1. Case Introduction By Amma Questions to Cici.87@163.com 2010-09-28

2. Self-introduction 200520092012 I am from Hebei Province in the middle of China, near Beijing I spend 4 years in ECUPL major in civil and commercial law during my undergraduate. I am now enjoying 3 years period here for my master degree major in commercial law. Who knows? Life is a box of chocolates, you never know what you gonna get and who you gonna be.

3. CONTENTS 1 Simple Case Introduction 2 Q&A 3 Discussion 4 Conclusion

4. Case about founding a company Serena Blair Chuck S, B and C would like to found a fashion designing company, which registered capital is 1 million USD. C paid 500,000 USD as his contribution, B contribute her mother’s fashion clothes evaluated at 300,000 USD, while S would rather paid no money but her labor as a model for the company for 5ys whose payment should be 200,000USD as her contribution. Then, B signed a commercial contract with N in the company’s name, but fail to honor the obligation which cause N a huge loss of 2 million. Nate One year later, the price of B’s clothes fell to 100,000 USD for out of trends.

5. Q & A Will the registration authority permit their kinds of contribution? Can this company be successfully founded? Should the company pay all of N’s debt when it faces bankruptcy? After the clothes price went down sharply, should B make up the contribution she subscribed? Can N directly find C to compensate his loss? How much will each shareholder loss?

6. Discussion Can company founded smoothly with all kinds of contributions? Should the shareholders protected by limited liabilities? Supporting Objections Should shareholder be responsible for their contribution’s market price fluctuation? Should the creditor file a claim directly to the shareholder?

7. Chinese Company Law Provisions Involved Article 27 A shareholder may make capital contributions in currency, in kind or intellectual property right, land use right or other non-monetary properties that may be assessed on the basis of currency and may be transferred according to law, excluding the properties that shall not be treated as capital contributions according to any law or administrative regulation. The value of the non- monetary properties as capital contributions shall be assessed and verified, which shall not be over- valued or under-valued. If any law or administrative regulation prescribes the value assessment, such law or administrative regulation shall be followed.

8. Chinese Company Law Provisions Involved Article 31 After the establishment of a limited liability company, if the actual value of the capital contributions in non- monetary properties is found to be apparently lower than that provided for in the articles of association of the company, the balance shall be supplemented by the shareholder who has offered them, and the other shareholders of the company who have established the company shall bear joint liabilities. The value of the non- monetary properties as capital contributions shall be assessed and verified, which shall not be over- valued or under-valued. If any law or administrative regulation prescribes the value assessment, such law or administrative regulation shall be followed.

9. Chinese Company Law Provisions Involved Article 27 A shareholder may make capital contributions in currency, in kind or intellectual property right, land use right or other non- monetary properties that may be assessed on the basis of currency and may be transferred according to law, excluding the properties that shall not be treated as capital contributions according to any law or administrative regulation. Regulations of the PRC Governing the Registration of Companies Article 14 Shareholders shall not use labor, credit, natural person’s name, commercial goodwill, franchise or encumbrances accessed on basis of currency as their contribution.

10. Chinese Company Law Provisions Involved Article 3 A company is an enterprise juridical person, which has independent juridical person property and enjoys the property right of the juridical person. And it shall bear the liabilities for its debts with all its property. As for a limited liability company, the shareholders shall be responsible for the company to the extent of the capital contributions they have paid. As for a joint stock limited company, the shareholders shall be responsible for the company to the extent of the shares they have subscribed to.

11. Conclusions and Suggestions Law originate from life, but above life. Figure out the parties and their legal nexus involved in cases Cultivate the way of law thinking Grasp the basic idea of legal principals Choose the law applied and familiar with the legal provisions