How to deal with the company s capital reduction claims and debts

1. It is necessary to distinguish the nature of the enterprise and whether it is a legal person enterprise.

Except for corporate enterprises, other unincorporated enterprises bear unlimited liability to the outside world, such as private sole proprietorship enterprises and partnership enterprises, where investors or partners bear unlimited liability for repayment to creditors. Therefore, regardless of whether these enterprises reduce their registered capital, it will not affect the solvency of the corporate investors. On the contrary, a legal person enterprise bears limited liability to creditors to the extent of the assets owned by the enterprise, and if the registered capital of a legal person enterprise is reduced, it will inevitably weaken the ability of the enterprise to repay its debts and objectively damage the interests of creditors.

2. The company's capital reduction must occur after the creditor's rights.

If the act of reducing the registered capital is before the debt is incurred, then this act does not need to bear civil liability. Because the creditor has established a new trust to conduct business with the enterprise, the claim at this time is based on the changed registered capital. Conversely, if the reduction of registered capital occurs after the debt has been formed, it may be held liable for such an act.

Because the creditor's business with the enterprise is based on the trust in all the assets of the enterprise, including the original registered capital of the enterprise, the registered capital is reduced, the degree of trust is reduced, and the solvency is also reduced.

3. Whether the company has fulfilled its obligation to notify known creditors in the capital reduction.

In order to protect the rights of creditors, the Company Law also clearly stipulates the legal procedures and restrictions for the reduction of a company's capital. That is, the company shall notify creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within 30 days. Within 30 days from the date of receipt of the notice, and within 45 days from the date of announcement if the creditor has not received the notice, the creditor has the right to require the company to pay off the debts or provide corresponding guarantees.

The registered capital of the company after capital reduction shall not be lower than the statutory minimum limit. The above-mentioned direct notification obligation refers to the known creditors at the time of the capital reduction resolution against the company, and the announcement notification obligation refers to the unknown creditors at the time of the capital reduction resolution against the company.

If the company fails to notify the creditors of the capital reduction, resulting in the creditors losing the right to require the company to repay debts or provide guarantees in a timely manner in accordance with the provisions of the Company Law, the capital reduction of the company's shareholders has no antagonistic effect against the creditors. If the creditor is notified of the company's capital reduction in accordance with the statutory procedures, and the creditor fails to exercise its rights in a timely manner, the creditor cannot claim its rights against the company or shareholders on this ground afterwards.

4. Clarify the role of the company's registered capital on the company's creditors.

The second paragraph of Article 180 of the Company Law of the People's Republic of China stipulates that the company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper at least three times within 30 days. Within 10 days from the date of receipt of the notice, and within 90 days from the date of the first announcement if the creditor does not receive the notice, the creditor has the right to require the company to repay the debts or provide corresponding guarantees.

If an enterprise legal person fails to provide security for the debts formed by the creditor before the reduction of the registered capital as required by the creditor when reducing the registered capital, then the beneficiary of the reduction of the registered capital, i.e., the investor (or the competent authority), shall bear civil legal liability. At this time, the company's creditors should clarify the channels and objects of rights and remedies.

According to the second paragraph of Article 177 of the Company Law, the company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within 30 days. Within 30 days from the date of receipt of the notice, and within 45 days from the date of announcement if the creditor has not received the notice, the creditor has the right to require the company to repay the debts or provide corresponding guarantees.

Therefore, when the creditor encounters a capital reduction from the company, it shall require the company to repay the debts or provide corresponding guarantees within 45 days from the date of the announcement when the creditor encounters a capital reduction from the company, and if it does not receive the notice, it shall require the company to repay the debts or provide corresponding guarantees to protect its legitimate rights and interests.

(1) For the company's capital reduction, all creditors shall be notified in advance, and the creditors shall not object to the capital reduction before allowing the capital reduction;

2) Approved by the resolution of the shareholders' meeting and amending the articles of association;

3) The registered capital of the company after capital reduction shall not be lower than the minimum amount of statutory registered capital.