The Supreme People’s Court Several Issues Concerning the Application of the PRC Company Law Provisions (3), which came into effect on 16 February, set forth detailed rules on the application of the law to such issues as the establishment of companies, capital contributions and the confirmation of shareholdings.
Pre-existing liabilities
The Provisions provide the following with respect to how liabilities under contracts entered into with third parties, harm caused to third parties and other liabilities and expenses incurred during the establishment of a company are to be borne.
Where the company has been established
- If a subscriber entered into a contract in his own name, he, in principle, will bear the contractual liabilities himself, unless the company acknowledges the contract after its establishment, or has already actually enjoyed rights or performed obligations under the contract, in which case the contract counterparty may demand that the company bear the liabilities.
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Business Law Digest is compiled with the assistance of Haiwen & Partners. The authors can be emailed at baochen@haiwen-law.com. Readers should not act on this information without seeking professional legal advice.
