Should Shareholders Be Responsible for Illegal Registered Capital Decrease without Notice to Creditors?

(By Bai Lituan) Registered capital is important part of a company’s assets and a guarantee on civil liabilities owed to people outside the company. Inappropriate registered capital reduction will directly affect a company’s ability to pay its debts and pose a threat to creditors’ interests. Therefore, the creditor notification process is a legal arrangement for maintaining a balance between legal person’s and personal interests and one of the prerequisites for exempting a shareholder reducing their capital contribution from liabilities to the extent of the registered capital decrease.