When a company becomes insolvent before shareholders’ capital contribution deadlines expire, can creditors demand repayment from shareholders whose capital contribution deadlines haven’t yet expired? In China, we sometimes encounter situations where a company can no longer repay debts, one or two shareholders have promised to contribute capital but haven’t paid their capital contribution yet. Under such circumstances, the latest China company law judicial interpretations permit demanding repayment from shareholders whose contribution deadlines haven’t yet expired. However, this is contingent upon the company meeting bankruptcy criteria without having filed for bankruptcy. In other words, creditors must have prevailed in court, the court’s enforcement division must have searched the company’s property, and a final termination of search must have been issued, confirming the company lacks assets to repay debts. If the company still fails to file for bankruptcy, creditors may add shareholders whose capital contribution deadlines have not yet expired.
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