Lack of creditor remedies outside insolvency: identification gaps for defaulted capital contributions under the subscription system

While market vitality has been boosted with the 2014 implementation of the reform creating the subscription-based capital registration system in China's corporate capital regime, new issues about the insufficient protection of creditors' rights and interests have surfaced. Outside formal insolvency proceedings, creditors often encounter difficulties in holding shareholders liable for failure to perform capital contribution obligations under traditional legal mechanisms, resulting in a legal vacuum for remedies. This study, grounded in the current legal framework, systematically examines the substantive impact of the subscription system on the determination of shareholders' capital contribution liabilities and analyzes the institutional roots of creditors' enforcement dilemmas. Through quantitative analysis of relevant judicial cases over the past eight years, this research reveals that in non-bankruptcy proceedings, creditors prevailed in only 28.7% of cases where they sought to enforce shareholders' capital contribution liabilities. Moreover, successful claims were predominantly concentrated in specific circumstances, such as cases involving shareholders' manifest bad faith or instances where the company had already exhibited material insolvency. This empirical data indicates that the current legal regimes regulation of shareholders' capital contribution obligations remains primarily anchored in liquidation proceedings, failing to effectively address the practical demands for creditor protection under the subscription-based capital system.