Solutions to disputes on the return of companies’ certificates

Achange of shareholding structure in a company could lead to alterations in the ownership of the company, its executives, legal representative and governance structure. It is commonplace that former directors or legal representatives refuse to return their companies’ certificates.

Q: How do you solve disputes over the handover of a company’s certificates?

A: The most effective way to retrieve the certificates is to negotiate a voluntary handover with current holders.

If the negotiations come to naught, it would be necessary to reapply for the certificates: issue a statement to declare the lost certificates invalid; bring the shareholder resolution on the change of legal representative and the application signed by the new legal representative to industry and commerce administration departments to apply for a new business licence; and then apply for the company’s official seal and other certificates. Since the invalid certificates are vulnerable to malicious use, it is necessary to retrieve them.

If there are disputes over equity investments, former shareholders or legal representatives, this may obstruct the application for new certificates.

For instance, they could raise objections to the shareholder resolution on the appointment of a new legal representative, and request a people’s court or an arbitral institution to revoke the resolution, according to article 22 of
the Company Law.

It will be difficult to apply for new certificates as the validity of the resolution is in doubt. Therefore, it is necessary to ask for the handover of certificates by current holders through lawsuit or arbitration.

Zhang Jianzhou is a partner at AnJie Law Firm