Chuangwen was ordered to pay Fuyi RMB 5.5 million for engineering works. Fuyi enforced but recovered nothing, and Chuangwen’s business licence was revoked. Fuyi obtained an investigation order showing that Chuangwen’s RMB 10 million registered capital had been transferred out one week after verification, and sued the shareholders for RMB 6 million with interest on the basis of capital withdrawal.

Issue

Whether the movement of funds after capital verification established withdrawal by the shareholders, and whether each shareholder was jointly liable for the company’s debt.

Outcome

The firm acted for Ms Gu, one of the three founding shareholders, whose property and vehicle had been frozen. Eight sets of documentary evidence were filed. The court accepted the defendant’s submissions and dismissed the claim against the shareholders.