancel the award. If the people's court determines that the award is contrary to the public interest, it shall rule to cancel it. The above-mentioned provisions are the statutory reasons for the people's court to revoke the domestic arbitral award. With regard to Company A's claim that the arbitration procedure violates the legal procedure, the Court holds that the "violation of legal procedure" stipulated in Article 58 of the the People's Republic of China Arbitration Law refers to the situation that the violation of the arbitration procedure stipulated in the Arbitration Law and the arbitration rules chosen by the parties may affect the correct award of the case, and the violation of legal procedure shall seriously affect the procedural rights of the parties and substantially affect the correct award of the case. With regard to the fact that the award involved in the case was heard by a sole arbitrator, the Beijing Arbitration Commission made a clear statement on the matter. In addition, in accordance with Article 54, paragraph (I), and Article 55, paragraph (I), of the Arbitration Rules, the arbitration involved in the case was filed on the basis of the parties' arbitration request, which met the conditions for the application of the summary procedure in the Arbitration Rules, and it was not improper for the sole arbitrator to hear the case. Article 58 of the Arbitration Rules stipulates that if the amount of the dispute in the case exceeds 5 million yuan due to the change of the arbitration request, the summary procedure shall not be affected. Regarding the extension of the trial limit of the arbitration involved in the case, the case was applied by the sole arbitrator and approved by the Secretary-General of the Beijing Arbitration Commission to extend the trial limit, which does not violate the provisions of the Arbitration Rules. In addition, the arbitration tribunal heard all the arbitration requests of Chen Mou and Company B and the defense of Company A, investigated the relevant facts of the case, and organized both parties to provide evidence and cross-examine the evidence. The two parties debated around the focus of the dispute. Before the end of the trial, the two parties issued their final statements. No company A's rights were infringed. Therefore, the court did not support company A's claim. Case 2: The case of Xu and Chen's application to set aside the special procedure of the arbitral award. On September 23, 2009, Xu filed an arbitration application with the Yangzhou Arbitration Commission in accordance with the arbitration clause agreed in the contract, requesting the cancellation of the equity transfer agreement signed on October 16, 2008. The Yangzhou Arbitration Commission accepted Xu's arbitration request on September 24, 2009, and served relevant materials to the respondent Chen. On 26 November 2009, the Tribunal held its first hearing. On 19 and 20 December 2009, the Tribunal held its second session. On January 30, 2010, Xu filed an application for withdrawal from the chief arbitrator Xing. On February 8, 2010, Yangzhou Arbitration Commission made (2009) decision No. 668-1, deciding to reject Xu's application for chief arbitrator Xing to withdraw. On August 23, 2010, Yangzhou Arbitration Commission delivered the decision to Xu and Chen. … On July 5, 2016, Yangzhou Arbitration Commission made Award (2009) Yang Arbitration Zi No. XX, which was served on Xu and Chen on July 27, 2016. Xu later considered that the arbitral award had exceeded the statutory time limit and requested that it be set aside. Court view: on the question of whether the arbitration proceedings are illegal. Article 46 of the Yangzhou Arbitration Rules stipulates: "The arbitral tribunal shall make an arbitral award within four months after the formation of the arbitral tribunal. If there are special circumstances that require an extension, the chief arbitrator or the sole arbitrator may report to the chairman of the arbitration commission for approval, and the extension may be appropriately extended." According to this provision, four months is the time limit that the arbitral tribunal should abide by. Even if it needs to be extended, it should be appropriately extended, and the extended time limit should be specified when handling the application and approval procedures. The arbitral award involved in the case took 6 years and 8 months from the formation of the arbitral tribunal on November 2, 2009 to the service of the arbitral award to the parties on July 27, 2016, far exceeding the four-month period stipulated in the Yangzhou Arbitration Rules. Although the arbitral tribunal applied for an extension of the trial period on the grounds of the complexity of the case, no specific time limit was determined at the time of application and approval, resulting in an extension of the arbitration period for more than six years, a serious departure from the provisions of the Yangzhou Arbitration Rules on the period of award. The arbitration case file also reflects that the arbitration tribunal's trial activities were mainly concentrated before the end of 2010, and the trial activities were basically stagnant from 2011 to 2012, and no trial activities were carried out for more than three years from 2013 to 2015. The applicant Xu has written to the arbitration tribunal many times to request the award as soon as possible, but it was not until July 2016 that the arbitration tribunal made a final award. It is therefore clearly inappropriate for the arbitral tribunal to extend a period sufficient to give the parties reasonable doubt as to the fairness of the arbitral proceedings. The Court needs to emphasize that "to ensure fair and timely arbitration of economic disputes and to protect the legitimate rights and interests of the parties" is the basic legislative purpose of China's arbitration law. As we all know, the procedure design of arbitration system is to achieve the value goal of fair and timely settlement of disputes. This is an important reason why the parties choose arbitration to resolve disputes, and it is also an important basis for the survival and development of the arbitration system. However, the arbitration tribunal in this case did not adjudicate for a long time without legitimate reasons and justifiable reasons, and the arbitration period lasted as long as six years and eight months, resulting in a long-term unstable legal relationship between the parties and unable to obtain timely and effective relief, which seriously damaged the legitimate rights and interests of the parties, the arbitral award involved in the case seriously violates the provisions of Article 51, paragraph 1, of the the People's Republic of China Arbitration Law and Article 42, paragraph 1, and Article 46 of the Yangzhou Arbitration Rules, which may affect the correct award of the case and should be revoked in accordance with the law. Summary of 3. Lawyers From the above cases 1 and 2, it can be seen that failure to make an arbitration award within the prescribed time limit does not constitute a violation of the arbitration procedure stipulated in the third paragraph of Article 58 of the Arbitration Law and a violation of the legal procedure. The "circumstances that may affect the correct award of the case" stipulated in Article 20 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Arbitration Law shall also apply." After comprehensive consideration, if it is necessary to extend the arbitration trial period due to special circumstances such as complex circumstances or epidemic situation, it will not affect the correct award of the case, and the arbitration award cannot be revoked according to this clause. On the contrary, arbitration is an efficient and convenient way to resolve disputes. If the arbitration tribunal does not issue an award for a long time without justifiable and legal reasons, and it will affect the rights of the parties and the correct award of the case, the court may set aside the arbitral award accordingly.

2021-12-20

Viewpoint... Analysis of the effectiveness of a one-person limited liability company's guarantee for its shareholders.

一、问题提出     《中华人民共和国公司法》（以下简称《公司法》）第十六条规定了公司对外担保制度，规定如下：   “公司向其他企业投资或者为他人提供担保，依照公司章程的规定，由董事会或者股东会、股东大会决议；公司章程对投资或者担保的总额及单项投资或者担保的数额有限额规定的，不得超过规定的限额。   公司为公司股东或者实际控制人提供担保的，必须经股东会或者股东大会决议。   前款规定的股东或者受前款规定的实际控制人支配的股东，不得参加前款规定事项的表决。该项表决由出席会议的其他股东所持表决权的过半数通过。”   《公司法》第十六条的第二、第三款是关于公司为股东或者实际控制人提供担保的规定，《公司法》对这种担保进行了程序上的限制，即由“其他股东”对担保进行表决，由此便产生一个问题，如果没有“其他股东”对外担保应如何表决。一人有限责任公司包括自然人独资的有限责任公司和法人独资的全资子公司两种情况，因一人公司不设股东会，如果依据《公司法》第十六条第二、第三款规定的股东会根本无法召开，此时公司能否为股东提供担保就成为了疑问。换句话说，一人有限责任公司为其股东提供担保的效力及后果如何？   在《民法典》和《最高人民法院关于适用<中华人民共和国民法典>Prior to the introduction of the Interpretation of the Guarantee System, there was considerable controversy in judicial practice regarding the effectiveness of a one-person company's guarantee for its shareholders. One point of view is that according to the provisions of paragraphs 2 and 3 of Article 16 of the Company Law, when a company provides guarantees for its shareholders, it must be resolved by the shareholders' meeting or the shareholders' meeting, and the guaranteed shareholders are not allowed to participate in the voting. The voting is approved by more than half of the voting rights held by other shareholders present at the meeting. In the case of a one-person company providing guarantees for shareholders, not only can it not form an effective shareholders' meeting resolution, it cannot even convene a shareholders' meeting, therefore, a contract entered into by a one-person company to provide security for shareholders should be considered invalid. Another view was that, according to article 63 of the Companies Act, the personality of a one-person company was presumed to be confused with the personality of its shareholders, and that, therefore, the provision of a guarantee by a one-person company for its shareholders should be understood as a guarantee by the company for itself, even if the company was unable to form a valid resolution in that regard, it would not affect the validity of the guarantee. 2. classic case 1. Viewpoint 1: The provisions of Article 16 of the Company Law are regulatory rather than effective norms. Case No.: Supreme People's Court (2012) Minti Zi No. 156 Case excerpt: The Court believes that the focus of the dispute between the parties in this case is the definition of the responsibility of the guarantor Zhenbang Co., Ltd. In view of the fact that the loan contract involved in the case has been determined to be valid for a court of second instance, and the applicant for retrial has no objection to this, the Court directly confirms the validity of the loan contract involved in the case. The Mortgage Contract and the Irrevocable Guarantee are guarantees made by the guarantor Zhenbang Co., Ltd. to the creditor Donggang Branch of China Merchants Bank for the liabilities of its shareholder Zhenbang Group Company. As a company organization and corporate behavior, it is regulated by the Company Law, and its external guarantee in the form of contract is also subject to the contract law and the security law. The determination of the validity of the company's guarantee contract in the case, because it does not go beyond the scope of the contractual act between equal commercial subjects, should first be judged from the relevant provisions of the contract law. With regard to the validity of a contract, Article 52 of the the People's Republic of China Contract Law (hereinafter referred to as the Contract Law) stipulates that "a contract shall be null and void under any of the following circumstances. ...... (V) violate the mandatory provisions of laws and administrative regulations". Regarding the "mandatory" in the aforementioned law, Article 14 of the Supreme People's Court's "Interpretation (II) on Several Issues Concerning the Application of the the People's Republic of China Contract Law" (hereinafter referred to as the Contract Law Interpretation II) makes the following interpretation and stipulates that "The" mandatory provisions "stipulated in Item (V) of Article 52 refer to effective mandatory provisions". Therefore, the law and relevant judicial interpretations have made it clear that violation of the mandatory norms of validity in laws or administrative regulations is one of the criteria for determining the validity of contracts. As a legal entity different from a natural person, the company's contractual behavior, while accepting the regulation of contract law, is subject to the company law as a special norm of the company. Article 1 of the Company Law clearly stipulates that "in order to regulate the organization and behavior of companies, protect the legitimate rights and interests of companies, shareholders and creditors, maintain social and economic order, and promote the development of the socialist market economy, this law is formulated". Article 16, paragraph 2, of the Company Law stipulates: "Where a company provides guarantees for the shareholders or actual controllers of the company, it must be resolved by the shareholders' meeting or the general meeting of shareholders". The above-mentioned provisions of the Company Law have made it clear that its legislative intent is to restrict the subject behavior of the company and prevent the actual controller or senior management of the company from harming the interests of the company, minority shareholders or other creditors, so its essence is an internal control procedure, which cannot be used to restrain the counterparty of the transaction. The above provisions should therefore be understood as regulatory peremptory norms. In principle, it is inappropriate to find the contract invalid in violation of this norm. In addition, if it is determined as a criterion of validity, it will reduce the efficiency of transactions and damage the security of transactions. For example, when the shareholders' meeting will be held, in what form, and who can express the true will on behalf of the shareholders are beyond the judgment and control ability of the counterparty of the transaction. If the contract is ruled invalid by violating the shareholder resolution procedure, it will definitely reduce the transaction efficiency. At the same time, it also leaves a system gap for the company to easily violate the shareholder resolution and claim that the contract is invalid, ultimately endangering the transaction safety, it is not only against the rules of good faith in commercial conduct, but also against fairness and justice. Therefore, 1. the court of second instance in this case, on the grounds that the resolution of the "guarantee resolution of the shareholders' meeting" involved in the case has not been approved by the shareholders' meeting of Zhenbang Co., Ltd., and Zhenbang Co., Ltd. has not held a shareholders' meeting on this matter, according to Article 16 of the Company Law, it is an error of applicable law to make a determination that the irrevocable guarantee and the mortgage contract are invalid, and the court will correct it. 2. Viewpoint 2: Article 16 of the Companies Act does not apply to one-person limited liability companies. Case No.: Sichuan Higher People's Court (2014) Chuan Min Di Zi No. 334 Excerpts from the case: the issue of the law applicable to the original judgment. 1. Whether the Ritz Hotel is liable for the guarantee. First of all, the "the People's Republic of China Company Law" and related judicial interpretations do not clearly stipulate whether a one-person limited liability company can provide guarantees for shareholders' debts, and based on the principle of freedom of contract, a one-person limited liability company can guarantee shareholders' debts. Secondly, Article 16 of the the People's Republic of China Company Law stipulates: "if a company invests in other enterprises or provides guarantee for others, it shall be decided by the board of directors or the shareholders' meeting or the general meeting of shareholders in accordance with the provisions of the articles of association; if the articles of association stipulate the total amount of investment or guarantee and the amount of individual investment or guarantee, it shall not exceed the prescribed limit. Where a company provides a guarantee for the shareholders or actual controllers of the company, it must be resolved by the shareholders' meeting or the general meeting of shareholders. The shareholders specified in the preceding paragraph or the shareholders controlled by the actual controller specified in the preceding paragraph shall not participate in the voting on the matters specified in the preceding paragraph. The vote was passed by a majority of the voting rights held by other shareholders present at the meeting." The legislative purpose of this article is to restrict related party transactions. The guarantee provided by the company for shareholders or actual controllers is a related party transaction, which may harm the interests of the company and other shareholders. Therefore, the second paragraph of Article 16 of the the People's Republic of China Company Law stipulates that the provision of related party guarantee for shareholders or actual controllers must be voted by the shareholders' meeting or the general meeting of shareholders, and cannot be decided by the board of directors through the articles of association. At the same time, the third paragraph of the article stipulates that shareholders or shareholders controlled by actual controllers shall abstain from voting. It can be seen that the law does not prohibit related guarantees, but through a special resolution mechanism in the internal governance of the company to achieve the risk control of related guarantees. For a one-person limited liability company, there is only a single shareholder, and there is no situation in which major shareholders use related party transactions to harm the interests of the company or minority shareholders. After long Zhaogang and Zhou Lin transferred their shares to Yang Guang in this case, the company is a one-person company and does not have the prerequisites for the application of paragraphs 2 and 3 of Article 16 of the the People's Republic of China Company Law. Furthermore, Article 61 of the the People's Republic of China Company Law stipulates: "A one-person limited liability company shall not have a shareholders' meeting. When the shareholders make the decisions listed in the first paragraph of Article 38 of this Law, they shall be in writing and shall be signed by the shareholders and kept in the company." Therefore, a one-person limited liability company does not have a shareholders' meeting, so it is naturally impossible to establish a shareholders' meeting and form a resolution of the shareholders' meeting. The ownership and management rights of the company are not separated and are exercised by the owner of the company, that is, the sole shareholder. Since the shareholders of a one-person limited liability company can exercise all the functions and powers of the shareholders' meeting, it should include making a decision that the company guarantees the debts of the shareholders. Therefore, Article 16 of the the People's Republic of China Company Law does not apply to one-person limited liability companies. 3. the views of our lawyers Due to the lack of community nature of one-person companies, there has been considerable controversy over whether the Company Law should recognize one-person companies in the process of amending the Company Law. The Company Law, as amended in 2005, adopts a compromise approach, I .e., while recognizing a one-person company, adopts an inversion of the burden of proof, providing that shareholders are jointly and severally liable for the debts of the company if they are unable to prove that the company's property is independent of their own property. In the case of a one-person company providing a guarantee for shareholders, whether the guarantee contract is found to be invalid because there is no resolution of the shareholders' meeting is a more controversial issue in practice. We believe that the company law makes it clear that its legislative intention is to restrict the main body of the company and prevent the actual controller or senior management of the company from harming the interests of the company, minority shareholders or other creditors. Therefore, its essence is an internal control procedure, which cannot restrict the counterparty of the transaction. Although a one-person company has an independent personality in form, in the case that the shareholders do not prove that the company's property is independent of the shareholder's property, the personality of the company will be presumed to be confused with the personality of the shareholders, so we can understand the guarantee provided by a one-person company to the shareholders as the company guarantees its own debts, and the company resolution is not a necessary condition. In other words, if a one-person company, after providing a guarantee for shareholders, requests the people's court to determine that the guarantee contract is invalid on the grounds that there is no resolution of the shareholders' meeting, the people's court shall not support it. In addition, the Supreme People's Court on the application of<中华人民共和国民法典>有关担保制度的解释》第10条对上述观点提供了法律依据，“一人有限责任公司为其股东提供担保，公司以违反公司法关于公司对外担保决议程序的规定为由主张不承担担保责任的，人民法院不予支持。公司因承担担保责任导致无法清偿其他债务，提供担保时的股东不能证明公司财产独立于自己的财产，其他债权人请求该股东承担连带责任的，人民法院应予支持。”综上，我所律师倾向于认为一人有限责任公司为股东提供担保具有法律效力，在没有公司决议的情况下公司以违反对外担保决议程序主张不承担担保责任的不应得到支持。</中华人民共和国民法典></中华人民共和国民法典>

2021-12-17

J & T Capital Watch... Exploring labor outsourcing and labor dispatch from the perspective of IPO audit.

In practice, most of the proposed IPO enterprises have more or less labor problems, and with more and more enterprises adopting the labor outsourcing model, the CSRC is paying more and more attention to the labor outsourcing problem. This paper summarizes the difference between labor outsourcing and labor dispatch, and analyzes the focus of the audit of labor outsourcing and labor dispatch by the regulatory authorities in the IPO, with a view to learning and discussing with you. 1. what is labor outsourcing? Labor outsourcing refers to the business outsourcing mode in which an enterprise contracts part of its business or function to the relevant labor service organization, and the labor service organization arranges the labor service personnel to complete the corresponding business or work according to the specific needs of the enterprise. Under the labor outsourcing mode, there is no actual employment relationship between the enterprise and the worker, so there is no need to bear the obligations of the employer. To some extent, labor outsourcing can save the labor cost of the enterprise and reconfigure the various resources of the enterprise according to the business characteristics of the enterprise. Its basic legal relationship is shown in the following figure: In the June 2020 revision of the CSRC's "Questions and Answers to Certain Questions on Initial Business", question 47 answers the situation related to the outsourcing of labor services of the initial enterprise: "Question 47, the outsourcing of labor services of the initial enterprise, what aspects should the intermediary focus on? A: Some of the first-time enterprises have handed over more labor activities to specialized labor outsourcing companies for implementation. Intermediary agencies should pay full attention to the following aspects:(1) the legal compliance of the labor service companies, such as whether they are independent entities, whether they have the necessary professional qualifications, whether the business implementation and personnel management comply with relevant laws and regulations, the background of the business transactions between the issuer and the issuer and whether there are major risks;(2) whether the labor service company specializes or mainly serves the issuer, if there is a situation that mainly serves the issuer, attention should be paid to its reasonableness and necessity, and whether the identification and disclosure of related relationships are true, accurate and complete. Intermediary agencies shall check such situations according to the relevant requirements of related parties from the perspective of substance over form, and especially consider the impact of their operating results on the issuer's financial data and whether the issuer meets the issuance conditions;(3) The composition and changes of the labor service company, the main contents of the labor service outsourcing contract, whether the changes in the number of labor services and expenses match the issuer's operating performance, whether the pricing of labor costs is fair and whether there is an inter-period accounting situation. Intermediaries should make full arguments on the above aspects and express clear opinions." In recent years, when the CSRC approves the listing of enterprises, many enterprises are required to disclose or explain the outsourcing of labor services in their feedback. We are concerned that the main businesses of these enterprises that are required to give feedback on labor outsourcing are different, and the industries are distributed in the fields of construction, building materials and chemical industry, computer, logistics and transportation. In general, the outsourcing is mostly engineering construction work, and it is non-critical and auxiliary business. The primary concern of the CSRC is whether the intermediary agencies disclose the labor outsourcing truthfully, especially when the labor outsourcing costs account for a relatively high proportion or pose a significant risk to the issuer's business, the intermediary agencies are required to disclose the relevant information in detail according to the principle of "substance is more important than form", not only the specific situation of the labor outsourcing business and the reasons for outsourcing, the specific circumstances of the labor outsourcing unit should also be disclosed. 2. what is labor dispatch? According to the provisions of the the People's Republic of China Labor Contract Law (2012 Amendment) and the Interim Provisions on Labor Dispatch, labor dispatch refers to the labor dispatch unit with the qualification of labor dispatch business to conclude a labor contract with the laborer, and the labor dispatch unit then signs a labor dispatch agreement with the employing unit that needs the laborer. Finally, the labor dispatch unit sends the laborer to the employing unit to work. As a flexible way of employment, labor dispatch is usually used by enterprises to solve the problem of labor shortage, which can effectively save the labor cost of labor enterprises, especially in some labor-intensive enterprises. Its basic legal relationship is shown in the following figure: The Interim Provisions on Labor Dispatch stipulate that labor dispatch can only be implemented in temporary, auxiliary or alternative jobs: temporary jobs refer to jobs that last no more than 6 months; auxiliary jobs refer to non-main business jobs that provide services for main business jobs; alternative jobs refer to a certain period of time when the workers of the employing unit are unable to work due to off-duty study, vacation and other reasons, jobs that can be replaced by other workers. And the employing unit shall strictly control the number of dispatched workers, and the number of dispatched workers shall not exceed 10% of the total number of workers. In the practice of enterprise IPO, the employment method of labor dispatch is more common in labor-intensive enterprises. At the same time, in order to prevent the issuer from failing to sign labor dispatch contracts in accordance with the law and damage the legitimate rights and interests of dispatched employees during the reporting period, in the IPO declaration process, labor dispatch is often one of the issues that regulators focus on. 3. the difference between the two and audit points From the foregoing analysis, it follows that labor dispatch is a moderate separation of employment and use, and that labor outsourcing does not involve a separation of employment and use. That is, under the employment form of labor dispatch, the employing unit transfers the right to establish labor relations, but does not transfer the right to manage things and people. The labor of workers is completed under the supervision and management of the employing unit and is managed by the employing unit. In addition, in the actual operation process, we are concerned that the regulatory authorities in the filing process of the proposed IPO enterprises on the two audit points have the following differences: 1. The common audit concerns of regulatory agencies on labor outsourcing in the IPO declaration process are as follows:(1) whether the information disclosure is sufficient;(2) Independent judgment: comprehensively judge whether the enterprise has significant dependence on labor outsourcing suppliers and analyze the impact on the independence of the issuer;(3) Internal control: pay attention to the internal control and risk control measures related to the labor outsourcing link of the issuer;(4) The determination of labor outsourcing and labor dispatch: the situation of "false outsourcing, real dispatch" is more concerned. 2. The common audit concerns of regulatory agencies on labor dispatch issues during the IPO declaration process are as follows:(1) Whether the labor dispatch unit has an associated relationship with the issuer, and whether the related transactions are legal and compliant;(2) Whether all links of labor dispatch comply with The provisions of laws and regulations, whether there are circumstances that damage the legitimate rights and interests of workers;(3) Whether there are major violations or the risk of being punished. In summary, labor and employment compliance is an important part of corporate compliance operations and a basic requirement for companies to go public. Therefore, for the employment of enterprises, we should pay attention to the provisions of relevant laws and regulations, implement and arrange the corresponding production and operation plans in accordance with the relevant provisions of laws and regulations on labor dispatch and labor outsourcing, and not only ensure that the employment mode, number of people, posts, etc. meet the restrictions of relevant laws and regulations, but also examine the qualifications of the other party, it is not allowed to deliberately evade the obligations of the employer by means of labor dispatch or labor outsourcing. As for the intermediary agencies, they should judge the actual employment nature of the enterprise from the principle of "substance is more important than form", rather than simply judging according to the contract form signed by the enterprise. For the situation that the essence belongs to labor dispatch and there are violations, it should be regulated in time to avoid obstacles in the process of listing audit and affect the progress of listing.

2021-12-16