Article 54 of the Company Law establishes the general rule for accelerating shareholder capital contributions, empowering companies or creditors with matured claims to demand early payment of unpaid subscribed capital “when a company fails to discharge matured debts”.
In practice, defining a company’s inability to pay matured debts has become the central point of contention between creditors and shareholder defendants.
Drawing on practical casework and precedent, this article examines the assessment standards for debt payment failures and legal remedies available to creditors.
Non-payment v payment inability
Partner
Zhong Lun Law Firm
Two interpretations exist in practice for determining whether a company…