How to divide the equity of Ningbo husband and wife after divorce- Zhiheng Law Firm

When one spouse becomes a shareholder of a limited company with common property after marriage, the division of shares in the event of divorce must comply with the provisions of the Civil Code on marriage and family, as well as the provisions of the Company Law on the transfer of shares and the right of first refusal of shareholders. When the interests of other shareholders are involved, they cannot be divided directly in half according to the joint property of the husband and wife.

1. one sentence conclusion

the equity of a limited company held by one of the spouses may be owned by one of the spouses through negotiation and compensated at a discount, or transferred to the spouse.

2. legal basis

article 1062 of the Civil Code: The income from production, operation and investment earned by the husband and wife during the existence of the marriage relationship shall be the joint property of the husband and wife.
Article 1087 of the Civil Code: At the time of divorce, the common 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 based on the specific circumstances of the property.
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: If the people's court hears a divorce case involving the division of the joint property of the 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, it shall be dealt with separately according to the following circumstances:
if both 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 agree, and the other shareholders clearly give up the preemptive right, the spouse of the shareholder can become a shareholder of the company;
if 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 of capital contribution;
if more than half of the other shareholders do not agree to the transfer and are unwilling to purchase the capital contribution on the same terms, they shall be deemed to have agreed to the transfer, and the spouse of the shareholder may become a shareholder of the company.
Article 84 of the Company Law: Where a shareholder transfers his equity to a person other than a shareholder, he shall notify the other shareholders in writing of the quantity, price, payment method and time limit of the equity transfer, and the other shareholders shall have the right of first refusal under the same conditions.

3. core points

equity is the joint property of husband and wife or personal property.

The equity acquired by the joint property of the husband and wife after marriage belongs to the joint property of the husband and wife, regardless of whose name it is registered, except where the contribution of personal property before marriage or the express agreement after marriage is personal property.

Articles of incorporation may pre-exclude spouses from becoming shareholders

the articles of association may stipulate that when a shareholder's equity is divided as a result of divorce, the spouse cannot become a shareholder and can only acquire the property value corresponding to the equity. The agreement is legally valid.

Spouse to become a shareholder requires the consent of more than half of the shareholders and waiver of the right of first refusal.

If there are no special restrictions in the articles of association of the company, the spouse needs the consent of more than half of the other shareholders to become a shareholder of the company, and the other shareholders give up the right of first refusal.

If other shareholders do not agree or are unwilling to buy, they shall be deemed to agree to the transfer.

If more than half of the other shareholders do not agree to the transfer, but are unwilling to purchase on the same terms, they are deemed to agree to the transfer in law, and the spouse can become a shareholder.

Equity value can be determined by appraisal or negotiation

if the equity is owned by one party, the other party shall be compensated at a discount.

4. boundary conditions

if the articles of association stipulate that the spouse may not become a shareholder, the spouse can only divide the realized value of the equity and cannot become a shareholder.
The division of shares does not affect the right of first refusal of other shareholders of the company, and a written notice procedure must be carried out.
If the equity acquired by one party before marriage, the value-added portion of the equity acquired after marriage is a natural value-added or fruit, it is still personal property; if the value-added portion of the equity acquired after marriage is a natural value-added or fruit, the value-added portion may be recognized as joint property.
Different rules apply to shares of equity or property involving listed companies, partnerships, and sole proprietorships.

5. operational steps

confirm the time of equity acquisition, the source of capital contribution, and determine whether it belongs to the joint property of the husband and wife.
Check the articles of association to see if there are provisions that restrict the spouse from becoming a shareholder.
The two parties negotiate the treatment of the equity: owned by one party and compensated, transferred to the spouse, and divided the price after the external transfer.
In the case of transfer to the spouse, the shareholder shall notify the other shareholders in writing whether to agree to the transfer and whether to waive the right of first refusal.
If other shareholders agree and waive the right of first refusal, they shall register the change of shareholders; if they do not agree but are willing to purchase, the transfer amount shall be divided.
If the negotiation fails, the appraisal institution shall be entrusted to evaluate the equity value.
The equity division plan is written into the divorce agreement or decided by the court, and the industrial and commercial change registration is handled.

For equity change registration in Ningbo, you can apply online through the "whole process electronic registration system" of Zhejiang government affairs service network, and the tax and market supervision "one thing of equity transfer" will be jointly handled, 0 times on site and immediately handled as promised. Changes in company registration items shall be applied within 30 days from the date of resolution, the materials usually include the application for registration of change, the resolution of the shareholders' meeting, the equity transfer agreement/delivery certificate, the consent document of more than half of the other shareholders (as otherwise provided in the articles of association) and the qualification certificate of the new shareholder entity.

6. common mistakes

myth 1: Equity registration in the name of one party is personal property.

The equity acquired in the joint property after marriage is the joint property of the husband and wife, even if it is registered in the name of only one party.

Myth 2: The equity is divided 50-50 directly in divorce.

The division of the shares of a limited company involves the right of first refusal of other shareholders and cannot be divided equally as directly as deposits.

Myth 3: Spouses can be shareholders if they want.

Whether a spouse can become a shareholder depends on the company's articles of association and whether other shareholders agree and waive the right of first refusal.

Myth 4: The value of equity is calculated on the basis of registered capital.

The equity value shall be comprehensively assessed according to the company's net assets, profitability and market prospects, and the registered capital is for reference only.