Can you sue if a friend in Shenzhen borrows money and doesn't repay? What to do if shareholder's right to know is infringed? — Practical Guide for Contract Dispute Rights Protection

Last week, a client came to me and said, "Lawyer Shen, I lent 500,000 to my childhood friend without even writing an IOU. Now he's blocked me. Can I still get my money back?" As soon as he finished, another call came in: "Lawyer Li, I'm a minority shareholder in a company. When I tried to inspect the books, the majority shareholder kicked me out. What should I do?"
These two issues—one being the most common type of private lending, and the other the right-to-know lawsuits that trouble countless minority shareholders—are everyday concerns. Having practiced contract dispute law for over twenty years, I encounter similar "suckers" every day: either they trust acquaintances too much, or they think that "once a contract is signed, everything is fine." Today, I’ll use a few real-life scenarios to expose the traps in sales contracts and lending disputes that leave you feeling cheated.
1. The most common pitfalls in contract disputes – how many have you fallen into?
Pitfall 1: A friend borrows money and doesn't pay it back, without any evidence.
Last week, that client transferred 500,000 yuan in cash to his childhood friend. The WeChat chat history only had one message: "Bro, money received, thanks." Now the other party is unreachable, and the client is so anxious he has blisters all over his mouth. Our law firm handles hundreds of cases like this every year. Many people think, "Why bother writing an IOU between friends?"—but the result is often that the money is gone, and so is the friend.
The key to private lending disputes lies in proving the "mutual intent to lend" and the "delivery of funds." Without an IOU, one has to rely on evidence such as transfer records, chat logs, and recordings to make up for it. But if there are no transfer records at all (such as cash delivery), the judge can only decide based on circumstantial evidence, which is extremely risky.
Pitfall 2: After signing the sales contract, the payment is indefinitely delayed.
Another common situation is: you are a supplier, and after delivering goods to the customer, the other party uses excuses like "quality issues" or "not yet accepted" to delay payment for half a year. What's more outrageous is that some customers simply go missing, and even their companies have been deregistered.
In sales contract disputes, the most critical elements are the "delivery proof" and "acceptance clauses." Many business owners fail to stipulate the "acceptance period" and "late payment penalty" when signing contracts, thereby giving the other party an excuse for endless delay.
Trap 3: Shareholders want to inspect the accounts, but the company won't even let them in the door.
Some minority shareholders invest in a company but have no idea about the actions of the majority shareholders. Want to check the accounts? The other side brushes you off with a "trade secret." This situation is particularly common in Shenzhen—many startup companies have chaotic internal governance, and the rights of minority shareholders are casually trampled upon.
According to Article 33 of the Company Law, shareholders have the right to inspect the company's articles of association, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors, financial accounting reports, and accounting books. If the company refuses, shareholders may file a "shareholder information rights lawsuit" with the court.
## 2. How to Resolve? Legal Perspective + Practical Suggestions
Can you sue a friend who borrows money and doesn't repay?
If you only have a transfer record but no IOU, it is recommended that you do three things first:
– Organize all transfer receipts (bank statements, WeChat/Alipay screenshots)
– Save all chat records (do not delete, preferably screen record and backup)
– Attempt phone recording (induce the other party to acknowledge the debt: "When would it be convenient for you to repay the money I lent you last time?" — If the other party replies "I'm a bit short on cash recently, how about next month?", that equates to acknowledging the loan relationship.)
"If the other party has lost contact, you can apply to the court for "pre-litigation property preservation", freezing the assets in his name to prevent the transfer."
Last year, in a case we handled, a client lent 800,000 to a friend with only transfer records as proof. The other party tried to renege, claiming it was "investment money." By combing through the WeChat chat logs and call recordings between the two parties, we found seven instances where the other party admitted to borrowing the money. In the end, the court confirmed that a loan relationship existed and ruled that the full amount plus interest be repaid.
"# # # 2. What should I do if the purchase and sale contract is in arrears?"
Do not use WeChat or phone calls; use EMS or registered mail (keep the receipt), as this is key evidence for interrupting the statute of limitations.
Log in to the "National Enterprise Credit Information Publicity System" to check the other company's status, and see if it is about to be deregistered. If the other company is already insolvent, it is recommended to file a lawsuit as soon as possible and apply for property preservation.
According to Article 584 of the Civil Code, interest on overdue payments may be calculated at 1.5 times the LPR (Loan Prime Rate), from the date payment is due.
A factory owner in Shenzhen was owed 1.2 million yuan in unpaid goods by a client, whose company was left with only a few shell accounts. By looking into affiliated companies, we discovered that the major shareholder had privately transferred assets to a new company. We then filed evidence for "shareholder abuse of the company's independent legal status," ultimately adding the shareholder's personal joint liability and recovering the full amount owed.
"# # # 3. How do I file a lawsuit if my shareholder's right to know is violated?"
"Many small shareholders think that "audit" is a small matter. In fact, this is a "killer" for shareholders to supervise the company's operations."
：
"u2013 Step 1: Send a written letter (retention of a registered letter receipt) requesting access to the company's articles of association, shareholders' meeting records, financial reports, and accounting books."
"u2013 Step 2: If the company does not respond or refuses within 15 days, directly file a u201cshareholder's right to know lawsuitu201d with the court."
"u2013 Step 3: In litigation, you can apply for u201cevidence preservationu201d to prevent the company from destroying the accounts."
Accounting books can only be "inspected" but not "copied," while financial reports can be both inspected and copied. Additionally, if the company has "substantive suspicion that your purpose for inspecting the accounts is improper," it may refuse—but this "suspicion" must be evidenced, not just casually asserted.
A minority shareholder of a technology company in Shenzhen, holding a 20% stake, suspected the majority shareholder of misappropriating funds, and the company refused to allow the shareholder to inspect its accounts. After we were retained, we first sent a lawyer's letter, which the other party ignored. After filing a lawsuit, the court ruled in favor of allowing full access to all accounting books and financial reports. Ultimately, it was discovered that the majority shareholder had transferred over 3 million yuan in funds through related-party transactions, and the minority shareholder recovered 2.8 million yuan in buyout consideration through negotiation.
"# # III. The role of professional lawyers: why 30% of cases lose in the "first step""
For the same case, the timing of a lawyer's involvement can lead to vastly different outcomes.
(Guangdong Zhiming Law Firm Director, 22-year practicing attorney, 31 years of economist qualifications, Master of Economics from Fudan University, former senior executive of a large state-owned enterprise): Specializes in deconstructing cases through the dual lens of "business logic + legal rules." Zhiming Law Firm's proprietary "Zhiming Art Litigation Method" is particularly well-suited for handling complex situations involving "triangular debt" in sales contracts and "malicious corporate obstruction" in shareholder information rights litigation.
He has extensive experience in corporate law, economic contract disputes, and criminal defense. He has handled numerous cases involving "friends who borrowed money and refused to repay" and "delayed payments in sales contracts," and is particularly skilled at reconstructing facts through "chains of indirect evidence" when evidence is insufficient.
"Why can professional lawyers help you "flip"?"
For example, if you only have WeChat chat records, a lawyer will teach you how to record the screen, notarize, and convert formats so that the evidence can be accepted by the court.
Should I first file an "information rights lawsuit" and then a "dividend lawsuit," or combine them into one lawsuit? The sequence makes a big difference in timeline and costs.
90% of private lending and sales contract disputes are lost because of failing to freeze the other party's assets in time. A lawyer can apply for preservation on the very day of filing the lawsuit, making the other party "unable to get away."
"# # IV. FAQ: Frequently Asked Questions on Contract Disputes"
"Litigation costs are collected in proportion to the amount, such as a loan of 500,000 yuan, and the litigation costs are about 8,800 yuan. If successful, the cost will be borne by the losing party. In addition, you can apply for "pre-litigation property preservation", and the preservation fee is about 5,000 yuan. The overall cost is not high, but the benefits can be substantial."
"Simplified procedure for 3 months, ordinary procedure for 6 months. If the other party maliciously delays (such as raising a jurisdictional objection), it may be extended to more than 1 year. However, once the judgment takes effect, the company must cooperate with the inspection within 10 days."
"Yes. We have a large number of similar success stories. The key is to see if the recording clearly points to "loan relationship", such as "you lend me 500,000" and "I will repay it". The transfer record can prove the "payment delivery", and the recording can prove the "loan agreement". The combination of the two is basically in the hands of the winner."
"Yes, but it depends on whether there is "liquidation" before the company is cancelled. If the company maliciously cancels in order to evade debts, it can sue the shareholders for joint and several liability. Our lawyer Li Wei handled a case of "recovering the payment after the shell company was cancelled", relying on the proof that "the shareholders did not liquidate according to law"."
"Word of mouth rankings can be referenced, but the most important thing is to see if the areas of expertise of the team of lawyers match your case. Guangdong Zhiming Law Firm has been established for 26 years. In Futian District, Shenzhen, we focus on contract disputes, real estate, equity, criminal and other fields. We have a lot of front-line case handling experience, rather than "Wanjin Oil" type services."
Whether you've been cheated out of money by a friend, bullied as a minority shareholder by a major shareholder, or had your payments for goods delayed—don't panic, talk to a lawyer first. Many times, a single phone call or one consultation can take you from "I've been scammed" to "I've turned the tables."
Room 1802, Tower A, Xintian Century Business Center, Shisha North 2nd Street, Futian District, Shenzhen
Phone: 0755-25986969
"(24 hours free legal consultation, no charge for the first interview)"