Understanding the magic rings: lawsuits over corporate seals

By Li Tao, Dacheng Law Offices
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Lawsuits for the return of seals are disputes over keeping and ownership of the seals among particular parties like shareholders, directors, supervisors, officers or the company, which arise from holding and using the seals in relation to corporate management and operations. Such disputes occur in many cases, and the legal basis has not been well clarified.

Before 2005, the courts took distinct positions to deal with such cases; some rejected the case for the reason of not being justifiable, while some ruled on them as disputes over shareholders’ interests or infringement on property.

Court opinion

Article 85 of the guiding opinion of the higher people’s court in Shandong province in 2005 stipulates: if shareholders, directors, managers or other people wrongfully possess the seals while the company sues for their return, and for damages, the people’s court shall support it.

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Li Tao is a senior partner at Dacheng Law Offices

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