Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People`s Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People`s Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
Fa Shi [2020] No.18
December 29, 2020
The Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property, adopted at the 1823rd meeting of the Judicial Committee of the Supreme People's Court on December 23, 2020, is hereby promulgated for implementation as of January 1, 2021.
Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
(Adopted at the 1823rd meeting of the Judicial Committee of the Supreme People's Court on December 23, 2020 and implemented as of January 1, 2021)
Twenty-nine judicial interpretations including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property are revised as follows in light of the needs of judicial practice and according to the decision made at the 1823rd meeting of the Judicial Committee of the Supreme People's Court:
I. Revising the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
1. Article 1 is revised to read:
"In accordance with Item 3, Paragraph 1 of Article 58 of the Land Administration Law of the People's Republic of China and Article 47 of the Interim Regulations of the People's Republic of China on the Assignment and Transfer of the Rights to the Use of State-owned Urban Land, the right to use state-owned land obtained by an insolvent enterprise through allotment shall not be considered to be insolvent property and the relevant people's government may take back and dispose of the land when the enterprise declares bankruptcy. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council."
2. Article 2 is revised to read:
"Enterprises have no right to dispose of the right to use state-owned land that it has obtained through allotment. If it is to create any mortgage with the right to use the state-owned land, the effectiveness of the mortgage contract will not be affected without approval from the people's government or land administrative department with the authority of examination and approval. If the statutory examination and approval procedures are handled and the mortgage is registered in accordance with the law, the mortgage right shall be established upon registration. In accordance with Article 51 of the Law of the People's Republic of China on the Administration of Urban Real Estate, a mortgagee has the preferential rights to be paid off with the proceeds incurred from the conversion of the mortgaged property or from the auction or sale of the mortgaged property, after paying the corresponding transfer fee of the land use rights according to the law. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council."
3. Article 3 is revised to read:
"Where state-owned enterprises create mortgages on key equipment, complete sets of equipment, and buildings, if there is no other circumstance of statutory invalidity, the mortgage contracts shall not be deemed invalid only on the ground that they have not been approved by the competent government authority."
II. Revising the Several Provisions of the Supreme People's Court on Trying Cases of Disputes over Deposit Certificates
1. The introduction is revised to read:
"In order to correctly try cases of disputes over deposit certificates, the Provisions are formulated in accordance with the Civil Code of the People's Republic of China and on the basis of summarizing trial experience."
2. Article 3 is revised to read:
"Acceptance and suspension of cases of disputes over deposit certificates
If a party to a case of disputes over deposit certificates files a lawsuit with a people's court, the people's court shall review the case in accordance with Article 119 of the Civil Procedure Law of the People's Republic of China, and accept the case if it meets the requirements.
After the people's court accepts the case of disputes over deposit certificates, if it finds evidence of criminality, it shall promptly notify the public security or procuratorial organ in writing of the same. Where a party to the case of disputes over deposit certificates is investigated by a state organ for forging, altering or falsely issuing a deposit certificate or for being suspected of fraud, if the case needs cannot be heard until the criminal case is closed, the people's court shall suspend the trial. Where the investigation of the criminal responsibility of the relevant party to the case of disputes over deposit certificates does not affect the trial of the case, the people's court shall promptly determine whether the relevant party shall bear civil liability and the extent of such civil liability and deal with the same in accordance with the law."
3. Article 4 shall be revised to read:
"Jurisdiction of cases of disputes over deposit certificates
In accordance with Article 23 of the Civil Procedure Law of the People's Republic of China, a case of disputes over deposit certificates shall be under the jurisdiction of the people's court in the place of the defendant's domicile or the people's court in the domicile of the financial institution which has issued the deposit certificate, receipt of bills and statements, or has signed a deposit contract with the party concerned. If the place of domicile is inconsistent with the place of habitual residence, the case shall be under the jurisdiction of the people's court of the place of habitual residence."
III. Revising the Provisions of the Supreme People's Court on Hearing Cases of Disputes Concerning Enterprises That Are Handed over and Revoked by the Army, Armed Police Forces, Political and Legal Organs, and Enterprises Separated from Party and Government Organs
1. The introduction is revised to read:
"In order to correctly hear debt dispute and bankruptcy cases of enterprises that are handed over and revoked by the army, armed police forces, political and legal organs, and enterprises separated from party and government organs, the following provisions are made in accordance with the Civil Code of the People's Republic of China, the Company Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China and the Enterprise Bankruptcy Law of the People's Republic of China:"
2. Article 1 is revised to read:
"Where an enterprise established by the army, an armed police force, a political and legal organ, or a party and government organ (the 'established enterprise') is qualified as a legal person and has obtained a business license for an enterprise legal person, it shall, in accordance with Article 60 of the Civil Code, independently bear civil liability to the extent of its entire property."
3. Article 2 is revised to read:
"Where an established enterprise has obtained the business license for an enterprise legal person, although the capital actually invested in is inconsistent with the registered capital, and it has reached the amount specified in Item 7 of Article 12 of the Detailed Rules for the Implementation of the Administrative Regulations of the People's Republic of China on the Registration of Enterprise Legal Persons, it shall be deemed to be qualified as a legal person, and the establisher shall bear civil liability to the extent of the difference between the capital actually invested in by the enterprise and the registered capital."
4. Article 3 is revised to read:
"Although an established enterprise has obtained the business license for an enterprise legal person, and the capital invested in has not reached the amount specified in Item 7 of Article 12 of the Detailed Rules for the Implementation of the Administrative Regulations of the People's Republic of China on the Registration of Enterprise Legal Persons, or it does not meet the other requirements for being an enterprise legal person, it shall be deemed to be disqualified as a legal person, and the establisher shall bear civil liability."
5. Articles 4, 6, 8, 9, 14, and 16 are deleted.
6. Article 7 is revised to read:
"When the established enterprise is dissolved, if the establisher or its competent department issues to the administrative department for industry and commerce a certification document, indicating that it voluntarily assumes responsibility for the debts of the established enterprise, it shall bear civil liability for the debts of the established enterprise as promised."
7. Article 13 is revised to read:
"Where an established enterprise raises funds from society or from its internal employees but has not paid off such funds, when its property is distributed after the bankruptcy, such funds shall be repaid in accordance with Item 1, Paragraph 1 of Article 113 of the Enterprise Bankruptcy Law of the People's Republic of China."
8. The order of provisions is adjusted accordingly.
IV. Revising the Provisions of the Supreme People's Court on Hearing Civil Cases Concerning Enterprise Restructuring
1. The introduction is revised to read:
"The Provisions are formulated for the purpose of correctly hearing cases of civil dispute related to enterprise restructuring, in accordance with the provisions of the Civil Code of the People's Republic of China, the Company Law of the People's Republic of China, the Law of the People's Republic of China on Industrial Enterprises Owned by the Whole People, the Civil Procedure Law of the People's Republic of China and other laws and regulations and in light of judicial practice."
2. Article 2 is revised to read:
"Where a party files a lawsuit in compliance with the circumstances listed in Article 1 hereof, and in compliance with the conditions provided in Article 119 of the Civil Procedure Law, the people's court shall accept the case."
3. Article 19 is revised to read:
"Where in selling an enterprise, the seller's activities are under circumstances provided in laws and the buyer exercises its rights of rescission within the statutory period, the people's court shall be in favor of the buyer."
4. Article 29 is revised to read:
"Where the selling of an enterprise is under the circumstances provided in Articles 538 and 539 of the Civil Code and the creditor exercises the right of rescission within the statutory period, the people's court shall be in favor of the creditor."
5. Article 32 is deleted.
6. The order of provisions is adjusted accordingly.
V. Revising the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II)
1. Article 2 is revised to read:
"Where any shareholder of a company initiates a company dissolution action in a people's court and at the same time submits an application to the people's court for liquidation of the company, the people's court shall not accept the liquidation application submitted by the shareholder. The people's court may advise the relevant plaintiff to liquidate the company himself or otherwise apply to the relevant people's court for liquidation of the company after the people's court renders a judgment of dissolution, subject to Article 70 of the Civil Code, Article 183 of the Company Law and Article 7 hereof."
2. Article 7 is revised to read:
"A company shall, in accordance with the provisions of Article 70 of the Civil Code and Article 183 of the Company Law, establish a liquidation group within fifteen days of the occurrence of any cause for dissolution and commence liquidation itself.
Where, under any of the following circumstances, any creditor, shareholder or other interested parties of the company applies to a people's court for designation of a liquidation team, the people's court shall accept the application:
1. where, upon the dissolution of the company, no liquidation group is established to carry out the relevant liquidation work;
2. where a liquidation group has been established, but the liquidation group willfully delays carrying out the relevant liquidation work; or
3. where any illegal act in the liquidation of the company severely threatens the interests of creditors or shareholders of the company."
3. Article 9 is revised to read:
"Under any of the following circumstances, a people's court may, on the basis of an application by any creditor, shareholder, director or other interested parties of the relevant company or in accordance with its power, change any member of a liquidation group it designates:
1. where the member acts in violation of laws or administrative regulations;
2. where the member loses the relevant practicing competency or civil capacity; or
3. where the member acts in any way which severely harms the interests of the company or its creditors."
4. Article 15 is revised to read:
"Where a company carries out the relevant liquidation work itself, the relevant liquidation proposal shall be submitted to a meeting of the shareholders of the company or a general meeting of the shareholders thereof for confirmation. Where a people's court organizes the liquidation of a company, the relevant liquidation proposal shall be submitted to the people's court for confirmation. A liquidation group for a company shall not implement a liquidation proposal that is not confirmed.
Where a company, shareholder, director, other interested parties of the company or any creditor asserts that members of a liquidation group shall be liable for any loss suffered by the company or any such creditor as a result of the implementation of an unconfirmed liquidation proposal, a people's court shall support the assertion in accordance with the law."
5. Article 21 is revised to read:
"Where the shareholders of a limited liability company, directors and controlling shareholders of a joint-stock company, or the actual controller of the company that should bear civil liabilities in accordance with Article 18 and Paragraph 1 of Article 20 hereof are two persons or more, and after one or several such persons bear civil liabilities in accordance with the law, they assert that other persons shall bear the liabilities in light of the extent of their respective faults, a people's court shall support the assertion in accordance with the law."
VI. Revising the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (III)
1. Article 2 is revised to read:
"Where promoters enter into contracts with external parties in their own names for the purpose of establishing a company, the relevant people's courts shall uphold the claims of the other parties to the contracts that such promoters shall bear contractual obligations; the relevant people's courts shall uphold the claims of the other parties to the contracts that such company shall bear contractual obligations after the establishment of the company."
2. Article 7 is revised to read:
"Where a capital contributor makes a contribution with property which it has no right to dispose of, and the parties concerned have a dispute over the validity of the act of contribution, the relevant people's court may determine the case by reference to the provisions of Article 311 of the Civil Code.
Where equity interest is obtained with contributions made with monies earned from illegal acts or crimes such as corruption, bribery, encroachment or misappropriation, the equity interest shall be disposed of by way of auction or sale when the illegal acts or crimes are investigated and penalized."
3. Article 24 is revised to read:
"Where the real capital contributor and the nominal capital contributor of a limited liability company enter into a contract, agreeing that the real capital contributor shall make a capital contribution and enjoy investment rights and interests and the nominal capital contributor shall be the nominal shareholder, and the real capital contributor and the nominal capital contributor have a dispute over the validity of the contract, the people's court shall hold the contract valid in the event that no circumstance of invalidity specified by laws exists.
Where the real capital contributor and nominal shareholder prescribed in the foregoing paragraph have a dispute over the title to investment rights and interests, and the real capital contributor claims rights against the nominal shareholder on the ground that it has actually fulfilled the obligation of capital contribution, the people's court shall uphold such claim; in the event that the nominal shareholder denies the rights of the real capital contributor by reason of the records in the company shareholder register or register of the company registration authority, the people's court shall not uphold such claim.
Where the real capital contributor, without the consent of the majority of the other shareholders of the company, claims that the company should alter its shareholders, issue a capital contribution certificate, record it in the shareholder register or record it in the articles of association or handle registration with the company registration authority, the people's court shall not uphold such claim."
4. Article 25 is revised to read:
"Where the nominal shareholder transfers, pledges or otherwise disposes of the equity registered under its name and the real capital contributor claims that such disposition of equity is invalid on the ground that it has actual rights to the equity, the people's court may handle the case in accordance with the provisions of Article 311 of the Civil Code mutatis mutandis.
Where the equity transfer by the nominal shareholder causes losses to the real capital contributor, and the real capital contributor claims against the nominal shareholder to bear responsibility of compensation, the people's court shall uphold such claim."
5.
......
Fa Shi [2020] No.18
December 29, 2020
The Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property, adopted at the 1823rd meeting of the Judicial Committee of the Supreme People's Court on December 23, 2020, is hereby promulgated for implementation as of January 1, 2021.
Decision of the Supreme People's Court on Revising 29 Judicial Interpretations on Commercial Cases Including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
(Adopted at the 1823rd meeting of the Judicial Committee of the Supreme People's Court on December 23, 2020 and implemented as of January 1, 2021)
Twenty-nine judicial interpretations including the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property are revised as follows in light of the needs of judicial practice and according to the decision made at the 1823rd meeting of the Judicial Committee of the Supreme People's Court:
I. Revising the Official Reply of the Supreme People's Court on Whether the Land Use Right of the Allotted State-Owned Land of a Bankrupt Enterprise Shall Be Listed as Insolvent Property
1. Article 1 is revised to read:
"In accordance with Item 3, Paragraph 1 of Article 58 of the Land Administration Law of the People's Republic of China and Article 47 of the Interim Regulations of the People's Republic of China on the Assignment and Transfer of the Rights to the Use of State-owned Urban Land, the right to use state-owned land obtained by an insolvent enterprise through allotment shall not be considered to be insolvent property and the relevant people's government may take back and dispose of the land when the enterprise declares bankruptcy. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council."
2. Article 2 is revised to read:
"Enterprises have no right to dispose of the right to use state-owned land that it has obtained through allotment. If it is to create any mortgage with the right to use the state-owned land, the effectiveness of the mortgage contract will not be affected without approval from the people's government or land administrative department with the authority of examination and approval. If the statutory examination and approval procedures are handled and the mortgage is registered in accordance with the law, the mortgage right shall be established upon registration. In accordance with Article 51 of the Law of the People's Republic of China on the Administration of Urban Real Estate, a mortgagee has the preferential rights to be paid off with the proceeds incurred from the conversion of the mortgaged property or from the auction or sale of the mortgaged property, after paying the corresponding transfer fee of the land use rights according to the law. In regard to state-owned enterprises that have been brought into the acquisition and bankruptcy plan of the state, the right to use the state-owned land obtained thereby according to the law shall be dealt with pursuant to the relevant documents of the State Council."
3. Article 3 is revised to read:
"Where state-owned enterprises create mortgages on key equipment, complete sets of equipment, and buildings, if there is no other circumstance of statutory invalidity, the mortgage contracts shall not be deemed invalid only on the ground that they have not been approved by the competent government authority."
II. Revising the Several Provisions of the Supreme People's Court on Trying Cases of Disputes over Deposit Certificates
1. The introduction is revised to read:
"In order to correctly try cases of disputes over deposit certificates, the Provisions are formulated in accordance with the Civil Code of the People's Republic of China and on the basis of summarizing trial experience."
2. Article 3 is revised to read:
"Acceptance and suspension of cases of disputes over deposit certificates
If a party to a case of disputes over deposit certificates files a lawsuit with a people's court, the people's court shall review the case in accordance with Article 119 of the Civil Procedure Law of the People's Republic of China, and accept the case if it meets the requirements.
After the people's court accepts the case of disputes over deposit certificates, if it finds evidence of criminality, it shall promptly notify the public security or procuratorial organ in writing of the same. Where a party to the case of disputes over deposit certificates is investigated by a state organ for forging, altering or falsely issuing a deposit certificate or for being suspected of fraud, if the case needs cannot be heard until the criminal case is closed, the people's court shall suspend the trial. Where the investigation of the criminal responsibility of the relevant party to the case of disputes over deposit certificates does not affect the trial of the case, the people's court shall promptly determine whether the relevant party shall bear civil liability and the extent of such civil liability and deal with the same in accordance with the law."
3. Article 4 shall be revised to read:
"Jurisdiction of cases of disputes over deposit certificates
In accordance with Article 23 of the Civil Procedure Law of the People's Republic of China, a case of disputes over deposit certificates shall be under the jurisdiction of the people's court in the place of the defendant's domicile or the people's court in the domicile of the financial institution which has issued the deposit certificate, receipt of bills and statements, or has signed a deposit contract with the party concerned. If the place of domicile is inconsistent with the place of habitual residence, the case shall be under the jurisdiction of the people's court of the place of habitual residence."
III. Revising the Provisions of the Supreme People's Court on Hearing Cases of Disputes Concerning Enterprises That Are Handed over and Revoked by the Army, Armed Police Forces, Political and Legal Organs, and Enterprises Separated from Party and Government Organs
1. The introduction is revised to read:
"In order to correctly hear debt dispute and bankruptcy cases of enterprises that are handed over and revoked by the army, armed police forces, political and legal organs, and enterprises separated from party and government organs, the following provisions are made in accordance with the Civil Code of the People's Republic of China, the Company Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China and the Enterprise Bankruptcy Law of the People's Republic of China:"
2. Article 1 is revised to read:
"Where an enterprise established by the army, an armed police force, a political and legal organ, or a party and government organ (the 'established enterprise') is qualified as a legal person and has obtained a business license for an enterprise legal person, it shall, in accordance with Article 60 of the Civil Code, independently bear civil liability to the extent of its entire property."
3. Article 2 is revised to read:
"Where an established enterprise has obtained the business license for an enterprise legal person, although the capital actually invested in is inconsistent with the registered capital, and it has reached the amount specified in Item 7 of Article 12 of the Detailed Rules for the Implementation of the Administrative Regulations of the People's Republic of China on the Registration of Enterprise Legal Persons, it shall be deemed to be qualified as a legal person, and the establisher shall bear civil liability to the extent of the difference between the capital actually invested in by the enterprise and the registered capital."
4. Article 3 is revised to read:
"Although an established enterprise has obtained the business license for an enterprise legal person, and the capital invested in has not reached the amount specified in Item 7 of Article 12 of the Detailed Rules for the Implementation of the Administrative Regulations of the People's Republic of China on the Registration of Enterprise Legal Persons, or it does not meet the other requirements for being an enterprise legal person, it shall be deemed to be disqualified as a legal person, and the establisher shall bear civil liability."
5. Articles 4, 6, 8, 9, 14, and 16 are deleted.
6. Article 7 is revised to read:
"When the established enterprise is dissolved, if the establisher or its competent department issues to the administrative department for industry and commerce a certification document, indicating that it voluntarily assumes responsibility for the debts of the established enterprise, it shall bear civil liability for the debts of the established enterprise as promised."
7. Article 13 is revised to read:
"Where an established enterprise raises funds from society or from its internal employees but has not paid off such funds, when its property is distributed after the bankruptcy, such funds shall be repaid in accordance with Item 1, Paragraph 1 of Article 113 of the Enterprise Bankruptcy Law of the People's Republic of China."
8. The order of provisions is adjusted accordingly.
IV. Revising the Provisions of the Supreme People's Court on Hearing Civil Cases Concerning Enterprise Restructuring
1. The introduction is revised to read:
"The Provisions are formulated for the purpose of correctly hearing cases of civil dispute related to enterprise restructuring, in accordance with the provisions of the Civil Code of the People's Republic of China, the Company Law of the People's Republic of China, the Law of the People's Republic of China on Industrial Enterprises Owned by the Whole People, the Civil Procedure Law of the People's Republic of China and other laws and regulations and in light of judicial practice."
2. Article 2 is revised to read:
"Where a party files a lawsuit in compliance with the circumstances listed in Article 1 hereof, and in compliance with the conditions provided in Article 119 of the Civil Procedure Law, the people's court shall accept the case."
3. Article 19 is revised to read:
"Where in selling an enterprise, the seller's activities are under circumstances provided in laws and the buyer exercises its rights of rescission within the statutory period, the people's court shall be in favor of the buyer."
4. Article 29 is revised to read:
"Where the selling of an enterprise is under the circumstances provided in Articles 538 and 539 of the Civil Code and the creditor exercises the right of rescission within the statutory period, the people's court shall be in favor of the creditor."
5. Article 32 is deleted.
6. The order of provisions is adjusted accordingly.
V. Revising the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (II)
1. Article 2 is revised to read:
"Where any shareholder of a company initiates a company dissolution action in a people's court and at the same time submits an application to the people's court for liquidation of the company, the people's court shall not accept the liquidation application submitted by the shareholder. The people's court may advise the relevant plaintiff to liquidate the company himself or otherwise apply to the relevant people's court for liquidation of the company after the people's court renders a judgment of dissolution, subject to Article 70 of the Civil Code, Article 183 of the Company Law and Article 7 hereof."
2. Article 7 is revised to read:
"A company shall, in accordance with the provisions of Article 70 of the Civil Code and Article 183 of the Company Law, establish a liquidation group within fifteen days of the occurrence of any cause for dissolution and commence liquidation itself.
Where, under any of the following circumstances, any creditor, shareholder or other interested parties of the company applies to a people's court for designation of a liquidation team, the people's court shall accept the application:
1. where, upon the dissolution of the company, no liquidation group is established to carry out the relevant liquidation work;
2. where a liquidation group has been established, but the liquidation group willfully delays carrying out the relevant liquidation work; or
3. where any illegal act in the liquidation of the company severely threatens the interests of creditors or shareholders of the company."
3. Article 9 is revised to read:
"Under any of the following circumstances, a people's court may, on the basis of an application by any creditor, shareholder, director or other interested parties of the relevant company or in accordance with its power, change any member of a liquidation group it designates:
1. where the member acts in violation of laws or administrative regulations;
2. where the member loses the relevant practicing competency or civil capacity; or
3. where the member acts in any way which severely harms the interests of the company or its creditors."
4. Article 15 is revised to read:
"Where a company carries out the relevant liquidation work itself, the relevant liquidation proposal shall be submitted to a meeting of the shareholders of the company or a general meeting of the shareholders thereof for confirmation. Where a people's court organizes the liquidation of a company, the relevant liquidation proposal shall be submitted to the people's court for confirmation. A liquidation group for a company shall not implement a liquidation proposal that is not confirmed.
Where a company, shareholder, director, other interested parties of the company or any creditor asserts that members of a liquidation group shall be liable for any loss suffered by the company or any such creditor as a result of the implementation of an unconfirmed liquidation proposal, a people's court shall support the assertion in accordance with the law."
5. Article 21 is revised to read:
"Where the shareholders of a limited liability company, directors and controlling shareholders of a joint-stock company, or the actual controller of the company that should bear civil liabilities in accordance with Article 18 and Paragraph 1 of Article 20 hereof are two persons or more, and after one or several such persons bear civil liabilities in accordance with the law, they assert that other persons shall bear the liabilities in light of the extent of their respective faults, a people's court shall support the assertion in accordance with the law."
VI. Revising the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (III)
1. Article 2 is revised to read:
"Where promoters enter into contracts with external parties in their own names for the purpose of establishing a company, the relevant people's courts shall uphold the claims of the other parties to the contracts that such promoters shall bear contractual obligations; the relevant people's courts shall uphold the claims of the other parties to the contracts that such company shall bear contractual obligations after the establishment of the company."
2. Article 7 is revised to read:
"Where a capital contributor makes a contribution with property which it has no right to dispose of, and the parties concerned have a dispute over the validity of the act of contribution, the relevant people's court may determine the case by reference to the provisions of Article 311 of the Civil Code.
Where equity interest is obtained with contributions made with monies earned from illegal acts or crimes such as corruption, bribery, encroachment or misappropriation, the equity interest shall be disposed of by way of auction or sale when the illegal acts or crimes are investigated and penalized."
3. Article 24 is revised to read:
"Where the real capital contributor and the nominal capital contributor of a limited liability company enter into a contract, agreeing that the real capital contributor shall make a capital contribution and enjoy investment rights and interests and the nominal capital contributor shall be the nominal shareholder, and the real capital contributor and the nominal capital contributor have a dispute over the validity of the contract, the people's court shall hold the contract valid in the event that no circumstance of invalidity specified by laws exists.
Where the real capital contributor and nominal shareholder prescribed in the foregoing paragraph have a dispute over the title to investment rights and interests, and the real capital contributor claims rights against the nominal shareholder on the ground that it has actually fulfilled the obligation of capital contribution, the people's court shall uphold such claim; in the event that the nominal shareholder denies the rights of the real capital contributor by reason of the records in the company shareholder register or register of the company registration authority, the people's court shall not uphold such claim.
Where the real capital contributor, without the consent of the majority of the other shareholders of the company, claims that the company should alter its shareholders, issue a capital contribution certificate, record it in the shareholder register or record it in the articles of association or handle registration with the company registration authority, the people's court shall not uphold such claim."
4. Article 25 is revised to read:
"Where the nominal shareholder transfers, pledges or otherwise disposes of the equity registered under its name and the real capital contributor claims that such disposition of equity is invalid on the ground that it has actual rights to the equity, the people's court may handle the case in accordance with the provisions of Article 311 of the Civil Code mutatis mutandis.
Where the equity transfer by the nominal shareholder causes losses to the real capital contributor, and the real capital contributor claims against the nominal shareholder to bear responsibility of compensation, the people's court shall uphold such claim."
5.
......