Liability Of Shareholders Of Limited Liability Companies For Improper Liquidation

China’s legislators and the Supreme Court havelaunched several provisions on company liquidation obligor in the Company Law andits judicial interpretation.These provisions covered the area of main body,obligationand civil liability of company liquidation obligor.The introduction of these Provisionseffectively filled in the vacancy of legislation and also acted as a strong guidance forliquidation trials.However,the focus of relevant laws and regulations of company liquidation obligors is too concentrated on the protection of creditors and the simplicity of practical operations,resulting in an objective situation of neglecting the protection of interests of small and medium shareholders of the company.At the same time,it is difficult to justify its theoretical basis and logical structure,resulting inambiguities and conflicts,which reflecting that the legislators have not yet got a consensus in this field.Many details still need to be explored and discussed.This article is divided into five chapters:The first chapter firstly sorts out China’s current regulations for shareholders of limited liability companies to perform liquidation obligations,and the Supreme Court’s division of different liquidation responsibilities;secondly,it collects and analyzes the judgments of higher courts in recent years,and finds outdifferent judiciallegal applicable attitudes about whether shareholders should be responsible for their improper actions in the event of liquidation,and the reasoning methods used in different judgments should be discussed to deepen our understanding of violations of liquidation obligations.The second chapter discusses the nature of the shareholders’ misbehaviors in liquidation.Through sorting out opinions of the academic community,five representative viewpoints are summarized:the denial of corporate personality,the infringement of claims,the obligation of faith,the concomitant obligation of contract,and the statutory responsibility.After expounding the reasons of each viewpoint and analyzing its merits and demerits,it is proposed that the author would define more reasonable views on the nature of the shareholders’ misbehavior in relation to liquidation.The third chapter discusses thatthe company’s liquidation obligor system stems from judicial practice,but the foundation of its legal theory is not solid.By analyzing the viewpoint of linking or equating the liability of the shareholders to the liquidation and the direct liability,it focuses on the differences between the two liabilities above.From the perspective of the connotation of responsibilities,applicable conditions and the purpose of the system,a detailed discussion was conducted to demonstrate that the confusion of the two responsibilities will increase the imbalance of interests between shareholders and creditors.The fourth chapter discusses the unreasonable rights allocation arrangements in the area of liquidation where shareholders have misbehaviors from the perspective of the scope of responsible persons,the form of responsibility and the distribution of proof providing.This will lead to the fact that the company’s small and medium shareholders or other entities that are not actually involved in the operation will assume their own rights.The unequal obligations are too harsh for the shareholders of limited liability companies and not conducive to encourage investment.It is suggested that the two forms of companies should be unified in terms of the scope of responsible persons.The joint responsibility should be applied cautiously,and the distribution of proof providing can be reversed.And shareholders are supposed to prove that there is no causal relationship.The fifth chapter discusses the possible direction of improvement in future,and discusses the need of improvement of existing regulations in combine with prominent issues in our country’s legislation and judicature.In order to achieve the unity of theory and internal logic,it is proposed to consider the introduction of a statutory liquidator system,and to make rational arrangement of relevant issues and regulations.