On Protection of Shareholders' Term Interest: Based on Article 6 of the Summary of Civil and Commercial Judicial Work of National Courts

The Supreme People's court stipulates that shareholders are vested term interest for the undue capital contribution.This article points out that, after the reform of the full subscription, the signal function and guarantee function of registered capital have become void and creditors no longer appraise the company's solvency in accordance with the registered capital.In addition, protection mechanisms for creditors, such as guarantee, are widely used, and the smoothness of bankruptcy proceedings is constantly improving.Thus, non-accelerated-expiration are able to protect the term interests of shareholders, and, at the same time, do not excessively damage the interests of creditors.The interpretative course adopted by Supreme People's court could be summarized as the Theory of Legal Guidance.Since the company law clearly authorizes the duration of capital contribution to be agreed by the shareholders and the parties themselves, the creditors have the obligation to review the provisions concerning the duration of capital contribution in the articles of associations and shall not infringe the shareholders' term interest.