Dispute over Shareholder Abuse of Corporate Legal Personality by a Technology Company in Xiamen

Case Summary

Plaintiff Xiamen [Name] Electronic Components Co., Ltd. had a long-term supply relationship with Defendant Xiamen [Name] Technology Co., Ltd. The defendant owed the plaintiff a total of 220 ten thousand yuan in payment. Despite a final court judgment confirming this debt, the defendant remains unable to repay. During enforcement proceedings, the court found that the defendant company has registered capital of 1000 ten thousand yuan, with shareholder Zhang holding 100% as the sole shareholder and legal representative. While operating the company, Zhang transferred all company revenues and funds directly into his personal bank account for personal expenses, including purchasing property and vehicles. This resulted in a complete commingling of corporate and personal assets. The company lacks independent financial accounting and separate assets. Zhang abused the corporate veil to evade company debts. The plaintiff therefore filed a lawsuit requesting that shareholder Zhang bear joint and several liability for the unpaid 220 ten thousand yuan in goods payments owed by the company.

Key Dispute

1.Is the defendant company a one-person limited liability company?

2.Did shareholder Zhang abuse the corporate entity's independent status or commingle assets?

3.Does the plaintiff's claim that Zhang bear joint and several liability for the company's debt comply with legal provisions?

Case Strategy

1.Fixed effective court judgments, enforcement rulings, company business registration records, shareholder identification documents, company bank account statements, Zhang's personal bank account statements, company financial records, and communication records between both parties as core evidence.

2.Prove that the defendant company is a one-person limited liability company with shareholder Zhang holding 100% of its shares. Pursuant to the Company Law, if the sole shareholder of a one-person limited liability company fails to demonstrate that the company's assets are independent from their own personal assets, they shall bear joint and several liability for the company's debts.

3.Prove that during Zhang's operation of the company, he directly transferred the company's operating revenue and funds into his personal bank account for personal consumption, real estate purchases, vehicle purchases, etc. The company's assets and Zhang's personal assets were completely commingled; the company had no independent financial accounting or separate property. Zhang abused the independent legal status of the corporate entity to evade company debts.

4.The burden of proof lies with Zhang to demonstrate that he cannot provide evidence proving the company's assets are separate from his personal assets, thereby making him jointly and severally liable for the company's debts.

Processing Result

The court ruled that Defendant Zhang shall bear joint and several liability for the 220 ten thousand yuan in unpaid goods payment owed by Xiamen Certain Technology Co., Ltd. to the Plaintiff, as well as interest on overdue payments; Defendant shall also bear all litigation costs and preservation fees for this case.

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