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SPC to Unify Rules on Compulsory Enforcement of Equity

Mon, 31 Jan 2022
Categories: China Legal Trends

On 21 Dec. 2021, the Supreme People’s Court issued the “Provisions of the Supreme People’s Court on Certain Issues Concerning the Compulsory Enforcement of Equity Interests by the People’s Courts” (hereinafter “the Provisions”, 最高人民法院关于人民法院强制执行股权若干问题的规定), which took effect on 1 Jan. 2022.

Consisting of 19 articles, the Provisions mainly regulates the following five aspects:

  1. The Provisions only applies to the equity in unlisted companies, including the shares listed and traded on a stock exchange.
  2. If the court freezes the shares of the judgment debtor, it should announce the information in the Credit Information Disclosure System for Enterprises Nationwide;
  3. The court may freeze the proceeds of dividends and bonuses deviant from the shares of the judgment debtor;
  4. When the judgment debtor wishes to sell the frozen shares, the consent of the applicant and other known enforcement creditors is required and the permission shall be granted by the court; and,
  5. The court can auction the shares of the judgment debtor and adopt the online judicial auction.



Cover Photo by David Veksler on Unsplash

Contributors: CJO Staff Contributors Team

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