In China, if a court determines that a shareholder’s personal assets have been commingled with the company’s assets, the shareholder may be held personally liable for the company’s debts using their own personal assets. According to relevant precedents from China’s Supreme People’s Court, courts consider the following four factors when assessing whether such commingling exists:
Whether the shareholder used company assets or funds to repay personal debts or for the benefit of affiliated companies, without proper accounting records.
Whether there is commingling between the shareholder’s personal bank accounts and the company’s bank accounts.
Whether the shareholder’s personal income is indistinguishable from the company’s profits.
Whetherthe company assets have been registered under the shareholder’s personal name.
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