Article 54 of China's new Company Law states that if a company is unable to meet its financial obligations, creditors have the right to request that shareholders fulfill their capital contributions in advance. Given this provision, it is anticipated that many creditors will seek to hold shareholders accountable for any outstanding contributions. However, external creditors often face challenges in accurately assessing the company's operational status and determining whether shareholders have fully met their contribution obligations, as this information is typically regarded as confidential. 

From a creditor's perspective, what strategies can be employed to make an initial assessment of shareholders' contributions based on observable factors? This assessment could serve as a preliminary guide for creditors considering potential legal action. It is important to note that, following the new Company Law's reinstatement of the paid-in capital system for joint-stock companies, the term "company" in this context specifically refers to limited liability companies.

It is important to clarify the preliminary methods for evaluating whether shareholders have made actual capital contributions. Please keep in mind that, without thorough court examination, there is no method that can definitively ascertain the actual capital contribution status of shareholders for company creditors; the following approaches should be viewed as supplementary assessments.

Reviewing the Company's Annual Report 

In accordance with Articles 8 and 9 of the "Interim Regulations on the Public Disclosure of Enterprise Information (2024 Revision)," companies are required to submit their annual reports for the previous year to the market supervision and management department via the National Enterprise Credit Information Publicity System between January 1 and June 30 each year, and to publicly disclose this information. The annual report contains important details such as the amount of capital contributions made by shareholders, the timing of these contributions, and the methods used. 

Therefore, creditors can access the company's annual report through the National Enterprise Credit Information Publicity System (https://www.gsxt.gov.cn/index.html) or through third-party platforms like Qichacha. If the annual reports consistently indicate that shareholders' actual capital contributions are "0 yuan," it may lead to a preliminary conclusion that the shareholder has not made any actual contributions. However, based on my experience in handling cases, many companies may not pay close attention when completing their annual reports, resulting in omissions or inaccuracies in the contribution information. There are instances where a company's annual report shows that shareholders made contributions in one year, but the following year indicates that no contributions have been made. Therefore, while the annual report can serve as a preliminary reference, it is advisable to combine this information with other external materials for a more comprehensive assessment.

Inquiry into Judgments and Company Litigation Information

While the online accessibility of judgments has diminished, we can consider the scenario where creditors seek to include shareholders as parties in enforcement actions. If the court supports these applications, the creditors may then pursue the reinstatement of the original case against both the company and the newly added shareholders. At this stage, information available on the Supreme Court's execution information disclosure website, as well as third-party platforms like Qichacha, may reveal that the shareholders and the company are involved in the same case regarding the reinstatement of execution. Should creditors come across such information, they may reasonably infer that the shareholders have been added to the enforcement proceedings due to unpaid capital contributions. Furthermore, if publicly available judgments or litigation details indicate that creditors have successfully compelled shareholders to fulfill their capital contribution obligations in advance, as stipulated in Article 54 of the new Company Law, it becomes clear that the shareholders have yet to meet their contribution requirements.

Inquiry into Corporate Business Registration Files

In accordance with Article 5 of the "Measures for Inquiry into Corporate Registration Files," revised on March 13, 2003, corporate registration files are categorized into two types: "machine-readable file inquiries" and "paper file inquiries," based on how they are accessed. Machine-readable file inquiries primarily encompass corporate registration details, such as the company's name and address, approval documents, and any changes to corporate matters. As internet technology continues to advance, these machine-readable files typically align with the basic information about enterprises that is publicly available in the National Enterprise Credit Information Publicity System. On the other hand, paper file inquiries consist of all original registration documents for the approved registered enterprise. Consequently, paper files are often the preferred documents in corporate disputes and are commonly referred to as "internal files."

In practice, paper files house all original registration documents for a business, excluding certain confidential materials. These files are quite comprehensive and include essential documents such as the articles of association, resolutions from shareholder meetings, and equity transfer agreements that arise during the company's formation and any subsequent changes. Corporate creditors often engage lawyers—who can typically access corporate internal files in most cities—to retrieve business registration documents and focus on the following key items:

1. Capital Verification Report 

For businesses registered prior to 2013, a "Capital Verification Report" is typically included in the registration files. Some companies registered after 2013 may also possess this report due to industry regulations. Creditors may find it challenging to ascertain the authenticity of the "Capital Verification Report" based solely on its appearance. Therefore, it is crucial for creditors to verify whether the registered capital aligns with the actual contribution capabilities of the shareholders and whether a bank confirmation letter accompanies the report. Based on the author's experience, when accounting firms issue a "Capital Verification Report," they usually send a confirmation letter to the bank to verify that the shareholders' contributions have been deposited into the company's capital verification account and to confirm the total funds retained in that account. 

However, it is not uncommon for some shareholders to lack the actual capacity to contribute, leading them to transfer the same amount of funds multiple times and then withdraw them immediately. In such cases, creditors may only see multiple deposits in the bank transfer receipts without realizing that the funds were withdrawn shortly after verification. If the "Capital Verification Report" does not follow the bank confirmation procedure and instead relies on the shareholders' transfer receipts, it raises concerns about the authenticity of the contributions. Creditors can request the court to obtain the company's bank transaction records after initiating a lawsuit to verify the legitimacy of the "Capital Verification Report."

2. Company Articles of Association 

For companies registered after 2013, if the articles of association exhibit either of the following two scenarios, there may be significant doubts regarding the shareholders' actual contributions: 

The articles do not specify a contribution deadline, stating that "shareholders will determine the contribution plan based on the company's operational needs." 

The registered capital is excessively high, with an unreasonably extended timeline for shareholders to fulfill their contributions (e.g., 20 years post-establishment). 

Both scenarios suggest a clear intention by shareholders to evade their contribution obligations due to the lack of a specified deadline or an excessively long timeframe.

3. Annual Audit Report 

While annual audit reports typically do not appear in business registration files, some companies may include them for various reasons, such as applying to be removed from the list of companies with operational irregularities or justifying gratuitous equity transfers. If creditors discover an annual audit report within the company's internal files, they should scrutinize the "paid-in capital" section of the balance sheet. Comparing the paid-in capital amount with the actual contributions outlined in the articles of association and shareholder meeting resolutions can help verify whether the contributions are accurately reflected in the company's balance sheet. Additionally, some annual audit reports may contain financial statement notes detailing the contributions made by each shareholder, which creditors should also consider.

4. Inquiry into Basic Information of Private Companies 

In certain regions, the "Basic Information of Private Companies" serves as the homepage of the internal files, indicating the subscribed and paid-in capital amounts of the company's shareholders. However, the accuracy of the paid-in capital information on this card is often limited. 

Some shareholders may have made contributions but may not be aware that the local business registration authority maintains a card recording this information. Consequently, shareholders might not have prompted the company to update the card in a timely manner. Therefore, relying solely on the information presented on this card to assess actual contributions may not be sufficient, as its accuracy is generally low.