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Ningbo divorce limited liability company property how to divide

Ningbo Author：LuXu WANG

Divorce involves the division of shares in a limited liability company, which is much more complicated than the division of real estate and deposits. Different types of companies, different number of shareholders, different operating conditions, the treatment is also very different. Improper handling not only affects the division of property, but may also affect the normal operation of the company.

1. legal basis

article 1087 of the the People's Republic of China Civil Code stipulates that in the event of divorce, the joint property of the husband and wife shall be disposed of by agreement between the two parties; if the agreement fails, the people's court shall make a judgment in accordance with the specific circumstances of the property and in accordance with the principle of taking care of the rights and interests of the children, the woman and the non-fault party.

Article 73 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Code of the the People's Republic of China Civil Code stipulates that the people's court hears divorce cases involving the division of the joint property of husband and wife in the name of one party in a limited liability company, and the other party is not a shareholder of the company, according to the following circumstances: (I) the husband and wife agree to transfer part or all of the capital contribution to the spouse of the shareholder, and more than half of the other shareholders, and if other shareholders clearly waive the right of preemption, the spouse of the shareholder can become a shareholder of the company; (II) the husband and wife agree on the transfer share and transfer price of the capital contribution, more than half of the other shareholders do not agree to the transfer, but are willing to purchase the capital contribution on the same terms, the people's court may divide the property obtained from the transfer; more than half of the other shareholders do not agree to the transfer, if he is also unwilling to purchase the capital contribution on the same terms, he shall be deemed to have agreed to the transfer, and the spouse of the shareholder may become a shareholder of the company.

2. core points

  1. one-man company suggests discount compensation. A one-person company in which one of the spouses holds 100 per cent of the shares is usually acquired by one of the spouses and paid a discount to the other, taking into account the nature of the company and the partnership after the divorce.
  2. The equity of the husband and wife company can be divided equally. Shareholders only husband and wife of the company, the proportion of industrial and commercial registration is not equal to the husband and wife internal agreement, divorce when the general average division of equity.
  3. Shareholders involved in third parties need to respect the right of first refusal. If the company has other shareholders, the spouse wants to become a shareholder with the consent of more than half of the other shareholders and waives the right of first refusal.
  4. The value of the company needs to be assessed and determined. It is usually necessary to evaluate the net assets and equity value of the company before dividing the equity, as the basis for discount compensation.

3. boundary conditions

  • if the articles of association of the company have special provisions on the transfer of equity, the provisions of the articles of association shall be observed.
  • The portion of the equity acquired by one party before marriage, the post-marital appreciation and dividends may involve the division of common property. The assessment should be based on the pre-marital shareholding base and the post-marital appreciation and dividends separately, and the post-marital dividends and the value-added portion based on post-marital operations are usually included in the scope of common property.
  • Where the company's debt is mixed with the personal property of shareholders, it may affect the value of the equity and the manner of division. If the Ningbo court cannot prove that the company's property is independent of personal property, the Ningbo court will order joint and several liability for the company's debts, and clarify the boundary between the company's debts and personal property before the division, which will directly affect the equity valuation and the amount of discount compensation.

4. operational steps

  1. combing the company's industrial and commercial information: confirm the company type, shareholder composition, shareholding ratio, registered capital, etc.
  2. Evaluate the value of the company: entrust a professional institution to evaluate the value of equity.
  3. Negotiate a division plan: determine whether one party holds the shares and compensates the other party, or divide the shares.
  4. Soliciting opinions from other shareholders: If third-party shareholders are involved, the consent of more than half of the shareholders is required and the right of first refusal is waived.
  5. For industrial and commercial change registration: after the division plan is determined, the equity change procedures shall be handled in a timely manner.

5. common mistakes

  • myth 1: The proportion of industrial and commercial registration is the proportion of division.. The proportion of industrial and commercial registration of a husband and wife company is not equal to the agreement on the property of the husband and wife, and is generally divided equally when divorcing.
  • Myth 2: Equity can only be half of one person. The method of equity division is flexible, and can be compensated at a discount, sold by auction or withdrawn by one party holding shares and the other party holding shares.
  • Myth 3: Don't worry about corporate debt. The company's debts should be sorted out before the equity split to avoid subsequent unexpected liability.

Practical Experience of 6. Lawyers

divorce involves limited liability companies, which are usually more complex than property and savings, because there are not only husband and wife, but also the company and other shareholders. The first step is to classify companies: one-person companies with one spouse holding shares, "husband and wife companies" with only two spouses, and companies with third-party shareholders are handled differently. One-person company takes into account that it is difficult for two people to cooperate after divorce. In practice, it is more common for one party to obtain the company and pay a discount to the other party. The proportion of industrial and commercial registration of husband and wife company is not equal to the internal agreement of husband and wife, and divorce is generally handled according to the idea of average division.

Once there are third-party shareholders in the company, special attention should be paid to the rights of other shareholders. If one of the spouses is not a shareholder and wants to transfer the capital contribution to his or her own name to become a shareholder, usually with the consent of a majority of the other shareholders, and the other shareholders have to waive the right of first refusal; if the other shareholders do not agree to the transfer but are willing to purchase on the same terms, the price of the transfer proceeds can be divided. Therefore, before proceeding with the division of litigation, it is best to understand the company's shareholding structure and the attitude of other shareholders, and think clearly about the path of "whether you can become a shareholder". Don't find that the card is in the hands of others until the execution or transfer of ownership.

No matter what type, there is no way around a premise: first find out how much the company is worth. Dividing the equity or determining the discount, usually need to make an assessment of net assets, equity value, otherwise the number is not accurate; at the same time, pay attention to the articles of association of the company on the transfer of equity has no special agreement, there is an agreement to comply. There is also an often overlooked point: if the equity is acquired by one party before marriage, the post-marital appreciation and dividends may involve common property, and the valuation should separate the base of the pre-marital shareholding from the post-marital appreciation. Split as far as possible to discount, reduce the way of business shock landing, don't in order to fight for equity to drag the company down, that is a loss to both sides.