Debts settled, the machinery and equipment remain — both shareholders want the same most expensive machine. Splitting cash is easy; splitting "things" is hard: you can’t halve a machine. How does the law divide when shareholders fight over specific assets?
1. The principle: pro-rata division after all debts paid
Art. 208(6) of the 2020 Enterprise Law: after dissolution costs and debts are paid (in Art. 208(5) order: employees → taxes → other debts), the remainder goes to shareholders pro rata to shareholdings. This is a value principle, not "grab what you like": each shareholder gets value matching their ratio; the form (cash or in-kind) is by agreement. Nobody may "hug" the priciest machine beyond their share — unless paying the difference to the other side.
2. Three ways to split in-kind assets amid disputes
Method 1 — Agreed allocation: list assets with values (independent valuation if needed), parties pick/draw lots, whoever takes higher-value assets pays the difference. Method 2 — Sell then split cash: where no agreement on who gets what, auction everything (or each asset) and split proceeds pro rata — fairest, and any shareholder wanting a machine bids like an outsider. Method 3 — One side buys out: independent valuation, one side takes all assets and pays the other pro rata. In practice method 2 draws fewest disputes — the market sets prices, no favouritism possible.
3. "Weapons" against obstruction
A side withholding assets or secretly selling machines after the dissolution decision: these are banned acts — post-decision, the enterprise may not transfer assets (save per the liquidation plan). Breaching managers/shareholders bear joint liability for debts and must return the assets. The harmed side: seek interim injunctions (seizure, transfer bans); sue for asset recovery and damages. And recall Art. 207(2): pending court disputes block completion of dissolution — the obstructer only prolongs the process, adding liquidation costs to themselves.
4. Prevention: pre-agreed division terms
Shareholders’ agreements should carry dissolution asset-division clauses: valuation method (which valuer, what timing), asset-picking priority (lots, internal auction), cash-compensation mechanics. For plants: specialised machinery depreciates fast once idle — the longer the fight, the more value evaporates, hurting both. Speed is money.
This article has been quality-reviewed by the FLAW AI Legal Council
Frequently Asked Questions
Can the machine-contributing shareholder reclaim that exact machine?
Not automatically — contributed assets belong to the company; on dissolution division follows pro-rata value, unless otherwise agreed.
Who decides asset values?
Parties agree; failing that, hire independent valuers or auction and let the market decide.
What about bank-mortgaged assets?
Secured debts are paid from the mortgaged assets first; any remainder enters division — banks are paid before shareholders.
A shareholder "disappears" unreachable?
Their portion is escrowed as provided; dissolution proceeds with remaining shareholders per statutory procedure.