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Guiding case

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Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 260

Guiding Case No. 260: A Beijing Chaoyang Environmental Research Institute v. A Shanxi Aluminum Co., Ltd.

Settlement or mediation agreements in environmental public-interest litigation require substantive judicial review. Courts should approve them only when they concretely specify remediation measures, timetable, funding, acceptance procedures, and supervision sufficient to restore the damaged environment and eliminate risk.

Supreme People's Court 2025
Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 237

Guiding Case No. 237: Langxi Service Outsourcing Co., Ltd. v. Xu Moushen

When a platform enterprise or its labor contractor uses contracting or cooperation agreements, courts must examine the real working arrangement, including algorithmic rules, discipline, autonomy over workload, and pricing power. If the enterprise exercises dominant labor management, an employment relationship should be recognized.

Supreme People's Court 2024
Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 238

Guiding Case No. 238: Sheng Mouhuan v. A Jiangsu Network Technology Co., Ltd.

A platform enterprise cannot avoid labor-law scrutiny merely by requiring workers to register as sole proprietors before signing cooperation agreements. Where core business functions are subcontracted, courts should identify the enterprise most closely connected to the worker by examining actual management and remuneration arrangements.

Supreme People's Court 2024
Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 204

Guiding Case No. 204: Chongqing Municipal People's Procuratorate Fifth Branch v. Chongqing Yuhuang Power Equipment Manufacturing Co., Ltd. et al.

Courts may credit genuinely additional environmental retrofit costs against ecological-damage compensation where the retrofit goes beyond mandatory compliance and demonstrably reduces risk or emissions; ordinary compulsory compliance costs are not deductible.

Supreme People's Court 2023
Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 210

Guiding Case No. 210: Jiujiang Municipal People's Government v. Jiangxi Zhengpeng Environmental Protection Technology Co., Ltd., Hangzhou Lianxin Building Materials Co., Ltd., Li De et al.

A competent authority may sue remaining obligors after reaching a pre-suit ecological-damage settlement with only some parties, and the civil case need not await the outcome of parallel criminal proceedings if the facts are sufficiently proved. An actual controller who uses the company as the vehicle for illegal pollution disposal may be held jointly responsible with the company.

Supreme People's Court 2023
Corporate reorganization and form changes Guiding case Guiding Case No. 163

Guiding Case No. 163: Jiangsu Textile Industry (Group) Import & Export Co., Ltd. and Five Subsidiaries Substantive Consolidation Reorganization

Where affiliated companies display a high degree of commingling, separation of assets would be excessively costly, and separate proceedings would materially prejudice fair creditor recovery, courts may order substantive consolidation reorganization on application. After consolidation, inter-company claims are extinguished and assets are pooled for distribution in a single proceeding.

Supreme People's Court 2021
Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 174

Guiding Case No. 174: China Biodiversity Conservation and Green Development Foundation v. Yalong River Hydropower Development Co., Ltd.

When existing evidence and scientific analysis show that a project may damage endangered-plant habitat and thereby harm the public ecological interest, courts may order preventive measures and require the risk to be incorporated into the environmental impact assessment.

Supreme People's Court 2021
Corporate social responsibility and public-interest protection Guiding case Guiding Case No. 130

Guiding Case No. 130: Chongqing Municipal People's Government and Chongqing Liangjiang Volunteer Service Development Center v. Chongqing Zangjinge Property Management Co., Ltd. and Chongqing Shouxu Environmental Protection Technology Co., Ltd.

A licensed polluter that delegates waste treatment remains legally bound to ensure compliant operation. If it knows the contractor is discharging illegally and fails to stop or even facilitates the conduct, it bears joint liability for ecological damage.

Supreme People's Court 2020
Dissolution, liquidation, and veil piercing Guiding case Guiding Case No. 9

Guiding Case No. 9: Shanghai Cunliang Trading Co., Ltd. v. Jiang Zhidong, Wang Weiming et al.

Shareholders of a limited liability company, and directors and controlling shareholders of a company limited by shares, remain statutory liquidation obligors after business-license revocation and cannot avoid liability by claiming they lacked actual control or day-to-day management.

Supreme People's Court 2012

Reference case

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Corporate veil piercing Reference case Jiangsu Courts Case: shell switching and horizontal veil piercing

Reference Case: Metal Company v. A Trading Company, B Trading Company, et al.

In a 2026 case release on the Jiangsu Courts website, the Kunshan People's Court found horizontal veil piercing appropriate because three companies under one controller freely switched delivery-note and invoice names while the same team continued to place orders, reconcile accounts, receive goods, and use the steel. Two of the companies had no real premises, staff, or payment capacity and functioned as shells. The court therefore held the affiliated companies jointly liable, and also imposed liability on the sole shareholder of the one-person company for failure to prove separate assets.

Kunshan People's Court (Jiangsu Courts release) 2026
Legal representative, representative authority, and seal control Reference case 地方法院参考案例：挂名法定代表人人名章

Local Reference Case: Nominal Legal Representative Name Seal in Loan-Extension Contracts

A person's status as legal representative, combined with the appearance of that person's personal name seal on a loan-extension agreement, is insufficient by itself to prove voluntary assumption of the company's debt. Where a financial institution seeks to add a natural person as a co-borrower, it must independently verify identity and consent through face-to-face signing or an equivalent process. Without proof that the seal was used with real authorization or true assent, the nominal legal representative cannot be made jointly liable for the corporate debt.

Beijing Financial Court (local-court case reprinted by the Supreme People's Court) 2026
Related-party transactions and tunneling Reference case （2023）最高法知民终2444号

Yuyao Company v. Ningbo Company and Others: Patent Ownership and Senior-Management Loyalty

The SPC IP Tribunal clarified that where a senior manager operates competing affiliate businesses during tenure and uses the company's technology, personnel, and market resources to apply for patents for himself or related parties, thereby seizing business opportunities that should belong to the company, he seriously breaches both loyalty and non-compete duties. Patent rights obtained in this way lack a lawful foundation; where the patent is highly connected to the company's business and mainly developed with company resources, it may be treated as the manager's service invention and belong to the company.

Supreme People's Court Intellectual Property Tribunal 2026
Dissolution, liquidation, and veil piercing Reference case 湖北法院案例：以“存续式和解”化解强制清算僵局

Reference Case: Camel Group Co., Ltd.'s Application for Compulsory Liquidation of Hubei Camel Haixia New-Type Battery Co., Ltd.

When a company's business term has expired and shareholders are deadlocked over continuation versus liquidation, a court need not move immediately to terminal liquidation. If the company still has going-concern value and governance can be restored through clarification, hearings, charter amendments, and shareholder exit arrangements while protecting creditors, shareholders, and employees, the court may facilitate a continuation-oriented settlement in lieu of compulsory liquidation.

Supreme People's Court / Hubei Higher People's Court / Gucheng County People's Court 2025
Corporate veil piercing Reference case Database ID 2025-08-2-284-001

Reference Case: Wang Mouyue v. Xue Mouliang Liquidation Liability Dispute

A professional closure operator who acquires shares to help a business evade debts and then secures deregistration through a false liquidation report may be held civilly liable to creditors for the company’s unpaid obligations.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Corporate veil piercing Reference case Guangdong Model Case: License transfer and beneficiary-subsidiary liability

Reference Case: Building Materials Company v. Nanjing Construction Company, Guangdong Construction Company, et al.

In a Guangdong model case on private-economy protection, the Guangzhou Intermediate People's Court held that a parent construction company abused corporate separateness by transferring key licenses, technical staff, projects, and large amounts of cash to its subsidiary, creating a structure in which benefits accrued to one company while losses remained with the debtor. The court treated this as over-control justifying veil piercing and held the beneficiary subsidiary jointly liable for the construction debt.

Guangzhou Intermediate People's Court (Guangdong Courts Second Batch of Model Cases Supporting High-Quality Development of the Private Economy) 2025
Corporate social responsibility and public-interest protection Reference case Local Reference Case: HBV Carrier Hiring Discrimination

Reference Case: Li Mou v. Chongqing Business Company on Equal Employment Rights

Once an applicant makes a prima facie showing that they met the job requirements and was rejected only after an HBV-related screening while the employer continued recruiting for the same post, the burden shifts to the employer. Distinguishing against workers on health grounds unrelated to the intrinsic requirements of the job constitutes employment discrimination and gives rise to civil remedies including apology and emotional-distress damages.

Chongqing Fifth Intermediate People's Court (second instance, officially published case) 2025
Company registration and legal representative Reference case SPC Market-Access Model Case: Business-Scope Change Registration

Reference Case: Li Co. (China) Investment Ltd. v. Shanghai Municipal Administration for Market Regulation and the State Administration for Market Regulation

Where a proposed business-scope change involves financial-leasing activities subject to prior sectoral approval, the market regulator may require the applicant to first submit the necessary licensing document from the competent financial regulator before processing the registration change. Such supplementation notices, and administrative reconsideration decisions upholding them, clarify market-access boundaries and help control financial risk.

SPC First Group of Ten Model Cases on Market-Access Administrative Litigation 2025
Corporate veil piercing Reference case Guangdong Model Case: Salt-baked chicken industry veil piercing

Reference Case: Meizhou Jin Company Agency-Sales Contract Dispute

The Xingning People's Court held in a model case released by the Guangdong High Court that the shareholder-controlled affiliate and the operating company had lost separate personality because the controlling company arranged a nominee legal representative, controlled the operating company's seals and bank accounts, and shared offices and staff with it. The court therefore pierced the corporate veil and ordered the operating company to pay the outstanding price and interest, with the controlling affiliate jointly liable.

Xingning People's Court (Guangdong Courts Model Cases for the "Hundreds, Thousands and Tens of Thousands Project", Batch II) 2025
Capital contribution and capital maintenance Reference case Database ID 2023-08-2-084-028

Reference Case: Beijing Building Materials Company v. Beijing Technology Company and Ma et al.

A shareholder may set off a due debt owed by the company against contribution obligations only if the articles are duly amended, the company has sufficient solvency, and the change is properly filed; otherwise the set-off cannot defeat the claims of company creditors.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Company registration and legal representative Reference case SPC Market-Access Model Case: Extra Conditions for Establishment Registration

Reference Case: Anhui Spring Auto Sales Company v. Mengcheng County Market Supervision Administration

At the company-establishment registration stage, the registrar should generally examine only the statutory registration materials. Once the applicant has provided documents proving the right to use the proposed company domicile, the authority may not add extra conditions based on land-use or planning suitability for the intended business and reject registration on that basis.

SPC First Group of Ten Model Cases on Market-Access Administrative Litigation 2025
Listed-company governance Reference case 2025年一审判决；ST路通资金占用追偿案

China Securities Investor Services Center's Derivative Recovery Case over ST Lutuong's Fund Occupation

Official reporting reposted on China Investor Network states that during the ST Lutuong litigation, the investor-protection institution pushed the occupier to repay about ninety percent of the misappropriated funds, after which the first-instance court ordered return of the remaining roughly RMB 8.7 million plus interest and imposed joint and several liability on responsible directors, supervisors, and executives at the levels of 100%, 70%, and 50%. The significance of the case lies not only in requiring the actual occupier to repay, but also in tiering liability among the key insiders by degree of participation and fault.

First-instance court (summarized in a China Investor Network repost of Shanghai Securities News) 2025
Listed-company governance Reference case 2025年5月诉中调解结案；太安退资金占用代位追偿案

China Securities Investor Services Center on Behalf of Tai'an Delisted Company v. the Controlling Shareholder, Actual Controller, and Responsible Directors/Executives

The CSRC's 2025 investor-protection typical cases report shows that Tai'an Delisted Company's controlling shareholder had long non-operationally occupied company funds. In September 2024, the investor-protection institution filed a derivative action on the company's behalf against the controlling shareholder, actual controller, and responsible directors/executives. With continued judicial and institutional pressure, the occupier fully repaid principal and interest totaling RMB 572 million in April 2025 through a share-transfer and assumption structure, after which the court closed the matter by in-litigation mediation in May 2025 and returned the full filing fee prepaid by the investor-protection institution, illustrating a post-delisting recovery path against the key insiders.

Shanghai No. 2 Intermediate People's Court (CSRC annual investor-protection typical case) 2025
Company registration and legal representative Reference case SPC Market-Access Model Case: Enterprise Name Dispute

Reference Case: Wanmougong (Hunan) Entertainment Co., Ltd. v. Changsha Municipal Administration for Market Regulation

Where a business entity improperly registers as its enterprise name another party's highly distinctive trade name and creates a risk of confusion, the market regulator may lawfully decide the enterprise-name dispute and order a timely change of registration. Judicial support for such decisions helps maintain fair competition and stable market-entry order.

SPC First Group of Ten Model Cases on Market-Access Administrative Litigation 2025
Legal representative, representative authority, and seal control Reference case SPC Typical Case: Company Certificate Preservation

Typical Case: Tokyo A Co., Ltd. of Japan v. Song Mou in an Application for Conduct Preservation

Where a former legal representative refuses to implement shareholder and board decisions, withholds company certificates and seals, and continues acting in the company's name so as to threaten normal operations and shareholder rights, a court may grant conduct preservation, prohibit further control or use of the company's seals and certificates, and order their transfer to a designated third party for safekeeping.

Supreme People's Court Typical Cases on Protecting Foreign Investment Rights 2025
Dissolution, liquidation, and veil piercing Reference case SPC Typical Case: Corporate Deadlock Dissolution

Typical Case: German A International Freight Forwarding Co., Ltd. v. Beijing A International Freight Forwarding Co., Ltd.

Whether a company's operation and management have entered a state of serious difficulty should be judged primarily by whether the corporate organs have suffered a prolonged breakdown creating irresolvable internal obstacles. Where a Sino-foreign joint venture's articles mean that any disagreement blocks valid board action, the board cannot meet for a long period, and no other remedy can break the deadlock, a court may order judicial dissolution.

Supreme People's Court Typical Cases on Protecting Foreign Investment Rights 2025
Representative and derivative enforcement Reference case SPC Typical Case: Harmful Related-Party Transaction

Typical Case: Shandong Yue Belt Co., Ltd. v. Related-Party Transaction Defendants in a Sino-Foreign Joint Venture

In a harmful related-party-transaction dispute involving a Sino-foreign joint venture, an arbitration clause in the joint-venture contract should not be applied mechanically to displace company-law derivative-action and judicial-relief mechanisms. After taking the case for retrial, the Supreme People's Court promoted a mediated solution that preserved the parties' cooperation, emphasizing the need to consider derivative-suit mechanisms, the identity of the related parties, and business continuity rather than allowing procedure to become an empty loop.

Supreme People's Court Typical Cases on Protecting Foreign Investment Rights 2025
Related-party transactions and tunneling Reference case SPC Typical Case: Executive Self-Dealing

Typical Case: Shanghai Lan Trading Co., Ltd. v. Jiang et al.

A senior manager who causes the company to transact with a company held or controlled by a close relative, without disclosure to and approval from the shareholders, engages in company-law self-dealing. The company may recover the portion of the transaction gain exceeding fair market value to restore the company's interests.

Supreme People's Court Typical Cases on Protecting Foreign Investment Rights 2025
Inspection rights and corporate books Reference case SPC Typical Case: Foreign Investor Shareholder Inspection

Typical Case: Korea T Co., Ltd. v. Tian Cultural Products Co., Ltd. and Cao Mouxuan

In a shareholder-inspection action brought by a foreign investor as shareholder of a Chinese company, the authority of the foreign corporation's representative is governed by the law of its place of incorporation, while the content and exercise of the inspection right are governed by Chinese company law. The foreign shareholder may lawfully seek access to and copies of corporate resolutions and financial reports, as well as inspection of accounting books and underlying vouchers.

Supreme People's Court Typical Cases on Protecting Foreign Investment Rights 2025
Dissolution, liquidation, and veil piercing Reference case Haidian Model Case: unnotified meeting agenda

Reference Case: Chen v. a Group Company on Resolution Rescission

A meeting notice that states only the time, place, and a broad subject is defective if it omits the concrete major agenda items later voted on, especially where the meeting actually resolves on share transfers, board dissolution, removal of directors or managers, and charter amendments affecting a specific shareholder's interests. This is not a minor defect and can materially impair participation and voting rights, so rescission of the resolution is appropriate.

Haidian District People's Court, Beijing 2024
Profit-distribution remedies Reference case Shandong Case 2024 No. 739

Reference Case: Whether a Former Shareholder May Claim Undistributed Profits from the Prior Holding Period

Before the company adopts a distribution resolution, the right to profit distribution remains an abstract shareholder right attached to membership status. If the shares are transferred through enforcement or voluntary disposition before any dividend resolution or specific distribution plan exists, the former shareholder transfers that abstract right with the shares and cannot later recapture the not-yet-declared profits through unjust enrichment or similar claims.

Rizhao Economic Development Zone People's Court 2024
Capital contribution and capital maintenance Reference case Haidian Model Case: contribution deadlines and majority rule

Reference Case: Jia v. a Technology Company, Fei Mou, and Wang Mou

A decision to shorten shareholders' subscribed capital deadlines, even when framed as a charter amendment, directly affects each shareholder's deadline benefit and core shareholder rights rather than ordinary management matters. If controlling shareholders use a capital-majority vote to accelerate another shareholder's contribution deadline without notice or consent, that vote can amount to abuse of shareholder rights and the resolution may be declared invalid.

Haidian District People's Court, Beijing 2024
Capital contribution and capital maintenance Reference case Jimo Court Case: Supplementary Liability for Unpaid Contributions

Reference Case: Company A v. Company B, Wang Mou, and Sun Mou

Where shareholders subscribed capital at incorporation with a clear payment deadline and still failed to pay or complete the contribution after that deadline matured, company creditors may seek supplementary liability from those shareholders within the principal and interest of the unpaid contribution for the part of the company debt that remains unsatisfied.

Jimo District People's Court of Qingdao 2024
Corporate resolutions and governance structure Reference case Haidian Model Case: charter-based board email voting

Reference Case: Li v. an Information Company on Resolution Validity

Where the Company Law does not mandate an in-person board meeting for a limited liability company, the charter may define the convening procedure and voting method. If the charter expressly allows email notice and remote voting, and all directors receive notice and submit positions so that the required approval ratio is met, the board resolution is not invalid merely because no physical meeting occurred or dissenting directors refused to sign the paper resolution.

Haidian District People's Court, Beijing 2024
Corporate social responsibility and public-interest protection Reference case Local Reference Case: Port Operations Safety

Reference Case: Wang Mou v. Feng Company on Port-Operations Injury

An enterprise that uses unsafe operational methods contrary to safety and industry rules and thereby increases the risk of injury in its work zone must bear tort liability. Where the injured party knowingly enters a restricted operations area and fails to protect their own safety, courts may reduce the enterprise's liability according to comparative fault.

Nansha District People's Court of Guangzhou (local-court published case) 2024
Corporate social responsibility and public-interest protection Reference case Local Reference Case: Diet Product Refund and Tenfold Damages

Reference Case: Li Mou v. Zhang Mou over Diet Product Sales

A buyer is not stripped of consumer status merely because of repeat purchases or prior litigation, so long as the product was not bought for resale or business use. Where a seller supplies unlabeled diet products containing sibutramine, the seller must refund the purchase price and pay punitive damages, though courts may limit the punitive-damages base when later purchases clearly exceed ordinary household consumption needs.

Pingchuan District People's Court of Baiyin, Gansu (Gonghe Tribunal) 2024
Legal representative, representative authority, and seal control Reference case Shanghai High Court Judgment: supervisor-convened meeting and legal-representative change

Reference Case: Supervisor-Convened Temporary Shareholders' Meeting and Change of Legal Representative

Where the executive director or existing management organs fail to convene a shareholders' meeting lawfully, a temporary shareholders' meeting convened by the supervisor under the Company Law may validly serve as the internal basis for removing and appointing the executive director and legal representative. Even before registration is updated, internal disputes between the company and its shareholders should in principle be resolved by reference to the valid shareholder resolution.

Shanghai High People's Court 2024
Shareholder status and equity ownership Reference case Shanghai Financial Court Review: unpaid contribution and dividend rights

Reference Case: Unpaid Contribution, Termination of Shareholder Status, and Dividend Rights on Execution Review

Where the charter provides that dividends are distributed according to paid-in contributions, a registered shareholder who has not actually paid in capital does not enjoy a dividend claim despite nominal shareholding. In external relations, however, if the shares were already frozen by a court and the internal resolution terminating shareholder status was adopted only afterward without completion of registration change, that internal resolution cannot automatically defeat the interests protected in the execution process.

Shanghai Financial Court 2024
Corporate reorganization and form changes Reference case SPC Typical Civil/Commercial Case: Limits on debt stripping in enterprise restructuring

SPC Typical Civil/Commercial Case: Asset Management Company Henan Branch v. Trading Company

In enterprise restructuring, a newly established company cannot automatically escape liability merely because a shareholders' resolution purports to strip away the predecessor's debts. Courts should examine the assets actually received, the continuity of operations, and creditor prejudice to decide whether the restructuring arrangement unlawfully evades legacy debt and to define the successor company's liability.

Supreme People's Court Typical Civil and Commercial Cases 2024
Listed-company governance Reference case 2024年广东高院二审维持一审胜诉；ST摩登资金占用代位追偿案

China Securities Investor Services Center on Behalf of ST Modern v. Guangzhou Ruifeng Group and Responsible Directors and Executives

Official materials on China Investor Network state that ST Modern's controlling shareholder non-operationally occupied about RMB 240 million of listed-company funds over an extended period, after which the investor-protection institution sued on the company's behalf when repeated internal demands failed. The Guangzhou court ordered repayment of the occupied funds and interest and imposed layered joint and several liability on the former chairman, former general manager, and former finance director according to their levels of fault; the Guangdong Higher People's Court affirmed, making the case a significant precedent for civil recovery in listed-company fund-occupation disputes.

Guangzhou Intermediate People's Court / Guangdong Higher People's Court (officially summarized on China Investor Network) 2024
Loyalty and diligence Reference case 2024年滨湖法院公司治理典型案例；监事竞业禁止案

Health Management Company v. Hu: Supervisor Non-Compete and Harm to Corporate Interests

In a corporate-governance typical case, the Wuxi Binhu court explained that a supervisor owes duties of loyalty and diligence, and that the supervisory function means the supervisor may not operate or help operate a competing business because that would inevitably create a conflict with the company's interests. In this case, the supervisor took over a nearby competing studio without completing resignation procedures and diverted the company's trainees there; relying on Article 184 of the new Company Law, the court treated the conduct as harmful to the company and ultimately induced compensation, closure of the studio, and a commitment not to continue the same business within a specified area.

Wuxi Binhu District People's Court (corporate-governance typical case) 2024
Capital contribution and capital maintenance Reference case Beijing High Court Case: Cash-to-IP Contribution Change Cannot Defeat Creditors

Reference Case: Wang Mou v. Xu Moujia and Xu Mouyi

Shareholders may in principle change contribution methods after incorporation. But where the company cannot pay due debts and enforcement has already been terminated for lack of assets, a later switch from publicly disclosed cash contributions to illiquid intellectual-property contributions, supported by an unreliable valuation, is ineffective against prior creditors. The shareholders remain supplementarily liable within the scope of the original unpaid cash contribution.

Beijing High People's Court 2024
Listed-company governance Reference case 全国首单投保机构股东代位诉讼；2023年2月20日调解结案

Investor Protection Derivative Recovery Against DZH Directors and Senior Officers

According to the official case note on China Investor Network, the China Securities Investor Services Center used its shareholder status to pursue recovery from DZH's controlling shareholder and former chairman-general manager and achieved full payment of the amount claimed, together with costs and legal fees. The case is framed as the country's first derivative action brought by an investor-protection institution and the first follow-on recovery action against directors and senior officers after securities-fraud civil liability had already been imposed on the listed company.

Shanghai Financial Court (official case note released by the CSRC Investor Protection Bureau) 2023
Corporate veil piercing Reference case SPC First Circuit Case: Jiachen v. Haima burden allocation

Reference Case: Sanya Jiachen Real Estate Development Co., Ltd. v. Haima Automobile Group Co., Ltd.

In veil-piercing litigation, courts should account for the creditor's informational disadvantage when allocating the burden of proof. A heavier burden may be placed on the shareholder only after the creditor produces initial evidence creating a reasonable suspicion of commingling; absent that threshold, no reversal of burden is warranted and shareholder joint liability should not be imposed.

First Circuit Court of the Supreme People's Court 2023
Capital contribution and capital maintenance Reference case Linzi Court Case: Malicious Extension and Accelerated Contribution

Reference Case: Trading Company v. Chemical Company, Chemical Partnership, and Zhang Mou

If shareholders know that company debts have already arisen, or that the company has already been sued, and nevertheless push contribution deadlines back through a temporary shareholders' resolution and charter amendment, the extension is ineffective against creditors. If the company cannot pay due debts, the shareholders must bear supplementary liability within the principal and interest of the originally subscribed contribution.

Linzi District People's Court of Zibo 2023
Corporate social responsibility and public-interest protection Reference case Local Reference Case: Rescue Injury in Heating Operations

Reference Case: Wang Moumou v. Meihekou Heating Power Company

Where a dangerous operational environment maintained by an enterprise causes harm to both an employee and a third-party rescuer, the hazardous work setting itself can amount to the infringing cause. A third party who undertakes a rescue without a preexisting duty may recover from the enterprise even if the rescue ultimately fails.

Meihekou People's Court of Jilin (local-court published case) 2023
Corporate reorganization and form changes Reference case Pingyin Court Case: pre-change debt liability after conversion from a one-person company

Reference Case: Liability for Legacy Debt After Conversion from a One-person Company to an Ordinary LLC

A one-person limited liability company that converts into an ordinary limited liability company during litigation does not disrupt the proceedings and does not automatically cut off liability for debts formed before the change. For pre-change debts, the original sole shareholder still bears the relevant burden of proving the company's separate property status and cannot defeat creditors merely by later changing the corporate form.

Pingyin County People's Court of Jinan 2023
Inspection rights and corporate books Reference case Fengxian Court Case: Sun improper-purpose inspection

Reference Case: Sun Mou v. a Shanghai Trading Company

A shareholder may renew a request to inspect financial reports, but access to accounting books and vouchers remains subject to the improper-purpose limitation. Where the shareholder or close relatives control an affiliated business that competes substantially with the target company in products, customers, and market, the court may find an improper purpose and deny inspection of books and vouchers.

Shanghai Fengxian District People's Court 2023
Shareholder status and equity ownership Reference case Baohe Model Case: Successor Shareholding in a Commercial Bank

Reference Case: Wang Mou v. Bank Shareholder Status Dispute

A person who acquires shares through liquidation distribution, inheritance, or another mode of succession may still seek recognition as a shareholder under company law, but the court must also examine any sector-specific regulatory eligibility rules. Where the transfer does not trigger a major shareholding-change threshold and current regulation does not bar natural-person shareholding, the court may recognize the status and require entry in the shareholder register.

Baohe District People's Court of Hefei (investor-protection model case) 2023
Related-party transactions and tunneling Reference case （2022）苏0116民初3207号；（2022）苏01民终14970号

Hongda Co., Ma Somezhen Interest Overcharge Compensation Dispute

In this dispute, the first-instance court held the actual controller/supervisory duty breach created a claim for interest loss, but the appellate court reversed. It ruled that a mere high-interest related-party loan was not automatically illegal where the transaction was part of a viable company financing choice and no sufficient fault was proved for abusing control; therefore the claim for the controller's compensation was dismissed.

Nanjing Liuhe District People's Court (first instance) and Nanjing Intermediate People's Court (appeal) 2022
Corporate veil piercing Reference case Guangdong Model Case: Jiangmen Fengpin / Weichang commingling

Reference Case: Guangzhou Dashun Hardware Factory v. Jiangmen Fengpin Company, Jiangmen Weichang Company, et al.

The Guangzhou Intermediate People's Court held in a Guangdong Greater Bay Area model case that Jiangmen Weichang and Jiangmen Fengpin, both under the same actual controller, had become commingled because they shared facilities, personnel, and financial management, while assets and products were transferred free of charge when Weichang could not pay its debts. Relying on Guiding Case No. 15, the court imposed joint liability on Fengpin for Weichang's unpaid purchase price.

Guangzhou Intermediate People's Court (Guangdong Courts Fifth Batch of Greater Bay Area Cross-Border Dispute Model Cases) 2022
Representative and derivative enforcement Reference case （2021）豫0191民初31622号

Kou Mouyan and Guo Moulong v. Ji Mouqin and Henan Education Technology Co., Ltd.

The court found that the defendant borrowed in the company's name without shareholder approval, established a same-business company at the original premises, and used an affiliate-linked transaction to dispose of the original company's fixed assets at a clearly undervalued price. The court therefore upheld the derivative claim to the extent proved and ordered compensation of RMB 35,000 to the company, while rejecting loss claims that lacked proof of amount or causation.

Zhengzhou Intermediate People's Court (typical cases on protecting minority investors) 2022
Inspection rights and corporate books Reference case Shanghai No. 1 Intermediate Case: Xia Feng inspection boundaries

Reference Case: Xia Feng v. Jiushe Company

The court held that because the company and other actual shareholders had acknowledged the claimant's beneficial shareholder status, inspection rights could be exercised. After a proper written demand and absent any improper purpose, the shareholder could inspect the charter, shareholder records, financial reports, and accounting books, but not ordinarily copy the books; inspection of accounting vouchers required a further showing that the books appeared unreliable or that voucher access was reasonably necessary.

Shanghai No. 1 Intermediate People's Court 2022
Related-party transactions and tunneling Reference case Zaozhuang Intermediate Case: Shareholder-Loan Related-Party Transactions and Corporate Protection

Xiang v. Zaozhuang Taxi Co., Ltd. and Zaozhuang Energy Supply Co., Ltd.

The court held that Company Law does not prohibit related-party transactions as such, but controlling shareholders and their affiliates may not use such arrangements to divert corporate value. Here, the controller occupied company funds for a long period without a clear interest agreement and later settled on an interest rate far above ordinary bank lending rates. The court treated that as an unfair shareholder-loan related-party transaction and ordered recovery of the resulting excess loss to the company.

Zaozhuang Intermediate People's Court (business-environment and investor-protection case note) 2022
Capital contribution and capital maintenance Reference case Chongqing Fifth Intermediate Case: Defective Reduction and Accelerated Subscribed Capital

Reference Case: Trading Company v. Yuehua Company and Chen Mou et al.

Even where the reduction concerns only unpaid subscribed capital that has not yet matured, the process is materially defective if the company fails to prepare the required balance sheet and asset list, fails to notify known creditors, and procures registration through false debt disclosures. Once enforcement is exhausted and the company lacks assets, creditors may seek supplementary recovery from the reducing shareholders within the scope of the pre-reduction subscribed capital, with the timing benefit of the contribution accelerated away.

Chongqing Fifth Intermediate People's Court 2022
Corporate resolutions and governance structure Reference case Liangshan Investor-Protection Case: Chen resolution non-establishment

Reference Case: Chen Moumou v. Shandong A Company and Beijing B Company

When a resolution concerns matters directly affecting a major shareholder's own interests, such as extending that shareholder's contribution deadline, the interested shareholder should recuse from voting. If a minority shareholder is not notified and the remaining votes do not satisfy the charter threshold once the interested shareholder is excluded, the resolution is not established.

Liangshan County People's Court 2021
Representative and derivative enforcement Reference case （2020）豫0105民初27717号；（2021）豫01民终4901号

Fang v. Zhengzhou Siwei Energy Saving Co., Ltd. and Zhengzhou Siwei Grain & Oil Engineering Co., Ltd.

The courts held that the controlling shareholder, who also served as executive director and general manager, used a controlled affiliate to arrange a grossly underpriced onward sale and thereby harmed the company through a related-party transaction. Where the wrongdoer is the director or senior manager himself, the company's supervisor may sue in the company's name and recover the company's lost expected profit.

Zhengzhou Jinshui District People's Court / Zhengzhou Intermediate People's Court (Henan court case note) 2021
Corporate resolutions and governance structure Reference case Beijing Corporate Case: Saidu resolution ratification

Reference Case: Ge Moumou v. Beijing Saidu Advertising Co. et al.

Even if a shareholder's signature on a resolution was not personally written, later conduct can amount to ratification. Where the shareholder knew the company continued operating under the earlier resolution, signed later related resolutions, accepted implementation, and raised no objection for a long period, the shareholder cannot rely solely on the false signature to seek non-establishment, invalidity, or rescission of the earlier resolution.

Dongcheng District People's Court, Beijing / Beijing Second Intermediate People's Court 2021
Inspection rights and corporate books Reference case Qingdao Model Case: Jiao v. Jinzhu shareholder inspection

Reference Case: Jiao Mou v. Jinzhu Company and Ding Mou

Where a shareholder has made the required written demand, the court should order access to the charter, meeting records, financial reports, accounting books, and accounting vouchers unless the company can show a legitimate ground for refusal. Mere abstract suspicion of an improper purpose is insufficient to defeat inspection rights.

Qingdao Intermediate People's Court 2021
Shareholder status and equity ownership Reference case Zaozhuang Intermediate Case: Incomplete Equity Gift Does Not Create Shareholder Status

Reference Case: Lei Moumou v. Company, Wang Mou, Chen Moumou, and Jiang Moumou

Shareholder status cannot be determined solely by registration appearances. If the supposed transfer agreements behind repeated shareholder changes did not reflect the parties' true intent and the registrations were not lawfully completed, the equity never transferred. Before the right actually passes, the donor may revoke the gift, and the donee's claim to shareholder status should fail.

Zaozhuang Intermediate People's Court 2021
Corporate veil piercing Reference case Guangdong Model Case: Weikang / Nike affiliated-company commingling

Reference Case: Luo Mouhe v. Weikang Company and Nike Company

In a Greater Bay Area model case released by the Guangdong High Court, the Foshan Intermediate People's Court found veil-piercing appropriate because affiliated companies under the same actual controller and finance head operated from the same location, used a unified external brand, and repeatedly collected one another's funds or assumed one another's debts. The court held that the companies had lost separate personality and imposed joint liability on Nike Company for Weikang Company's loan debt.

Foshan Intermediate People's Court (Guangdong Courts Third Batch of Greater Bay Area Cross-Border Dispute Model Cases) 2021
Loyalty and diligence Reference case 2023-13-2-160-021；（2020）鲁01民初1341号；（2021）最高法知民终194号

Tengzhou Machinery Manufacturing Co., Ltd. v. Li: Patent Ownership and Director Loyalty

The Supreme People's Court IP Tribunal held that a company director or senior manager may not use his office to transfer a company patent to himself for no consideration. If the transfer was not approved through the procedures required by the articles and cannot be justified as serving the company's interests, it breaches the duty of loyalty, is invalid, and the patent remains with the company.

Supreme People's Court Intellectual Property Tribunal database case 2021
Related-party transactions and tunneling Reference case 入库编号2023-08-2-276-003

Shanghai Fluid Equipment Technology Co., Ltd. v. Shi Moumou: Loss to the Company

A director or senior manager may not use inside position and company resources to divert a business opportunity that belongs to the company for personal gain. Once the opportunity is shown to be within the company’s real business scope and efforts, private diversion to an affiliated entity is a breach of loyalty and results in compensation liability.

People's Court Case Database (derived entry) 2021
Related-party transactions and tunneling Reference case Kaifeng Intermediate Case: Related-Party Identification and the Limits of Resolution Rescission

Shanghai Investment Center v. Biotech Co., Ltd. (Resolution Rescission and Related-Party Identification)

The court emphasized that the law does not ban related-party transactions, only unfair ones that harm the company. A cousin relationship between a participating director and the purchaser's shareholder was insufficient, without more evidence of control, to establish a company-law related-party relationship. In a resolution-rescission action, the court focuses on the meeting procedure, voting method, and consistency with the charter rather than using the rescission claim as a catch-all vehicle for every dispute over the commercial consequences of the transaction.

Kaifeng Intermediate People's Court (judicial protection cases for minority investors) 2021
Related-party transactions and tunneling Reference case (2021)最高法民申6621号

Reference Case: Shaanxi Investment Company v. Zhang and Zhu (Breach of Corporate Interest)

The court held that Zhang, acting as the company's legal representative and board chair, improperly diverted and disbursed company funds to related parties without following internal-control procedures. Zhu, who served as both supervisor and finance operator, participated in the transfers despite clear warning signs. A supervisor cannot escape liability merely by claiming to have followed instructions; because she had a duty to stop the legal representative's and managers' harmful conduct, she bears joint responsibility together with the legal representative for return and compensation.

People's Court Case Database (Supreme People's Court review) 2021
Corporate veil piercing Reference case Ten Typical Taiwan-rights Cases No. 3

Reference Case: Taiwanese Plastics Company v. Zhejiang Import-Export Company and its Shareholder Ningbo Plastics Company

When a shareholder sets up a new company during negotiations and has that company sign the contract, and the new company is plainly commingled with the shareholder in business scope, premises, management, and finance staff while promptly transferring the purchase price to the shareholder without real transactions, the shareholder may be found to have abused separate corporate personality and limited liability and therefore be jointly liable for restitution of the price.

Supreme People's Court (Ten Typical Cases on Protection of Taiwan Compatriots' Rights) 2021
Capital contribution and capital maintenance Reference case SPC IP Tribunal Case: Zero-Price Share Transfer and Capital Reduction to Evade Infringement Debt

Reference Case: Jiangsu Jintudi Seed Co., Ltd. v. Yangzhou Today Seed Co., Ltd. et al.

After the infringement arose, the original shareholders had not paid in their capital, transferred the shares for zero consideration to an obviously incapable transferee, and then sharply reduced the company's registered capital to a level far below the infringement risk. That continuous arrangement amounted to bad-faith debt evasion. For the pre-transfer infringement debt, the original shareholders were supplementarily liable within the unpaid contribution scope; and where the post-transfer one-person company could not prove separation of company and shareholder assets, the sole shareholder also bore joint liability.

IP Tribunal of the Supreme People's Court 2021
VAM, buyback, and earnout Reference case （2021）粤09民终36号

Reference Case: Chen Biao v. Zou Guokui et al.

The Maoming Intermediate People's Court reviewed the repurchase agreement through the lens of market regulation and investor protection. Because the listed company and related parties failed to disclose a downside-protection buyback clause during the private placement and listing process, allowing intermediaries to issue compliance opinions stating that no special clauses existed, the arrangement harmed non-specific investors and transaction safety. Even if the agreement reflected the parties' true intent, it was held invalid for offending capital-market order and public policy.

Maoming Intermediate People's Court, Guangdong 2021
VAM, buyback, and earnout Reference case （2021）京民终495号

Reference Case: Zhang Dongju et al. v. Nanjing Gangyan Venture Capital Partnership

The Beijing Higher People's Court distinguished between actually repurchasing the shares and paying damages for failing to timely complete the supporting steps for that repurchase. Although the target company could not directly pay the redemption price without first completing a capital reduction, its failure to timely push that process forward breached ancillary contractual duties, so delay damages were available. Those damages did not automatically reduce registered capital or amount to a disguised withdrawal of capital.

Beijing Higher People's Court 2021
Inspection rights and corporate books Reference case Zaozhuang Investor-Protection Case: Wang inspection dispute

Reference Case: Wang Mou v. a Zaozhuang Hotel Co., Ltd.

After a minority shareholder submits a written demand to understand company operations and the reasons for prolonged non-distribution, a company that refuses access and gives no response may be ordered to provide the charter, meeting records, financial reports, accounting books, and accounting vouchers, with the court specifying a reasonable place and period for inspection to balance oversight and ordinary business operations.

Zaozhuang Intermediate People's Court 2021
Legal representative, representative authority, and seal control Reference case Zaozhuang Investor-Protection Case: Zhao and Qian resolution non-establishment

Reference Case: Zhao Mou and Qian Mou v. a Zaozhuang Company

A shareholders' resolution is not validly established where the company bypasses lawful convening procedures and instead drafts the outcome first and then seeks written signature confirmation. A shareholder's receipt of materials without voting or returning them cannot be deemed consent, and a same-day board resolution dependent on that defective shareholder vote also fails.

Zaozhuang Intermediate People's Court 2021
Capital contribution and capital maintenance Reference case Zhejiang High Court Case: Unmatured Reduction Does Not Warrant Direct Enforcement Joinder

Reference Case: Li Moumou v. Additional Judgment Debtors in Enforcement

A capital reduction conducted by publication alone without notice to known creditors is procedurally improper. But where the contribution deadline had not yet matured and the shareholders did not actually withdraw capital, the reduction is not the same as capital withdrawal. In the absence of an express rule authorizing direct addition of reducing shareholders, they should not simply be added as judgment debtors in enforcement; substantive liability and statutory enforcement joinder must be kept distinct.

Zhejiang High People's Court 2021
Representative and derivative enforcement Reference case （2017）豫01民初3991号；（2020）豫民终799号

Shanghai Zhongkeyinghua Technologies Co., Ltd. and Related-Party Trading Loss Liability with Zhengzhou Investment Holding Co.

The court held that a control-linked related-party structure existed and that unfair procurement transactions caused losses to the target company. The judgment for damages was affirmed on appeal. The case also confirms that where the supervising body refuses to act after being requested, qualifying shareholders may sue directly under statutory standing requirements, including where control-linked actors and executives are involved.

Zhengzhou Intermediate People's Court / Henan Higher People's Court 2021
Shareholder status and equity ownership Reference case Gazette Case: Foreign Beneficial Owner Registration

Gazette Case: Cheng Junping v. Shanghai Niuxinda Import & Export Co., Ltd. et al.

When a foreign beneficial investor seeks recognition of equity ownership and registration as a named shareholder, the court should examine both the underlying nominee arrangement and whether the target company's business falls within a foreign-investment negative list. For sectors outside the negative list, the investor may be recognized and registered as a shareholder.

Supreme People's Court Gazette 2020
Shareholder status and equity ownership Reference case Gazette Case: Nominee Shareholder Under Equity Security

Gazette Case: Kunming Oke Trading Co., Ltd. and Xiong Zhimin v. Li Changyou et al.

A transaction framed as an equity transfer but functioning as debt security should be treated as an equity transfer by way of security in light of the parties' dealings, re-transfer conditions, and post-transfer control arrangements. The secured party may hold nominal registration, but does not automatically acquire substantive shareholder rights such as voting, dividends, or management power.

Supreme People's Court Gazette 2020
Partnership-enterprise disputes Reference case Gazette Case: Partnership Share Transfer

Gazette Case: Xing Furong v. Beijing Dingdian Taifu Investment Management Co., Ltd., Ding Shiguo et al.

The Gazette case confirms that special transfer restrictions in a partnership agreement remain enforceable if they do not violate mandatory law. Where a transfer of a limited-partner interest to a general partner would alter partner status, the court may strictly require compliance with unanimous-consent provisions in the partnership agreement.

Supreme People's Court Gazette 2020
Corporate social responsibility and public-interest protection Reference case Local Reference Case: Hyundai Emissions Public-Interest Litigation

Reference Case: Friends of Nature v. Hyundai Motor (China) Investment Co., Ltd.

An enterprise that sells vehicles exceeding emissions standards may, through a court-approved settlement in environmental public-interest litigation, be required to stop sales, remediate the vehicles, apologize publicly, and fund environmental protection. A charitable trust can serve as a valid mechanism for managing alternative-remediation funds.

Beijing Fourth Intermediate People's Court (local-court published case) 2020
Shareholder status and equity ownership Reference case Qinzhou Court Case: Former Employee Falsely Registered as Shareholder

Reference Case: Former Employee Falsely Registered as Shareholder

A person cannot become a shareholder without a genuine intention to join the company and assume the contribution arrangement. Where a former employee neither signed nor authorized company documents, never subscribed capital, and never exercised shareholder rights, false registration by the company does not create shareholder status; the legal consequences fall on the impersonating party.

Qinzhou District People's Court of Tianshui 2020
VAM, buyback, and earnout Reference case （2020）浙01民终11166号

Reference Case: Hangzhou Huyue Yuexia Investment Management Partnership v. Huang Zhenwu and Huang Zhenqiang

The Hangzhou Intermediate People's Court stressed that the transaction created two exit paths for the investor: market exit and a fallback controller buyback. Once the company was later delisted and failed the agreed performance metrics, the investor could no longer exit through the market, so the repurchase right that had been set aside during the listing phase revived under the promise letter and supplemental agreement, and the controllers had to repurchase the shares.

Hangzhou Intermediate People's Court 2020
Inspection rights and corporate books Reference case Qingdao Case: Zhang Zhiyuan v. Kron shareholder inspection

Reference Case: Qingdao Kron Chemical Co., Ltd. v. Zhang Zhiyuan

When a company resists inspection on the ground that the shareholder or an affiliate runs a similar business, it must prove a substantial competitive relationship and a real risk of harm to the company. Failing that, the shareholder may inspect not only the charter, meeting records, and financial reports, but also accounting books and underlying vouchers, with professional assistance under confidentiality obligations while the shareholder is present.

Qingdao Intermediate People's Court 2020
Capital contribution and capital maintenance Reference case Gazette Case: Contribution Deadline Resolution

Gazette Case: Yao Jincheng v. Hongda (Shanghai) Investment Management Co., Ltd. et al.

Absent a statutory basis or other urgent justification, contribution deadlines implicate individual shareholder timing interests and cannot be unilaterally accelerated by majority vote to the detriment of minority shareholders; such a resolution may be declared invalid.

Supreme People's Court Gazette 2019
Related-party transactions and tunneling Reference case （2019）最高法民申1474号

Gazette Case: Jilin Financial Holding Group Co., Ltd. v. Jilin Financial Asset Management Co., Ltd. and Hongyun Group Co., Ltd.

Sharp shareholder conflict, related-party transaction disputes, or occupation of company funds do not automatically amount to a deadlock warranting dissolution. If shareholder and board organs can still convene, vote, and produce valid resolutions under the law and the charter, and governance has not substantively collapsed, courts should ordinarily deny judicial dissolution.

Supreme People's Court Gazette 2019
Capital contribution and capital maintenance Reference case Gazette Case: Extended Contribution Deadlines Cannot Defeat Creditors

Gazette Case: Wang Qinjie v. Shanghai Licheng Investment Management Co., Ltd. et al.

Once company debts have already arisen, shareholders cannot rely on later charter amendments or resolutions extending contribution deadlines against existing creditors. If the company cannot pay due debts, under-contributing shareholders remain liable within the scope of their unpaid contributions.

Supreme People's Court Gazette 2019
Loyalty and diligence Reference case （2019）鲁10民终3289号

Wang Mou sheng and Wang Mou li v. Liu, Wang, and Bi: Boundary of Director Liability for Reward Arrangements

The court emphasized that liability for harming corporate interests still turns on whether the director or executive violated law, the articles, or internal arrangements and thereby caused loss to the company. Where a reward arrangement went through the company's internal approval process and was later ratified by the actual shareholder, the mere fact that an asset stood in an individual's name does not automatically establish a breach of loyalty, although title defects may still need to be corrected.

Weihai Intermediate People's Court typical investor-protection case 2019
Legal representative, representative authority, and seal control Reference case （2019）粤06民终10354号

Reference Case: Chen Baoci and Qingshang Fertilizer v. Chen Shengui

A former controller who interferes with corporate governance and infringes the company's management rights by forging shareholder documents, seizing and controlling the company seal, and seeking to change the legal representative should bear tort liability. Taking the company seal and refusing to return it has no legal basis, and the need for return and injunctive relief does not disappear merely because the company later reports the seal lost or void.

Foshan Intermediate People's Court judgment (republished by the International Commercial Court) 2019
VAM, buyback, and earnout Reference case （2019）最高法民申1982号

Reference Case: Hu Xiufang et al. v. Chengdu Zhongtie Venture Capital Partnership

In the retrial-review stage, the Supreme People's Court adhered to the earlier reasoning that Supplemental Agreement III governed redemption rights between the investor and the original shareholders and did not itself impose contractual obligations on the target company. The absence of the target company's seal therefore did not defeat formation, and once the contemplated listing failed the investor could enforce the restored repurchase clause against the original shareholders.

Supreme People's Court 2019
VAM, buyback, and earnout Reference case （2019）苏民再62号

Reference Case: Jiangsu Huagong Venture Capital Co., Ltd. v. Yangzhou Forging Machine Tool Co., Ltd., Pan Yunhu et al.

The Jiangsu Higher People's Court held that a direct VAM repurchase clause between the investor and the target company is not automatically invalid. Where the obligation can be performed through the Company Law's capital-reduction and creditor-protection procedures without substantively harming the company or outside creditors, the clause may be treated as valid and enforced. The decision is widely seen as a major transitional authority between the Haifu line and the later rule stated in the Ninth Civil Minutes.

Jiangsu Higher People's Court 2019
Related-party transactions and tunneling Reference case （2019）新民再50号

Xinjiang Yiming Real Estate Development Co., Ltd. v. Jin Shengli (Retrial on Harmful Related-Party Transactions)

On retrial, the high court held that the actual controller had improperly transferred RMB 7 million from the company in the name of paying for goods and used it personally, thereby diverting company assets through an affiliated relationship. An unaudited clean-up report and an estimated profit-distribution resolution were not enough to establish lawful distributable profits or a valid set-off against the controller's repayment duty, especially where dealings with affiliated companies had been blended together. The prior judgments were reversed and repayment with interest was ordered.

Xinjiang Uyghur Autonomous Region Higher People's Court / republished by Zhumadian Intermediate People's Court 2019
Representative and derivative enforcement Reference case （2019）最高法民终1679号

Zhou Changchun v. Zhuangshi China Investment Co., Li Shiwei, Peng Zhenjie, and Hunan Hanye Real Estate Development Co., Ltd.

The case confirms that where the company’s governing bodies are effectively unable to initiate litigation and internal channels are unavailable, a shareholder who has attempted required internal steps, or is in the statutory exception scenarios, may bring a representative action in the company’s name. Liability for breach by directors or managers is assessed with Article 149 and Article 151 of the Company Law as the legal framework for standing and procedural prerequisites.

Supreme People's Court Gazette 2019
Shareholder status and equity ownership Reference case Gazette Case: Shareholder Expulsion

Gazette Case: Liu Meifang v. Changzhou Kairui Chemical Technology Co., Ltd. et al.

A limited liability company may expel a shareholder by resolution if that shareholder still fails to cure full non-contribution or full capital withdrawal after demand, but the resolution is invalid where the voting shareholders themselves also engaged in sham contribution or total withdrawal and therefore lack a legitimate basis to wield expulsion power.

Supreme People's Court Gazette 2018
Corporate resolutions and governance structure Reference case SPC Second Circuit Model Case: Shareholder Resolution Validity and Corporate Autonomy

Reference Case: Dalian Daxian Group Co., Ltd. v. Dongbei Jincheng Construction Co., Ltd.

When reviewing the validity of a shareholders' resolution, courts should focus primarily on legality and only secondarily on reasonableness, examining whether convening, voting, or the substance of the resolution violates mandatory law or the articles. Where the resolution does not breach such rules or harm the company or other shareholders, courts should not replace corporate self-governance with their own business judgment.

Second Circuit Court of the Supreme People's Court 2018
Shareholder status and equity ownership Reference case SPC Second Circuit Model Case: Inspection Rights and Underlying Vouchers

Reference Case: Han Dequan and Guan Songxue v. Shenyang Zhimei Technology Co., Ltd.

A defect in capital contribution does not automatically negate shareholder status. The scope of inspection rights should be understood in light of both the Company Law and the Accounting Law; absent a reasonable basis for refusal, a shareholder may inspect accounting books and underlying vouchers to verify the company's actual operations.

Second Circuit Court of the Supreme People's Court 2018
VAM, buyback, and earnout Reference case （2016）最高法民再128号

Reference Case: Qiang Jingyan v. Cao Wubo

The Supreme People's Court accepted that a target company may validly provide a joint-liability guarantee for the controller's repurchase obligation, and stressed that such a guarantee should not be collapsed into a direct VAM payment obligation by the company itself. The analysis turns instead on whether the investor exercised reasonable formal review and whether the guarantee had a sufficient authorization and corporate-benefit basis.

Supreme People's Court 2018
Capital contribution and capital maintenance Reference case SPC Judgment: Internal Set-off After Capital Withdrawal Cannot Defeat Third Parties

Reference Case: Zhao Liangchen v. Shen Min and Hainan Shengde Huankai Real Estate Co., Ltd.

Where a shareholder rapidly transfers paid-in capital back to a personal account after incorporation and cannot prove that the funds were lawfully used for the company's business, the conduct constitutes withdrawal of capital. A later shareholder resolution internally setting off loans against the contribution has only internal effect, cannot defeat outside creditors, and does not prove that the contribution was replenished.

Supreme People's Court 2018
General corporate governance Reference case （2017）最高法民终181号

Gazette Case: China Great Wall Asset Management Co., Ltd., Jilin Branch v. Jilin SME Credit Guarantee Group Co., Ltd. and the Jilin Municipal SASAC

Where the debtor is already insolvent and the relevant participants know of the creditor relationship, a court may impose damages on a transferee that cooperates in moving core assets by means such as a gratuitous transfer of state-owned legal-person shares in order to evade debt. As for the institution exercising the state's investor rights, Article 20 of the Company Law does not need to be applied automatically if the creditor can already obtain relief from the transferee and there is no proof of separate loss independently caused by that institution.

Supreme People's Court Gazette 2017
Shareholder status and equity ownership Reference case Gazette Case: Hong Kong Board Record

Gazette Case: Xu Minghong v. Quanzhou Nanming Real Estate Co., Ltd. and Lin Shuzhe

When reviewing a suit to confirm a company resolution invalid, courts must apply both company-law rules and civil-procedure standing requirements; a record made by the board of a Sino-foreign joint venture to note a party's statutory appointment or replacement of directors is not a board resolution in the company-law sense and cannot itself be challenged as such.

Supreme People's Court Gazette 2017
Dissolution, liquidation, and veil piercing Reference case （2017）最高法民申2148号

Gazette Case: Jilin Huiguan Investment Co., Ltd., with Dongzheng Rongcheng Capital Management Co., Ltd. as Third Party, v. Changchun Northeast Asia Logistics Co., Ltd., with Dong Zhanqin as Third Party

A company's continuing profitability is not decisive in deciding judicial dissolution. Where a substantial shareholder has long been unable to exercise basic rights of participation, oversight, and governance benefit-sharing, and repeated attempts at valuation exit, share acquisition, or negotiated management arrangements fail to restore normal governance, a court may find severe management difficulty and grant dissolution.

Supreme People's Court Gazette 2017
Corporate veil piercing Reference case Gazette Case: Kuntong / Xingtongda commingling

Gazette Case: Shao Ping v. Yunnan Tonghai Kuntong Industrial and Trade Co., Ltd. and Tonghai Xingtongda Industrial and Trade Co., Ltd.

Applying the veil-piercing rule under the Company Law requires a multi-factor inquiry into the background of incorporation, the shareholders and controllers, key finance personnel, business operations and transaction purpose, tax arrangements, and the context in which the creditor contracted and performed. When a related company is created to continue the debtor's business and the two companies remain mixed in personnel, transaction flows, and tax reporting, commingling may be found and joint liability imposed.

Supreme People's Court Gazette 2017
Shareholder status and equity ownership Reference case Gazette Case: Standing and Procedure for Shareholder Dividend Claims

Gazette Case: Xu Minghong v. Quanzhou Nanming Real Estate Co., Ltd. and Lin Shuzhe

In company-related litigation, a claim challenging the validity of a board or company resolution and a claim for profit distribution are ordinarily distinct types of action and should not casually be bundled together. A plaintiff seeking dividends or other shareholder rights must generally prove shareholder status or another direct legal interest; where the plaintiff relies only on an investment arrangement without proving that status, the claim may be rejected.

Supreme People's Court Gazette 2017
Representative and derivative enforcement Reference case （2017）最高法民初相关案号

Miaofang Liu v. Changzhou Kairei Chemical Technology Co., Ltd. and Related Defendants: Company Resolution Validity

The case reviews core corporate resolutions in a foreign-funded company context and reiterates that resolutions influenced by procedural defects affecting lawful governance should be subject to substantive judicial review in shareholder derivative-type actions. Procedural irregularities must be assessed together with actual company harm when deciding on nullification or liability claims.

Supreme People's Court Gazette 2017
Corporate social responsibility and public-interest protection Reference case Local Reference Case: Cherry Orchard Air-Pollution Compensation

Reference Case: Qu Zhongquan v. Shandong Fuhai Industrial Co., Ltd.

Where the victim proves pollutant discharge, the damage, and a sufficient connection between the two through inspections and expert testing, the polluting enterprise bears the burden to disprove causation or establish a defense. Failing that, the enterprise is liable, though courts may adjust the percentage of liability to account for other factors such as weather.

Yantai Intermediate People's Court, Shandong High People's Court, and SPC retrial review (local-court published case) 2017
General corporate governance Reference case （2016）最高法民终802号

Gazette Case: Shenzhen Biaobang Investment Development Co., Ltd. v. Anshan Municipal Finance Bureau

Although a transfer contract for state-owned shares in a financial enterprise remains subject to approval by the competent authority, once the parties have reached clear agreement on the shares, price, and transaction path, the transferor must in good faith pursue the required approval. If the transferor unjustifiably refuses to apply for approval and instead resells the shares to another purchaser at a higher price, full expectation damages do not automatically follow, but the transferor may owe reliance losses, interest on the locked-up deposit, and a measured amount for lost transaction opportunity.

Supreme People's Court Gazette 2016
Partnership-enterprise disputes Reference case Gazette Case: Limited Partner Derivative Action

Gazette Case: Shixin Ronghe Investment Management Co., Ltd. v. Chang'an International Trust Co., Ltd. et al.

The SPC Gazette confirms that when the managing partner of a limited partnership fails to assert the partnership's rights, a non-managing limited partner may sue in its own name for the benefit of the partnership. After a proper demand on the partnership and the managing partner goes unanswered, the court may recognize the limited partner's standing.

Supreme People's Court Gazette 2016
Corporate veil piercing Reference case Gazette Case: One-person company veil piercing and burden of proof

Gazette Case: Ying Gaofeng v. Jiameide (Shanghai) Trading Co., Ltd. and Chen Huimei

In veil-piercing litigation involving a one-person company, when the creditor relies on shareholder-company asset commingling, the shareholder bears the burden of proving separation. Whether commingling exists should be assessed through the independence of the financial system, clarity of payments, and operational independence; if the shareholder carries that burden, joint liability should not be imposed automatically.

Supreme People's Court Gazette 2016
Corporate social responsibility and public-interest protection Reference case Local Reference Case: Kitchen-Apprentice Gender Discrimination

Reference Case: Liang Moumou v. Guangdong Huishijia Economic Development Co., Ltd. and Guangzhou Yuexiu Minghaoxuan Seafood Restaurant

When the post is not one legally unsuitable for women, an employer's decision to exclude or restrict applicants solely because of sex constitutes employment discrimination and infringes equal employment rights. Courts may order a written apology and compensation for emotional harm.

Haizhu District People's Court and Guangzhou Intermediate People's Court (officially published case) 2016
Dissolution, liquidation, and veil piercing Reference case 江苏法院2011-2015年破产审判十大案例（三）

Reference Case: Taicang Shengnuo Alloy Casting Co., Ltd. Bankruptcy Liquidation

Where a company enters compulsory liquidation after judicial dissolution and the liquidation process establishes that bankruptcy grounds are present, the court may convert the matter into bankruptcy liquidation and carry forward the work already completed in the compulsory liquidation, thereby avoiding duplication and improving creditor recoveries.

National Enterprise Bankruptcy and Restructuring Case Information Platform / Jiangsu Higher People's Court 2016
Listed-company governance Reference case （2016）最高法民终528号

Gansu Julidong Metalworking Co., Ltd. v. Qingyang Taiyi Thermal Power Co., Ltd. and Li Xinjun (Surplus Distribution)

The Court found that the executive director’s diversion of post-acquisition proceeds to entities controlled by the manager to the exclusion of the company’s statutory distribution obligations caused concrete loss to shareholders and the company. The case confirms that tracing the funds and benefit chains through controlled entities is critical in company-interest damage claims against directors and managers.

Supreme People's Court Gazette 2016
Legal representative, representative authority, and seal control Reference case （2015）西中民四初字第00480号

Reference Case: China Natural Gas Company v. Shaanxi Xilan Natural Gas Equipment Co., Ltd.

In a foreign-invested company, a valid decision made under the articles by the shareholder or other competent organ to remove and appoint the legal representative and directors takes effect internally upon adoption. If the company, as the entity responsible for registration and filing, refuses to recognize the appointment notice and delays the required change registration and filing for the legal representative, directors, and amended articles, a court may order it to complete those procedures within the statutory period.

Xi'an Intermediate People's Court first-instance judgment (republished by the International Commercial Court) 2015
Related-party transactions and tunneling Reference case （2012）东陵民三初字第266号；（2015）沈中民三终字第387号

Shenyang Hongshida Electronics Co., Ltd. v. Zhang Chen and Li Zhengfan

A typical case published by the SPC Second Circuit held that where a company's chairman and supervisor use controlled affiliates to produce and sell products that should have been operated by the company and capture the profits, they harm the company through related-party control and abuse of office and must compensate the company. External parties that are not the company's controlling shareholders, actual controllers, directors, supervisors, or senior managers do not automatically bear joint and several liability under company law when their liability rests on a different legal basis such as unfair competition.

Shenyang Hunnan District People's Court / Shenyang Intermediate People's Court / Typical case published by the SPC Second Circuit 2015
General corporate governance Reference case Gazette Case: Shareholder Pre-emption

Gazette Case: Zhongjing Industrial (Group) Co., Ltd. v. Shanghai Electric Power Industrial Co., Ltd. et al.

Where state-owned equity is publicly transferred through an exchange venue, the "same terms" requirement for shareholder pre-emption includes both substantive conditions such as price and procedural conditions such as entering the exchange process and posting the required deposit. A shareholder who refuses to participate under the exchange rules cannot bypass that process and compel a direct transfer through litigation.

Supreme People's Court Gazette 2014
Legal representative, representative authority, and seal control Reference case Gazette Case: Publicity of Legal-Representative Registration

Gazette Case: Thumb Environmental Technology Group (Fujian) Co., Ltd. v. China Environmental Technology Group Co., Ltd.

Registration of the legal representative has public effect toward outsiders, and external disputes over corporate representation should be assessed with close regard to the registered status. Internally, shareholders may change the legal representative under the Company Law and the articles, but before registration is updated the mere fact of an internal change does not by itself negate outward acts or litigation conduct already taken in the company's name.

Supreme People's Court Gazette / Supreme People's Court 2014
Inspection rights and corporate books Reference case Chengwu Court Case: Chu profit distribution

Reference Case: Chu Mou v. a Certain Co., Ltd. (Profit Distribution)

Where the charter and prior distribution practice show profits are to be allocated according to capital contributions, and the company unjustifiably refuses to produce complete financial records to rebut the shareholder's claim, the court may draw an adverse inference, find that dividends were in fact declared, and order payment of the withheld dividends with interest.

Chengwu County People's Court 2014
Legal representative, representative authority, and seal control Reference case （2014）鄂民监三再字第9号

Reference Case: Hongzhi Industrial Co., Ltd. v. Chen Mengyu, Ding Xiuzhi, and Wuhan Youyi Tekang Food Co., Ltd.

In an equity-transfer dispute, a legal representative's execution of an agreement without internal authorization is, in principle, a question of agency authority rather than the company's civil capacity. Courts should not collapse a legal representative's excess of authority into a lack of corporate capacity. Where the transaction remains subject to statutory approval for effectiveness, courts must also examine the approval regime and the contract terms separately when assessing formation, effectiveness, and performance obligations.

Republished by the International Commercial Court / Supreme People's Court retrial judgment 2014
Representative and derivative enforcement Reference case 入库编号2024-08-2-276-001

Shanghai Industry Co., Ltd. v. Zhou (Supervisory Representative Suit)

Where directors or senior managers use their positions to harm corporate interests, a supervisor has standing to bring suit in the company’s name under the statutory representative-action framework; where procedural thresholds are met, such actions are treated as actions to protect the company, with recovered recovery accruing to the company.

People's Court Case Database 2014
VAM, buyback, and earnout Reference case （2014）民二终字第111号

Reference Case: Lan Zeqiao, Yidu Tianxia Special Fishery Co., Ltd., and Hubei Tianxia Sturgeon Co., Ltd. v. Suzhou Zhouyuan Jiuding Investment Center (Limited Partnership)

The Supreme People's Court recognized the validity of a share-repurchase VAM arrangement between the investor and the original shareholders, treating it as a genuine commercial allocation of investment risk and return rather than an automatically invalid guaranteed-return clause. Where the target company had already fallen into loss and timely listing had become practically impossible, the court was prepared to find that the repurchase trigger had been satisfied.

Supreme People's Court 2014
VAM, buyback, and earnout Reference case （2014）沪一中民四（商）终字第730号

Reference Case: Shanghai Ruifeng Equity Investment Partnership (Limited Partnership) v. Lianyungang Dingfa Investment Co., Ltd. and Zhu Liqi

The Shanghai First Intermediate Court articulated four principles for reviewing VAM repurchase clauses: encouraging transactions, respecting party autonomy, protecting the public interest, and safeguarding procedural fairness in commercial dealing. It upheld the shareholder buyback arrangement contained in the original multi-party investment documents but refused to enforce a later side agreement that raised the repurchase price without all parties' participation and to the detriment of other investors.

Shanghai No. 1 Intermediate People's Court 2014
VAM, buyback, and earnout Reference case （2014）湘高法民二初字第4号

Reference Case: Shenzhen Zhongnan Growth Investment Partnership v. Liao Zhiqiang

The Hunan Higher People's Court examined the listing-clearance termination arrangement together with the later supplemental restoration agreement and held that the post-failure buyback mechanism still reflected the parties' true intent. Because the company did not complete the contemplated listing and the agreed restoration condition was met, the controller had to repurchase the investor's shares.

Hunan Higher People's Court 2014
Corporate veil piercing Reference case Shandong Judicial Summary: Gelaide / Fushide / Beisida commingling

Reference Case: Zibo Sichuang Glass Fiber Co., Ltd. v. Taixing Gelaide Specialty Textiles Co., Ltd., Wuxi Fushide Specialty Glass Fiber Co., Ltd., and Taixing Beisida Specialty Textiles Co., Ltd.

In a sales-contract dispute affirmed on appeal, the Yiyuan County People's Court held that Gelaide, Fushide, and Beisida had become commingled because they repeatedly mixed company identities in contracting, account reconciliation, delivery, seal use, advertising, and personnel arrangements, while their controllers were closely related family members. The court concluded that the creditor had in substance dealt with the three-company whole rather than any one separate corporation, and ordered all three companies to satisfy the outstanding price and interest jointly.

Yiyuan County People's Court / Zibo Intermediate People's Court (reproduced by Yantai Intermediate People's Court) 2014
Corporate reorganization and form changes Reference case (2013)浙温商终字第397号

Reference Case: Wu Jiate v. Wu Jialun and Shanghai Lunte Electronic Instrument Co., Ltd.

Where the shareholders have already formed a clear agreement on a company split through shareholder resolutions, an administrative mediation record, asset-allocation arrangements, and public notice, and have in fact operated separately for years, the obstructing party must assist with the split-registration process. A court may confirm the effectiveness of the relevant split agreement or mediation record and order cooperation with registration, but may not directly replace the registration authority by cancelling shareholder status through a civil judgment.

Wenzhou Intermediate People's Court of Zhejiang Province 2013
Corporate reorganization and form changes Reference case (2013)郑民三终字第1121号

Reference Case: Zhengzhou Libao Plastics Co., Ltd. v. Zhengzhou Minsheng Plastic Sheet Industrial Co., Ltd.

After a continuation split and the division of land-use rights, where the split agreement and supplemental agreement allocate land, compensation, and demolition proceeds but do not specify who bears registration and transfer taxes, the party that prepaid those taxes cannot compel proportionate sharing based solely on an alleged oral understanding. Fees, taxes, and settlement mechanics arising from a corporate split should be stated expressly in the split agreement; otherwise the claimant bears the consequence of insufficient proof.

Zhengzhou Intermediate People's Court of Henan Province 2013
Shareholder status and equity ownership Reference case Gazette Case: Dilutive Capital Increase

Gazette Case: Huang Weizhong v. Chen Qiangqing et al. Shareholder Status Confirmation

A fictitious capital increase that dilutes an existing shareholder's stake without a valid shareholder resolution remains invalid even if registration formalities were completed, and the original shareholding ratio should be restored.

Supreme People's Court Gazette 2012
Dissolution, liquidation, and veil piercing Reference case （2011）民四终字第29号

Gazette Case: Shifeng Technology Co., Ltd. v. Fujun New Composite Materials (Taicang) Co., Ltd., with Yongli Group Co., Ltd. as Third Party

In a dissolution dispute involving a Sino-foreign equity joint venture, courts may still apply the ordinary Company Law standards on corporate deadlock and judicial dissolution. The decisive inquiry is not which side first caused the deadlock, but whether governance has broken down for a sustained period, whether shareholder and board organs can no longer produce effective resolutions, whether the corporate purpose has become impracticable, and whether realistic alternative remedies remain. Even if the suing shareholder contributed to the deadlock, dissolution may still be ordered where severe management difficulties persist and cannot otherwise be resolved.

Supreme People's Court Gazette 2012
VAM, buyback, and earnout Reference case （2012）民提字第11号

Gazette Case: Suzhou Industrial Park Haifu Investment Co., Ltd. v. Gansu Shiheng Non-ferrous Resources Recycling Co., Ltd., Hong Kong Diya Co., Ltd., and Lu Bo

VAM clauses requiring the target company itself to provide performance-based cash compensation are invalid where they give the investor a relatively fixed return detached from the company's operating results and thereby harm the company or its creditors. Compensation undertakings made by the target company's shareholders remain valid in principle absent a statutory ground of invalidity. The case became the foundational authority for the distinction between company-side and shareholder-side VAM obligations.

Supreme People's Court Gazette / Supreme People's Court 2012
Legal representative, representative authority, and seal control Reference case Gazette Case: Apparent Representation and Corporate Guarantee

Gazette Case: China Merchants Bank Dalian Donggang Sub-branch v. Dalian Zhenbang Fluorocarbon Coatings Co., Ltd. and Dalian Zhenbang Group Co., Ltd.

The Company Law's rules on internal approval for guarantees are primarily internal-control rules and do not automatically determine contract validity. Where a creditor has carried out the necessary formal review of shareholder resolutions and related authorization documents and has reason to believe the legal representative had authority, apparent representation may be found and the company remains bound by the guarantee.

Supreme People's Court Gazette / Supreme People's Court 2012
Inspection rights and corporate books Reference case Nantong Court Case: Jiang Mou professional-assisted voucher inspection

Reference Case: Jiang Mou v. a Real Estate Company

Where the company cannot prove that inspection of books and accounting vouchers serves an improper purpose or threatens commercial secrecy or security, the court may permit the shareholder and professionally retained accounting personnel to inspect both the books and the vouchers. Otherwise, inspection rights would become ineffective in practice for shareholders lacking technical expertise.

Nantong Intermediate People's Court 2012
Related-party transactions and tunneling Reference case （2012）最高法民四终第15号

Lin Cheng'en v. Li Jiangshan and Others: Alleged Misconduct Causing Company Loss

The court stated that liability for board members’ duty breaches cannot be inferred in the abstract. As a baseline, claimants must show actual company loss and corresponding improper benefit. Even in cross-border (including HK-linked) contexts, the Court applied the duty framework of company law consistently.

Supreme People's Court Gazette 2012
Listed-company governance Reference case （2011）民提字第210号

Gazette Case: Lanzhou Shenjun Logistics Co., Ltd. v. Lanzhou Minbai (Group) Co., Ltd.

In a listed company's split-share reform, where the controlling shareholder contributes equity assets without consideration, causing the company to form capital reserves that are then capitalized and allocated to tradable shareholders under a shareholders' resolution, the arrangement does not amount to a non-public issuance of new shares under the Securities Law. The resulting capital reserves belong to the company, and non-tradable shareholders cannot invoke equal-share principles to demand a proportional allotment of the added shares; targeted capitalization in split-share reform must be distinguished from securities issuance.

Supreme People's Court Gazette 2011
Corporate reorganization and form changes Reference case Jinan Licheng Court Case: debt succession after collective-enterprise restructuring

Reference Case: Li Xiuxiao v. Shandong Tiantuo Construction Co., Ltd. et al.

When a collective enterprise is restructured, its assets are auctioned, and it is renamed as a limited liability company, the predecessor's external debts do not automatically disappear if the new company in substance continues the predecessor's assets, qualifications, and business appearance. Creditors may invoke that continuity to seek payment from the new company within the scope of succession.

Licheng District People's Court of Jinan 2011
Shareholder status and equity ownership Reference case Gazette Case: Nominee Equity Registration

Gazette Case: Zhang Jianzhong v. Yang Zhaochun

A nominee-shareholding arrangement between a beneficial investor and a nominee shareholder is valid absent statutory invalidity, but a request to register the beneficial investor as shareholder must still satisfy the transfer and other-shareholder-consent rules for a limited liability company.

Supreme People's Court Gazette 2010
Capital contribution and capital maintenance Reference case Gazette Case: Pre-emptive Subscription for New Capital

Gazette Case: Mianyang Hongri Industrial Co., Ltd. and Jiang Yang v. Mianyang High-Tech Zone Kechuang Industrial Co., Ltd.

When a limited liability company increases capital, existing shareholders enjoy a statutory pre-emptive right to subscribe for the new capital in proportion to their interests. Even if the capital increase itself is validly approved, the portion of the resolution and the related subscription agreement that directly installs a third party as subscriber without honoring that pre-emptive right are invalid, and the original shareholders may seek restoration of their subscription priority.

Supreme People's Court Gazette 2010
Listed-company governance Reference case 公报案例：非上市股份公司向社会公众转让股权构成擅自发行股票

Gazette Case: Shanghai Pudong New Area People's Procuratorate v. Shanghai Anji Biotechnology Co., Ltd. and Zheng Ge

Where an unlisted joint-stock company raises funds by using intermediaries or individuals to publicly market transfers of its shareholders' shares to unspecified members of the public, or where the purportedly targeted transfers lead to more than 200 shareholders, the conduct is treated in substance as an unapproved public stock offering rather than an ordinary private share transfer. The company and its directly responsible managers may therefore commit the crime of unauthorized stock issuance.

Supreme People's Court Gazette / Shanghai Pudong New Area People's Court 2009
General corporate governance Reference case （2009）沪高民二（商）终字第22号

Gazette Case: Bafeite Investment Co., Ltd. v. Shanghai Water Investment Construction Co., Ltd.

Transfers of enterprise state-owned property should, in principle, be conducted openly through a legally established property-rights exchange under the state-asset supervision rules. Even where the holder of the state-owned equity has made an internal authorization arrangement, a court may still hold an off-exchange transfer invalid if it bypasses the mandatory exchange procedure and thereby violates the principles of openness, fairness, and impartiality and harms the public interest.

Supreme People's Court Gazette 2009
Shareholder status and equity ownership Reference case Gazette Case: Listed Share Nominee Holding

Gazette Case: Shenyin Wanguo Securities Co., Ltd. v. Shanghai Guohong Real Estate Co., Ltd.

Where an original shareholder transfers listed-company legal-person shares for consideration and the agreement clearly expresses a transfer and is followed by registration, the arrangement is a transfer rather than nominee holding; non-payment of the price restores only a claim for payment, not the transferred shares. Holdings and changes in listed-company shares should generally be determined by the public registration record.

Supreme People's Court Gazette 2009
Partnership-enterprise disputes Reference case Gazette Case: Partnership External Liability

Gazette Case: Nantong Shuangying Trading Co., Ltd. v. Lianda Machinery Factory of Dantu District, Zhenjiang, Wei Hengnie et al.

The Gazette case confirms that where several persons jointly operate a business and jointly decide its business affairs, a partnership relationship may be found. Their deliberate failure to update the registration to reflect the partnership does not relieve them of external liability for debts incurred in partnership operations.

Supreme People's Court Gazette 2009
Legal representative, representative authority, and seal control Reference case （2009）高民终字第1730号；载《最高人民法院公报》2011年第2期

Gazette Case: CNBM Group Import & Export Corp. v. Beijing Dadi Hengtong Trading Co., Ltd. and Others

The Company Law's rules on internal approval for external guarantees are, in principle, internal governance and authorization-control rules, and do not automatically invalidate the guarantee contract. If the counterparty neither knew nor should have known that the legal representative exceeded authority and carried out the necessary formal review of the apparent authorization documents, the counterparty may be protected as a good-faith third party, and the company may not rely solely on internal approval defects to defeat external transaction security.

Supreme People's Court Gazette / Beijing High People's Court appellate judgment 2009
Corporate reorganization and form changes Reference case Zaozhuang Intermediate Case: the boundary of acquisition, merger, and asset reception

Reference Case: Wang Jun v. Zaozhuang Bank Co., Ltd.

A contractual reception of selected assets, claims, and liabilities from credit cooperatives does not automatically amount to an absorption merger. Courts should distinguish mergers from targeted asset-and-liability transfers by examining the transfer agreement, approvals, and the actual structure of the transaction; absent an independent basis for liability, a receiving bank cannot be presumed to bear every legacy debt simply because it took over part of the predecessor's assets and obligations.

Zaozhuang Intermediate People's Court 2009
Corporate reorganization and form changes Reference case Gazette Case: Debt-transfer undertaking in a listing reorganization

Gazette Case: Industrial and Commercial Bank of China, Sanmenxia Station Sub-branch v. Sanmenxia Tianyuan Aluminum Co., Ltd. and Sanmenxia Tianyuan Aluminum Group Co., Ltd.

Where a group and its share company issue supplemental undertakings during a listing reorganization, courts should examine whether the relevant assets actually entered the share company, whether the acquisition steps were completed, and whether the stated conditions were satisfied before deciding whether liabilities moved with the assets. If the share company accepted the assets and the undertaking conditions were fulfilled, it should bear the corresponding debt.

Supreme People's Court Gazette 2008
Corporate veil piercing Reference case Gazette Case: Tailai affiliated-company commingling

Gazette Case: China Cinda Asset Management Chengdu Office v. Sichuan Tailai Decoration Engineering Co., Ltd. et al.

Where affiliated companies with overlapping ownership are established by the same investor and controlled by the same natural person, and that controller disregards their separate personalities by freely confusing assets and creditor-debtor relationships so that personnel and property boundaries cannot be distinguished, the companies may be treated as commingled and held jointly liable.

Supreme People's Court Gazette 2008
Loyalty and diligence Reference case Gazette Case: Fabricated Shareholder Resolution

Gazette Case: Zhang Yanjuan v. Jiangsu Wanhua Industry & Trade Development Co., Ltd. et al.

The validity of a limited liability company's shareholder meeting and resolution depends on a lawfully convened meeting with genuine shareholder participation and assent; where the controller fabricates the meeting and resolution, other shareholders may seek a declaration of invalidity, and the Company Law's 60-day rescission limit for actual resolutions does not apply.

Supreme People's Court Gazette 2007
General corporate governance Reference case （2007）民二终字第19号

Gazette Case: Fengfeng Group Co., Ltd. v. China Energy Conservation Investment Corporation

A repayment dispute arising from the possession and use of state infrastructure operating funds does not automatically fall into the category of non-justiciable disputes over governmental adjustment or allocation of enterprise state-owned assets. Where policy documents have already assigned the relevant debt-credit relationship to a designated state-invested enterprise and vested that enterprise with the investor function, the fund-using enterprise must still perform its civil repayment obligation and cannot avoid liability merely by invoking later accounting treatment as state capital or a pending state-asset coordination process.

Supreme People's Court Gazette 2007
Corporate reorganization and form changes Reference case (2007)宁民二终字第152号

Reference Case: Nanjing Xuanwuhu Credit Union v. Chemical Container Factory, Xianjiao Chemical Company, and New Chaoyang Company

Even if supervisory documents used the language of 'division,' the transaction should still be characterized as an investment in a new legal person rather than a corporate split where the registration materials, capital verification, and formation process show that the predecessor merely invested personnel, funds, and assets into a separate entity. Creditors of the predecessor may seek recovery by executing the predecessor's equity interest, but cannot automatically demand direct joint liability from the later restructured company for pre-division debt.

Nanjing Intermediate People's Court of Jiangsu Province 2007
General corporate governance Reference case Gazette Case: Pre-emption Bars Performance but Not Contract Validity

Gazette Case: Beijing Xin'ate Group Co., Ltd. v. China Huarong Asset Management Co.

The lawful exercise of another shareholder's pre-emption right in a limited liability company does not automatically invalidate the share transfer contract between the transferor and the outside transferee. Courts should distinguish the validity of the contract from the effectiveness of the share transfer itself, and where the contract remains valid, the transferee may still claim damages for non-performance.

Supreme People's Court Gazette 2005
General corporate governance Reference case Gazette Case: Founder Share Transfer Restrictions and Share Custody

Gazette Case: Zhang Guiping v. Wang Hua

Where founders' shares in a joint-stock company remain subject to statutory transfer restrictions, courts should distinguish a transitional custody or management arrangement from a completed prohibited transfer by examining the contract terms and the parties' performance. The existence of interim management or custody terms alone does not automatically render the related share transfer agreement invalid.

Supreme People's Court Gazette 2005
General corporate governance Reference case （2004）民一终字第46号；载《最高人民法院公报》2005年第7期

Gazette Case: Guixinyuan Co. v. Quanwei Co. and Others

A company does not automatically lose its legal-person status merely because its registered business term has expired, so long as it has not been deregistered or revoked. Even if a contract falls outside the company's registered business scope, it should not be denied effect solely on that basis where it is, in substance, a disposition of the company's own property and does not violate mandatory rules on validity in laws or administrative regulations.

Supreme People's Court Gazette / Supreme People's Court second-instance judgment 2004
Corporate reorganization and form changes Reference case (2003)民二终字第106号

Gazette Case: ICBC Shandong Branch v. Xincheng Company et al.

Where an enterprise forms a new company by transferring part of its assets and offsetting an equivalent amount of debt, and no longer holds corresponding shares in the transferred assets, a creditor whose claim was not included in the transfer arrangement may still proceed against the original enterprise and require the new company to bear joint liability within the scope of the predecessor assets it actually received.

Supreme People's Court Gazette 2003
Legal representative, representative authority, and seal control Reference case Gazette Case: Representative Authority Before Registration Change

Gazette Case: Hong Kong Xinjianye Co., Ltd. et al. v. Shanghai Xinjianye Co., Ltd. et al.

Even after internal dismissal, a legal representative remains in the outwardly registered representative position until registration is changed. Outward acts taken in the company's name during that interval, so long as they are not contrary to the company's interests, may still be treated as the company's valid acts and bind the company.

Supreme People's Court Gazette / Supreme People's Court 2001

Database case

0
Legal representative, representative authority, and seal control Database case Database Case No. 6

Database Case 6 on Foreign-Law Ascertainment: Fujian Environmental Company v. Technology Group Shareholder Contribution Dispute

The Supreme People's Court distinguished the internal and external effects of changing the legal representative. In disputes involving third parties outside the company, the registered legal representative has public-notice effect. In internal disputes between the company and its sole shareholder over appointment and removal, however, a valid shareholder appointment decision controls and changes the legal representative's status within the company. Because the sole shareholder had effectively replaced the legal representative and the newly appointed representative clearly opposed the suit, the original filing did not reflect the company's true intent and had to be dismissed.

Supreme People's Court International Commercial Court 2026
Capital contribution and capital maintenance Database case Database ID 2023-08-2-266-001

Database Case: Wen Mou v. Sichuan Investment Consulting Co., Ltd. et al.

When a creditor seeks recovery from the company and then pursues supplementarily liability from under-contributing shareholders, those shareholders may invoke the company's statute-of-limitations defense against the creditor. If the creditor's claim against the company is time-barred, the shareholders may rely on that defense to resist supplementary liability.

People's Court Case Database (reviewed by the Supreme People's Court) 2026
Legal representative, representative authority, and seal control Database case Database ID 2024-08-2-272-001

Database Case: Shanghai Pan Commercial Operation Management Company v. Wu Moumei

Where the legal representative and the company seal are controlled separately, litigation acts carried out by the legal representative in the company's name are attributable to the company. In the absence of special internal rules on custody, the legal representative is the default lawful custodian of the company's certificates and may demand the return of the business license, company seal, finance seal, legal-representative seal, books, and contracts.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Legal representative, representative authority, and seal control Database case Database ID 2024-08-2-264-001

Database Case: Chen Moufei v. Shanghai Decoration Company and Zhang Moulin et al.

A legal representative or director may unilaterally resign from the underlying mandate relationship, with effect upon delivery of notice to the company. If the company fails to update registration within a reasonable period and internal remedies are exhausted, a court may order the company to change or remove the registration.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Inspection rights and corporate books Database case Database ID 2024-08-2-267-002

Database Case: Chen Mouyun v. Sheyang Driver Training Company

Loss of accounting books or financial reports is not a statutory ground to refuse shareholder inspection. A company has a legal duty to preserve such materials and bears the adverse consequences when its own poor recordkeeping frustrates inspection rights.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Legal representative, representative authority, and seal control Database case Database ID 2025-16-2-091-001

Database Case: Sichuan Xing Investment Co., Ltd. v. Chengdu Fa Real Estate Co., Ltd.

Where a legal representative signs and performs a contract in the company's name within the scope of representative authority, the contract is not automatically ineffective against the company merely because the representative privately carved the company seal for personal gain and may have committed a crime. Company liability should be assessed in light of the registered status, the outward appearance of the transaction, performance, and the counterparty's good faith.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Inspection rights and corporate books Database case Database ID 2023-08-2-267-001

Database Case: Henan Industrial Company v. Bank Corporation

A former shareholder with preliminary evidence of harm during its holding period should not be turned away on standing grounds alone. After acceptance, however, the court must still substantively examine whether the evidence proves impairment and whether the inspection or profit-distribution claims should succeed.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Capital contribution and capital maintenance Database case Database ID 2024-08-2-527-002

Database Case: Lu Mougang and Cao Mou v. Shen Mou, Pan Mouli, and Yang Mouqiong

Shareholders may in principle transfer shares before their contribution deadlines mature. But where the company cannot pay due debts and the transferor knowingly transfers the shares at a manifestly unreasonable low price to a transferee obviously lacking the ability to contribute, the transfer is treated as a bad-faith evasion of contribution duties, and the transferor remains supplementarily liable within the scope of the subscribed contribution.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Dissolution, liquidation, and veil piercing Database case Database ID 2024-10-2-283-002

Database Case: Pearl River Freight Wharf Company v. Foshan Port Wharf Company

Judicial dissolution requires severe operational difficulty, material loss to shareholder interests, and the failure of alternative remedies. A company that has long ceased operations, cannot realize its business purpose, and offers no realistic exit through share transfer may be dissolved by court order.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Shareholder status and equity ownership Database case Database ID 2024-08-2-267-003

Database Case: Shanghai Real Estate Company v. Shanghai Property Management Company

In a shareholder-inspection action, signing a share transfer agreement does not automatically terminate shareholder status. If the plaintiff remains the registered shareholder externally, remains recorded internally, and no effective judgment has stripped that status, the plaintiff may still exercise inspection rights.

People's Court Case Database (reviewed by the Supreme People's Court) 2025
Loyalty and diligence Database case Database ID 2024-08-2-270-002

Database Case: Shanghai Management Consulting Co. v. Shanghai Enterprise Management Co.

In a closely held company, a board resolution that substantively alters the articles' allocation of power among the shareholders' meeting, the board, and the general manager is effectively an amendment of the articles. Such matters must be decided by the proper organ under the articles, and an ultra vires board resolution should be rescinded.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Representative and derivative enforcement Database case Database ID 2024-17-5-202-006

Database Case: Chen Mou v. Yu Mou, Zhang Mou, and Company A

A shareholder derivative action is brought for the company's benefit, and the fruits of success belong to the company. Once the case moves into the enforcement stage, if the company still fails to assert its rights, the shareholder who brought the derivative action may seek enforcement of the effective judgment in order to continue protecting the company's interests. This is a proper extension of derivative-action standing into enforcement.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Loyalty and diligence Database case Database ID 2024-08-2-270-003

Database Case: Shanghai Cold Storage Co. v. Shanghai Cold-Chain Logistics Co.

The employee-supervisor requirement, including both qualification and election procedure, is a mandatory validity rule under the Company Law. If the appointed person is not actually an employee and the democratic election process is defective, the company resolution on supervisory-board composition is invalid and the board must be reconstituted under law and the articles.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Shareholder status and equity ownership Database case Database ID 2024-08-2-270-001

Database Case: Wu Mou v. Beijing Company et al.

The nature of a share-transfer clause turns on the parties' true intent. Where the transfer is fundamentally meant to secure a debt, it constitutes an equity transfer by way of security. The nominal transferee shareholder generally enjoys only a priority security interest within the secured scope, not substantive shareholder powers such as participating in decisions, appointing managers, or receiving dividends, and its vote cannot support the formation of a shareholders' resolution.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Corporate resolutions and governance structure Database case Database ID 2024-10-2-270-001

Database Case: Commerce Company v. Real Estate Company

During the five-year transition period under the Foreign Investment Law Implementation Regulation, an existing foreign-invested enterprise that seeks to realign its governance under the Company Law must still comply with the allocation of authority and procedures set by its original joint-venture contract and articles, and must first adopt a valid amending resolution under that original framework. A shareholders' resolution that bypasses those original governance documents should be rescinded.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
VAM, buyback, and earnout Database case Database ID 2023-08-2-308-002

Database Case: Nanjing Equity Investment Partnership v. Fang Moumou, Liang Moumou et al.

A buyback clause tied directly to the short-term secondary-market share price or market capitalization of a listed company disrupts securities-market order and harms the public interest, and is therefore invalid. Where a VAM-style buyback clause should have been cleared before listing but was concealed and undisclosed, investors cannot later enforce that clause after the company has gone public.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Shareholder status and equity ownership Database case Database ID 2023-08-2-262-009

Database Case: Lv Moumou v. Zhao Moumou, Gansu Investment Company et al.

Because a joint-stock company does not share the personal-association constraints of a limited liability company, the actual investor's request for registration should not automatically be subjected to the LLC requirement of majority consent from other shareholders. Where the nominee arrangement is valid and the investor actually contributed or subscribed capital, the court may recognize the investor's shareholder status and order registration.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Profit-distribution remedies Database case Database ID 2023-08-2-274-003

Database Case: Zhao Mou, Wang Mou et al. v. Beijing Company and Liu Mou et al.

Where no profit-distribution resolution exists, minority shareholders seeking direct judicial relief on an abstract profit-distribution claim must at least show actual distributable profits after losses, tax, and reserve requirements, and also show abuse by controlling shareholders that caused the company not to distribute profits. Without both conditions, the claim should fail.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Related-party transactions and tunneling Database case Database ID 2023-16-2-276-002

Database Case: Company A v. Gao Moumou and Cheng Mou

The Company Law does not prohibit related-party transactions as such, but directors and senior managers owe duties of loyalty, diligence, and disclosure. Whether a related-party transaction harmed the company requires substantive review of the transaction structure, commercial necessity, and price fairness; profits siphoned through unnecessary intermediary arrangements may be treated as company loss recoverable from the responsible persons.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
Inspection rights and corporate books Database case Database ID 2023-08-2-267-002

Database Case: Sun Moumou v. a Beijing Technology Company

A shareholder may inspect and copy the charter, meeting records, executive-director decisions, supervisor decisions, and financial reports without proving a purpose, but inspection of books, vouchers, and underlying documents remains subject to the improper-purpose limitation. Where the shareholder or close relatives control affiliated businesses that compete substantially with the target company in business scope, customers, and technical services, the company may refuse access to books and source vouchers, and geographic separation alone does not defeat a finding of competition.

People's Court Case Database (reviewed by the Supreme People's Court) 2024
VAM, buyback, and earnout Database case Database ID 2024-08-2-269-001

Database Case: Shanghai Company v. Shanghai Equity Investment Center et al., with Ye Moumou as Third Party

The court characterized the repurchase obligation arising after failure of the VAM arrangement as a conditional internal equity transfer rather than an ordinary transfer to an outside third party, and therefore held that statutory shareholder pre-emption rules did not apply. Where the original shareholders jointly undertook an irrevocable joint-liability obligation, the investor could enforce joint repurchase liability against them.

People's Court Case Database (reviewed by the Supreme People's Court) 2020

Comparative case

0
Comparative case law Comparative case [2024] HC(A)

Goh Jin Hian v Inter-Pacific Petroleum Pte Ltd

The case brief frames directors as 'sentinels, not sleuths', useful for comparing oversight expectations with Chinese law.

Singapore Judiciary Case Brief 2025
Comparative case law Comparative case [2018] SGCA 33

Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters

The Sakae litigation is a leading Singapore authority at the intersection of minority oppression and fiduciary duties, offering a detailed treatment of related-party transactions, diverted opportunities, and remedial design.

Court of Appeal of Singapore 2018
Comparative case law Comparative case [2016] SGCA 65

Ting Shwu Ping v Scanone Pte Ltd

Ting Shwu Ping clarifies the role of quasi-partnership analysis and equitable expectations in Singapore oppression actions, and gives important guidance on valuation when the court orders a buyout remedy.

Court of Appeal of Singapore 2016
Comparative case law Comparative case [2015] 18 HKCFAR 501

Kam Leung Sui Kwan v Kam Kwan Lai and Others (Yung Kee Holdings)

The Yung Kee dispute became a leading Hong Kong authority on winding up offshore holding companies and the routes of minority relief, while clarifying the court's jurisdiction over foreign holding structures.

Hong Kong Court of Final Appeal 2015
Comparative case law Comparative case 88 A.3d 635 (Del. 2014)

Kahn v. M&F Worldwide Corp.

MFW held that a controller freeze-out can receive business-judgment review instead of entire-fairness review when, from the outset, it is conditioned on both approval by an independent special committee and an informed majority-of-the-minority vote.

Supreme Court of Delaware 2014
Comparative case law Comparative case [2013] SGCA 11

Ang Thiam Swee v. Low Hian Chor

Ang Thiam Swee gave a leading account of the leave threshold under s 216A of the Companies Act, stressing that motive alone is not decisive; the key question is whether the proposed derivative action genuinely serves the company's interests, with good faith and corporate benefit assessed together.

Court of Appeal of Singapore 2013
Comparative case law Comparative case [2013] UKSC 34, [2013] 2 AC 415

Prest v Petrodel Resources Ltd

Prest narrowed U.K. veil-piercing doctrine by distinguishing concealment from evasion, emphasizing that true veil piercing is exceptional and cannot displace ordinary rules of separate corporate personality on general fairness grounds.

Supreme Court of the United Kingdom 2013
Comparative case law Comparative case [2010] SGCA 7

Over & Over Ltd v Bonvests Holdings Ltd and another

Over & Over is a leading Singapore oppression case, emphasizing overall unfairness as the core inquiry and examining how rights issues, related-party dealings, and controller-backed arrangements affect minority shareholders.

Court of Appeal of Singapore 2010
Comparative case law Comparative case (2008) 11 HKCFAR 370

Waddington Ltd v Chan Chun Hoo Thomas and Others

Waddington is a key Hong Kong authority on multiple derivative actions and the reflective-loss principle, confirming that multiple derivative proceedings remain available at common law while distinguishing shareholder loss from corporate loss.

Hong Kong Court of Final Appeal 2008
Comparative case law Comparative case BGHZ 159, 30 (II ZR 154/02; II ZR 155/02, 2004)

Gelatine

Gelatine refined the Holzmüller doctrine, emphasizing that unwritten reserved shareholder powers arise only when a structural measure materially diminishes the shareholders' core position.

German Federal Court of Justice 2004
Comparative case law Comparative case (2004) 7 HKCFAR 546

Re Chime Corp Ltd

Re Chime explored the boundary between derivative actions and unfair-prejudice relief, stressing that claims for wrongs done to the company should generally be pursued by or on behalf of the company.

Hong Kong Court of Final Appeal 2004
Comparative case law Comparative case BGHZ 153, 47 (II ZR 133/01, 25 Nov. 2002)

Macrotron (BGH II ZR 133/01)

Macrotron became the classic German delisting authority by treating withdrawal from the stock market as a structural step requiring shareholder involvement and an exit offer for public investors, thereby strengthening minority protection at the company-securities interface.

Federal Court of Justice (BGH) 2002
Comparative case law Comparative case [1999] 1 WLR 1092

O'Neill v Phillips

O'Neill v Phillips is a leading case on unfair-prejudice relief, stressing that minority shareholders' legitimate expectations must rest on an identifiable legal or equitable foundation.

House of Lords 1999
Comparative case law Comparative case BGHZ 135, 244 (II ZR 175/95, 1997)

ARAG/Garmenbeck

ARAG/Garmenbeck clarified that the supervisory board must independently assess the corporation's claims against management and actively decide whether to pursue them in the company's interest, making it a cornerstone of German director-liability law.

German Federal Court of Justice 1997
Comparative case law Comparative case 698 A.2d 959 (Del. Ch. 1996)

In re Caremark International Inc. Derivative Litigation

Caremark supplied the canonical formulation of board oversight: directors may face liability where they utterly fail to attempt to establish a reasonable information and reporting system.

Delaware Court of Chancery 1996
Comparative case law Comparative case 506 A.2d 173 (Del. 1986)

Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.

Revlon held that once the sale or breakup of the company becomes inevitable, the board's role shifts from defenders of the corporate bastion to auctioneers charged with obtaining the best price reasonably available for shareholders.

Supreme Court of Delaware 1986
Comparative case law Comparative case 488 A.2d 858 (Del. 1985)

Smith v Van Gorkom

The court held that approving a cash-out merger without adequate information, a fairness opinion, or a meaningful deliberative process amounted to grossly deficient board decision-making and became a landmark duty-of-care case.

Supreme Court of Delaware 1985
Comparative case law Comparative case 493 A.2d 946 (Del. 1985)

Unocal Corp. v. Mesa Petroleum Co.

Unocal established Delaware's enhanced-scrutiny framework for takeover defenses: the board must first show reasonable grounds for perceiving a threat to corporate policy and effectiveness, and then show that the response was proportionate to that threat.

Supreme Court of Delaware 1985
Comparative case law Comparative case 457 A.2d 701 (Del. 1983)

Weinberger v. UOP, Inc.

Weinberger reshaped Delaware review of controller squeeze-outs by emphasizing that entire fairness encompasses both fair dealing and fair price, while relaxing older, rigid valuation and cause-of-action limits.

Supreme Court of Delaware 1983
Comparative case law Comparative case BGHZ 83, 122 (II ZR 174/80, 1982)

Holzmüller

Holzmüller launched the German doctrine of unwritten reserved shareholder powers, requiring general-meeting involvement when management undertakes structural measures that profoundly affect shareholder rights and interests.

German Federal Court of Justice 1982
Comparative case law Comparative case [1974] AC 821

Howard Smith Ltd v Ampol Petroleum Ltd

Howard Smith established that directors must exercise corporate powers for proper purposes and cannot deploy share issuances simply to alter the outcome of a control contest.

Judicial Committee of the Privy Council 1974
Comparative case law Comparative case [1973] AC 360

Ebrahimi v Westbourne Galleries Ltd

Ebrahimi is the classic UK authority on quasi-partnership companies and just-and-equitable winding up, emphasizing that equitable considerations may qualify strict constitutional rights and majority rule in closely held companies built on personal trust.

House of Lords 1973
Comparative case law Comparative case 280 A.2d 717 (Del. 1971)

Sinclair Oil Corp. v. Levien

Sinclair Oil distinguished ordinary controller domination from true self-dealing: intrinsic-fairness review applies only when the controller extracts a benefit from the subsidiary to the exclusion and detriment of the minority, while non-self-dealing business decisions remain protected by the business judgment rule.

Supreme Court of Delaware 1971
Comparative case law Comparative case [1942] UKHL 1, [1967] 2 AC 134

Regal (Hastings) Ltd v Gulliver

Regal (Hastings) is a classic U.K. fiduciary-duty case holding that directors who profit by reason of their fiduciary position must account to the company, even if the company could not itself have taken the opportunity and the directors acted in good faith.

House of Lords 1942
Comparative case law Comparative case [1897] AC 22

Salomon v A Salomon & Co Ltd

Salomon is the classic authority for separate corporate personality and limited liability, confirming that a duly incorporated company is legally distinct from its founder and controlling shareholder.

House of Lords 1897
Comparative case law Comparative case (1843) 2 Hare 461

Foss v Harbottle

Foss v Harbottle articulated the classic rule that wrongs to the company should generally be pursued by the company itself and that majority rule prevails, providing the foundation for later derivative and minority-protection exceptions.

Court of Chancery 1843