Supreme Court Guidance Case - Although the company is profitable, the shareholders will not be able

Although the company is profitable, the shareholders will not be able to make decisions for a long time, but they can also dissolve the company.

 

Referee

When the company's operation and management is seriously difficult, shareholders who hold more than 10% of the voting rights of all shareholders of the company may request the people's court to dissolve the company. Judging from "whether the company's operation and management has serious difficulties", it should conduct a comprehensive analysis from the operational status of the company's internal institutions and the company's humanity. Although the company is in a profitable state, its shareholder mechanism has long been out of order and cannot make effective resolutions. It can be considered that the company's operation and management has serious difficulties, and shareholders can request to dissolve the company.

 

Brief introduction

Lin Fangqing and Dai Xiaoming are the shareholders of Gloria Corporation, each holding 50% of the shares, Dai Xiaoming is the legal representative and executive director of the company, and Lin Fangqing is the general manager of the company and the company's supervisor. Since 2006, the business philosophy of the two shareholders has changed, and the contradictions have escalated and are in a stalemate. From 2006 to 2009, Gloria has never successfully held a shareholder meeting. During the period, the industry association had twice organized the two sides to mediate.

Later, Lin Fangqing filed a complaint with the Suzhou Intermediate People's Court, saying that the company's operation and management had serious difficulties, was deadlocked and could not be resolved by other means, and its rights and interests suffered major damages, requesting the court to dissolve the company. However, Dai Xiaoming believes that the company's operating status is good and does not meet the company's dissolution. The contradiction between the two has other solutions, and it is not necessary to force the dissolution of the company through judicial procedures.

The Suzhou Intermediate People’s Court rejected Lin Fangqing’s claim. After the verdict was pronounced, Lin Fangqing refused to accept the appeal and appealed to the Jiangsu High Court. The Jiangsu High Court passed the trial and finally decided to dismiss the Kailai Company.

 

The court held that

The court held that “the management of Gloria has experienced serious difficulties”, the main reasons are:

1. Judging whether the company's operation and management is seriously difficult, it should conduct a comprehensive analysis from the current status of the company's shareholders' meeting, the board of directors or the executive directors and the board of supervisors or supervisors. The key point of "the company's management is seriously difficult" is that there are serious internal obstacles in the management of the company. For example, the failure of the shareholders' meeting mechanism and the inability to make decisions on the company's operation and management should not be understood as a lack of company funds and serious losses. Sexual difficulties.

2. Since Gloria's internal mechanism has been unable to operate normally and cannot make decisions on the company's operations, even if it is not in a loss situation, it cannot change the fact that the company's operation and management have been seriously difficult.

3. Since the internal operation mechanism of Gloria Company has long been out of order, Lin Fangqing’s shareholder rights and supervisory powers have been in a state of inability to exercise for a long time. The purpose of investing in Gloria’s company cannot be realized, the interests are seriously damaged, and the Gloria’s deadlock is passed through other The route cannot be solved for a long time.

4. Lin Fangqing holds 50% of the equity of Gloria, and is also in compliance with the conditions of the company law that the shareholders who filed the company's dissolution lawsuit must hold more than 10% of the voting rights of all shareholders of the company.

 

Relevant legal basis

Company Law

Article 182 The company's operation and management has serious difficulties. If it continues to survive, it will cause significant losses to shareholders' interests. If it cannot be resolved through other means, shareholders who hold more than 10% of the voting rights of all shareholders of the company may request the people's court to dissolve. the company.

Judicial Interpretation of Company Law II

Article 1 A shareholder who holds more than 10% of the voting rights of all shareholders of the company individually or in aggregate shall file a dissolution of the company's lawsuit in one of the following matters, and in accordance with the provisions of Article 182 of the Company Law, the people's court shall accept:

(1) The company cannot hold a shareholders' meeting or a general meeting of shareholders for more than two years, and the company's operation and management are seriously difficult;

(2) When the shareholders vote, they cannot reach the statutory or the proportion stipulated in the company's articles of association. For more than two years, they cannot make a valid shareholders' meeting or a resolution of the shareholders' meeting. The company's operation and management are seriously difficult;

(3) The company's directors have long-term conflicts and cannot be resolved through the shareholders' meeting or the shareholders' meeting. The company's operation and management have serious difficulties;

(4) Other serious difficulties occurred in the operation and management, and the continued existence of the company will result in significant losses to the shareholders' interests.

 

Case search

Jiangsu Provincial Higher People's Court "Lin Fangqing v. Changshu Kailai Industrial Co., Ltd., Dai Xiaoming Company Dissolution Dispute Case" Civil Judgment (2010) Su Shang End Word No. 0043.