The judicial determination that the investment is actually a private loan
Investment and borrowing
Investment generally refers to the process in which a certain economic entity converts certain property into capital in order to obtain expected returns. It is a rights and obligations relationship formed by each entity providing capital, physical and other production factors to establish an economic entity and jointly operate, share risks and benefits. Its essential characteristics are joint investment, joint operation, shared interests and shared risks.
A loan contract is a contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest, forming a debt relationship between the two parties.
Civil legal acts concluded between other civil entities other than the Financial Institution Group whose business is the loan business, with the lending of funds and the return of principal and interest as the main rights and obligations, shall be subject to judicial trial in accordance with the relevant provisions of private lending.
typical case
(2020) In the Supreme Court Minshen No. 7050 loan contract dispute case, Fu sued the court of first instance to request the termination of the contract, the return of the loan, and the payment of interest and attorney fees. The court of first instance supported the plaintiff's claim, and Siyi Company filed an appeal. The second-instance Court upheld the first-instance judgment. Siyi Company filed a retrial application. The Supreme People's Court ruled to reject the retrial application. The basic cases and judgment results are as follows:
Basic case:
In April 2015, Shiyi Company and Fu signed the "Investment Cooperation Agreement". The preconditions for signing the agreement stipulate that after Shiyi Company finances, the overall investment amount of the project is 100 million yuan. When the operating expenses during the project investment and construction period exceed 100 million yuan, the additional part is responsible for Shiyi Company, and Fu does not make additional investment.
Article 2 "Payment of a certain investment and income calculation" Item 1 stipulates that an investment of 13 million yuan will be remitted to the account designated by Shiyi Company at the time agreed by both parties, and Shiyi Company will issue a receipt for the payment; Item 3 stipulates that after the signing of this agreement, the dividend will be calculated at 15% of the actual income during the construction period; after the construction period expires, if the annual net income is less than 30 million yuan, the dividend will be calculated at 30 million yuan, and if it exceeds 30 million yuan, the dividend will be calculated at the actual net income. Shiyi Company promises to pay a certain amount of income within four years. If the actual income does not reach the investment quota, the company's income will be calculated Make up for and pay to pay a certain; the fifth agreed dividend is paid once a year, settled on December 30, and paid before January
15of the following year.
Article 4 Item 4 of "Liability for breach of contract" stipulates that if losses are caused by the poor management of Siyi Company, Fu will not bear economic losses, and the ROI will be calculated according to the agreed standard. After the agreement is signed, Fu will transfer 13 million yuan to Siyi Company in six installments from April
14to June 2, 2015 through bank transfer.
During the implementation of the agreement, Fu repeatedly asked Lin, a supervisor of Shiyi Company, to pay his fixed income, but Shiyi Company did not fulfill it. Disputes occurred between the two parties and negotiations failed many times. Fu's appeal: 1. Cancel the Investment Cooperation Agreement; 2. Shiyi Company repaid 13 million yuan to Fu, paid 6.24 million yuan in interest, and paid a lawyer's agency fee.
Referee result:
The court of first instance held that, from the "Investment Cooperation Agreement", the income of Fu is in the form of a fixed return, and there is a guarantee clause, which makes it clear that the nature of the 13 million yuan involved in the case is a loan, not an investment; the loss of the company's operation is borne by itself, Fu does not bear the loss, but regardless of the profit and loss, the income must be calculated according to the agreed standard. It can be seen from the above agreement that Fu does not participate in the operation and management of the company, and the funds he invests do not bear any business risks, only receive a fixed amount of income, so it is not difficult to see that the real meaning of the company is to borrow money; the purpose of the agreement is to invest in the name. To pay back a loan secured by a share of equity.
Therefore, the legal relationship between the parties in this case is essentially a private loan, not an investment. According to the agreement between the two parties, Siyi Company has been delaying the performance of the main debt for the payment of interest, paying certain multiple reminders, and giving a reasonable period of time, but within a reasonable period, Siyi Company still fails to perform. According to the provisions of Article 94, paragraph 3 of the Contract Law, if one of the parties delays the performance of the main debt and fails to perform within a reasonable period of time after being urged, the parties may terminate the contract.
Fu's claim to terminate the agreement between the two parties according to the law is reasonable and supported. Regarding the issue of payment and interest payment involved in the case. After receiving the 13 million yuan paid by Fu, the company failed to pay the interest on time according to the agreement between the two parties, resulting in the failure to perform the agreement signed by the two parties. It should be cancelled according to law. The company should repay the loan involved in the case to Fu and pay the corresponding interest according to the agreement.
Due to the clear agreement between the parties in the "Investment Cooperation Agreement" on the bearing of litigation costs (including attorney fees), the losing party shall bear the benefits of the company according to the agreement. Accordingly, the court of first instance ruled that: 1. The Investment Cooperation Agreement signed by a certain company and the company is cancelled; 2. The company shall repay a certain principal 13 million yuan within ten days after the judgment takes effect; 3. The company shall pay a certain 6.24 million yuan in interest within ten days after the judgment takes effect (based on 13 million yuan, from June 2016 to June 2018, the interest will be calculated at an annual interest rate of 24%); 4. The company shall pay a lawyer's representation fee of 190,000 yuan within ten days after the judgment takes effect.
The second-instance Court held that, from the content of the Investment Cooperation Agreement, it does not have the characteristics of investment cooperation such as joint operation, shared income and shared risk, but agrees to enjoy fixed income after paying a certain capital contribution. Therefore, the investment cooperation agreement has more characteristics of borrowing. Although the industrial and commercial registration of the company changed Fu to be a shareholder of the company, Fu claimed that the act was to provide security for his loan claims.
Shiyi Company claimed that it was an equity transfer, but the agreement involved in the case was signed between Fu and Shiyi Company, and the payment was also paid to Shiyi Company. Shiyi Company failed to provide evidence to prove that Fu had signed an equity transfer agreement with the original shareholders of Shiyi Company, so it did not have the characteristics of standardized equity transfer. The company claims that it is the company's capital increase and share expansion, but the payment to the company is 13 million yuan, and the company's capital increase does not correspond to the payment amount and the amount of equity and capital contribution held by the company. Moreover, the company's capital increase and capital reduction changes occur, and the equity ratio of the company remains unchanged, so it does not have the characteristics of standardized company capital increase and share expansion.
Fu denied his participation in the operation of Shiyi Company, and Shiyi Company failed to provide evidence to prove that Fu participated in the substantive business activities of Shiyi Company. Therefore, Fu's defense that he became a shareholder of Shiyi Company and held the equity of Shiyi Company was an equity transfer guarantee, and the reasons were valid. The equity of Shiyi Company was handled to Fu as a guarantee for paying a certain creditor's right, not a real equity transfer or capital increase and share expansion.
As for the reason that Siyi Company claimed that the principal repayment period was not stipulated in the agreement between the two parties, it was not a loan. Because the contract law did not stipulate the loan period or the agreement was unclear, there were relevant provisions, so it could not deny the existence of a loan relationship between the two parties. Therefore, the first-instance judgment found that the legal relationship between Fu and Siyi Company was of a private lending nature, which was not improper.
Of course, if the interest company will pay off all the loans paid by Fu, Fu should return the equity to the interest company. Accordingly, the second-instance Court ruled: reject the appeal and uphold the original judgment.
The Supreme People's Court held that the content of the "Investment Cooperation Agreement" signed by Shiyi Company and Fu stated that the income obtained by Fu was calculated in the form of fixed returns, and it was agreed that Fu would receive ROI according to the standard regardless of the company's operation and whether it lost money. Therefore, the provisions of the "Investment Cooperation Agreement" do not have the characteristics of joint operation, shared income and shared risk.
Although the industrial and commercial registration of Shiyi Company changed Fu to be a shareholder of the company, Shiyi Company did not submit evidence to prove that Fu participated in the company's substantive business activities. Fu does not participate in the operation and management of Shiyi Company, and the funds he invests do not bear any business risks and only receive a fixed amount of income. The 13 million yuan is called investment and is actually a loan.
As far as the legal relationship between Shiyi Company and Fu A is concerned, the original trial determined that it was a private loan and was not improper. After Shiyi Company received the 13 million yuan paid by Fu A, it did not pay the interest on time as agreed by both parties. Shiyi Company shall repay the loan to Fu A and pay the corresponding interest as agreed.
In accordance with the relevant provisions of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases, the original trial determined the interest standard to be paid by the interest company based on factors such as transaction habits and market interest rates, taking into account the content and performance of the contract. It was not improper.Reject the retrial application of Shiyi Company.
referee's point of view
The focus of the dispute in such cases is whether the parties are private lending legal relations or investment relations.
In the above cases, the court of first instance and the Supreme People's Court unanimously held that if the investment agreement signed between the parties does not have the characteristics of joint operation, shared income and shared risk, but stipulates that after one party makes capital contributions, regardless of the company's operating conditions, whether it loses money or not, it will be calculated according to fixed standards and enjoy fixed ROI, and the nature of the legal relationship between the two parties should be determined as "investment, but actually lending."
Coincidentally, in the case of a private lending dispute between a media company, Liu Moumou and Shen Moumou [ (2020) Beijing 03 Minjian No. 3515], the Beijing Third Intermediate People's Court held that,
First of all, according to the relevant provisions of the Company Law, after a shareholder makes a capital contribution, the company shall issue a capital contribution certificate to it, and maintain a register of shareholders, which shall be recorded in the register of shareholders before exercising the rights of shareholders. In this case, although the three parties signed the "Investment Agreement", Shen Moumou was not included in the register of shareholders of the media company, nor did he issue a capital contribution certificate to Shen Moumou. Therefore, Shen Moumou's investment does not have the purpose of becoming a shareholder, and his investment funds cannot be regarded as equity investment funds.
Secondly, investment is a relationship of rights and obligations formed by each subject providing capital, physical and other production factors to establish an economic entity in accordance with the agreement, and jointly operating, sharing risks and interests. Its essential characteristics are joint investment, joint operation, sharing interests and sharing risks. In this case, although Shen Moumou and the media company signed the "Investment Agreement", the agreement stipulated that the media company was solely responsible for all operations of the investment project, and Shen Moumou was not allowed to interfere with the operation process of the media company for any reason, that is, Shen Moumou had no operation rights, management rights and decision-making rights for the project, nor did he bear any business risks, so it did not meet the characteristics of investment.
Once again, according to the provisions of Article 196 of the Contract Law, a loan contract is a contract in which the borrower borrows money from the lender, returns the loan at maturity and pays interest. In this case, according to the provisions of the "Investment Agreement" and "Dividend Agreement" signed by Shen Moumou and the media company, Shen Moumou invests money in the media company for a period of 6 months, and returns the investment money and pays a fixed amount of due dividends after maturity, the income is guaranteed, and Shen Moumou does not participate in the operation and management of the media company, and does not bear the risk of business losses. Therefore, the agreement signed by both parties shall be a loan contract.
Finally, according to the analysis of the actual situation of the two parties to fulfill the agreement. The "Repayment Plan", "Certificate" and "Commitment Letter" issued by the media company to Shen Moumou all stated that the media company promised to repay all the loans to Shen Moumou in batches, and the signature office also showed that the media company was the "repayer". At the same time, on January 5, 2018, the media company repaid 330 yuan to Shen Moumou through bank transfer, and the postscript on the bank certificate was "Media Company Repayment".
Therefore, the media company and Liu Moumou should be aware that there is a loan relationship between them and Shen Moumou, and they are also performed in accordance with the loan contract.
In summary, although the involved agreement is called an investment agreement, it stipulates a guarantee clause in the agreement, which does not meet the characteristics of investment risk. Therefore, the nature of the legal relationship between Shen Moumou and the media company and Liu Moumou should be a loan relationship.
Lawyer Tips
Investment relations and private loan relations/loan contract relations are two different legal relations, and they have certain similarities in capital investment, but they are prone to confusion in practice.
There are several forms of lending called investment, mainly as follows:
First, it is named investment but does not actually participate in the management of the company. Under normal circumstances, investment generally enjoys basic business decision-making rights and other rights. If only an investment agreement is signed, but the investor's right to actually participate in the management of the company's affairs is not stipulated, it is generally recognized as a loan relationship.
In the investment agreement, it is stipulated that investors enjoy fixed income and do not bear business risks. This provision is contrary to the characteristics of shared risk and shared income in investment. Fixed income is actually loan interest, and the two parties form a lending legal relationship.
The company does not issue a capital contribution certificate to the investor, does not maintain a register of shareholders, and does not record the investor in the register of shareholders. In this case, the investor's investment does not have the purpose of becoming a shareholder of the company, and generally cannot be recognized as an investment relation.
IV. If the investor fails to fulfill the statutory capital contribution procedures and fails to register for industry and commerce, in the case that the investment is actually a loan, the investor does not fulfill the statutory capital contribution procedures, that is, registers for industry and commerce as a shareholder or partner, and only uses the investor's funds, the possibility of a private lending relationship between the two parties is greater.
However, even if the formal implementation of the industrial and commercial registration procedures, and the registration situation does not match the actual investment situation, such as the typical cases mentioned in this article, it should also be tried according to the substantive situation.
Lawyer Profile
Wang Qionghua, Lawyer
, Partner Lawyer
Secretary General, Copyright Law Professional Committee of Shenzhen Law Association
Secretary General of Zhiheng Intellectual Property Center, Deputy Director of Copyright Law Professional Committee
Areas of expertise:
Intellectual property, corporate compliance, corporate counsel, civil and commercial dispute resolution
Publication representative:
"Long'an Lawyer's Interpretation of the Civil Code" Contract Editor, "Online Law Course", "Analysis of Typical Cases of People's Mediation in Futian District, Shenzhen"