Dispute over capital increase and share expansion among shareholders of a catering company in Fujian

Case Summary

Plaintiffs Chen and Lin, shareholders of Fujian-based catering management company [Company Name], hold 40% and 30% equity stakes respectively. Defendant Wang, who holds 30%, is the company's controlling shareholder and legal representative. In 2024 year, 5 month, without notifying plaintiffs Chen and Lin, Wang unilaterally convened a shareholders' meeting that approved a resolution to increase the company's registered capital from 1000 million yuan to 2000 million yuan. The additional 1000 million yuan in registered capital was fully subscribed by Wang alone; plaintiffs Chen and Lin received no subscription rights, were not notified to attend the shareholders' meeting, and were denied the opportunity to vote on the capital increase. Upon learning of this, plaintiffs argued that the resolution violated their statutory pre-emptive subscription rights as shareholders, contravening both the Company Law and the company's articles of association. They filed suit requesting the court to declare the shareholders' meeting resolution on capital increase null and void.

Key Dispute

1.Do the convening procedures and voting methods for this shareholders' meeting resolution on capital increase and share expansion comply with legal requirements?

2.Does the plaintiff, as a shareholder of the company, have the right of first refusal to subscribe to additional registered capital?

3.Is this resolution on capital increase and share expansion legal and valid?

Case Strategy

1.Secure core evidence including the company's business registration details, shareholder equity ratios, articles of association, notices of shareholders' meetings, resolutions on capital increase and expansion, and communication records between both parties.

2.Prove that the Company Law and the company's articles of association explicitly stipulate that when a company increases its registered capital, shareholders have the right to subscribe to the additional capital in proportion to their paid-in contributions. Only if other shareholders waive this preemptive right may persons outside the company subscribe to the additional capital.

3.Prove that Defendant Wang failed to notify Plaintiffs Chen and Lin at least 15 days in advance before convening the shareholders' meeting, did not inform them of the capital increase and share expansion, and thereby infringed upon their preemptive subscription rights. The convening procedure and voting method of the shareholders' meeting seriously violated applicable laws and the company's articles of association.

4.The evidence demonstrates that the resolution on this capital increase and share expansion stipulated that the entire amount of the newly added registered capital was subscribed by Wang alone. This completely deprived the plaintiff of their preemptive subscription rights, infringed upon the plaintiff's legitimate shareholder rights, and violated mandatory legal provisions; therefore, the resolution is invalid.

Processing Result

The court ruled that the resolution on capital increase and share expansion made at the shareholders' meeting held by Defendant Fujian [Company Name] Catering Management Co., Ltd. in 2024 year, 5 month is invalid; the defendant shall bear all litigation costs of this case.

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