Attorney Jin Bingyi's Comments

Currently, there is a large number of limited liability companies in China. A significant portion of these are "development zone companies" established through specialized "company registration agencies." Despite the existence of documents such as capital verification reports issued by accounting firms, it has become an open secret that the registered capital of these companies is temporarily borrowed by the "company registration agencies" and subsequently withdrawn, with false annual inspections conducted.

Currently, in economic litigation involving companies, it is often the case that the defendant company is an empty shell, making it difficult to enforce effective judgments. Although shareholders may be held liable in cases of insufficient capital contribution, the shareholders in such situations have often long since absconded.

After the judicial interpretation is promulgated, a large number of accounting firms will inevitably become co-defendants in economic litigation involving limited liability companies, causing a sudden increase in the risks faced by accounting firms. However, since the registered capital of accounting firms themselves is not substantial, it is imperative to promptly introduce a mandatory insurance system for accounting firms to prevent and share risks. This will ensure that even if relevant compensation lawsuits arise, interested parties can obtain compensation as soon as possible, and accounting firms will not be easily driven into bankruptcy by such lawsuits.