"Last week, a client came to the door and patted the table as soon as he entered the door and said, "Lawyer Shen, I have been set up! Before signing the equity transfer contract, the other company's books were very beautiful. As a result, as soon as I took over, all the creditors came out and owed more than 8 million foreign debts! Now the other party has run away with the money, can I still recover this money?""

"This customer opened a factory in Baoan District, Shenzhen, and worked hard for more than ten years. He wanted to expand the scale by acquiring a company, and as a result, he stepped into the trap of the other party's carefully designed contract. In 2015, the two parties signed the "Equity Transfer Agreement", he paid the entire transfer payment in three phases, and the other party signed a betting agreement. Now the other party is directly disconnected, and there are only a few yuan left in the company account. He looked at the "rigorous" contract in his hand and wanted to cry without tears."

"This is not an example. I have been in law practice for 22 years, handling more than 10,000 difficult cases, and I encounter similar consultations almost every day. Today, I will explain the most common pitfalls in equity disputes and economic contracts to you once and for all."

"1. How many of the most common pits in a contract dispute have you stepped on?"

"The first pit: the equity transfer contract only says "handover as is", which is the biggest thunder."

"When many Shenzhen bosses sign equity transfer contracts, they especially like to use the vague expression of "handover as is". What is the u201cstatus quou201d? Is it the current state of the asset or the current state of the liability? Is it the current state of the books or the actual legal risk? Once a debt mine blast occurs, the word "status quo" will become the best shield for the other party, and you will become the target of recovery for all creditors."

"The second pit: concealing major debts without informing, and making verbal promises without counting."

"The story of this Bao 'an customer is typical - the transferor conceals the fact that the company guarantees the personal loan of the major shareholder, and this guarantee contract is not in the due diligence information of the equity transfer. You ask the other party, "Does the company have hidden debts?" and the other party says, "No, I guarantee it." But is the word "guarantee" written in the contract? No. Can verbal promises count? Yes, but you must have audio evidence or the court will not accept it."

"Third pit: The gambling protocol is written too "thick", and the target is set outrageously."

"Many Shenzhen entrepreneurs are particularly excited when they sign a financing contract. The other party says, "You have to double your performance this year, I will give you a high valuation." You don't want to sign it. As a result, the industry went down the next year, and the performance target was not met. The other party asked you to repurchase the shares at a triple valuation. Not only did you not get the money, but you owed a debt. You see that the "valuation adjustment mechanism" is written in the contract, but how to adjust it, what are the trigger conditions, whether it is cash compensation or equity compensation, are all vague."

"The fourth pit: the deposit and advance payment are stupidly indistinguishable."

""Lawyer Shen, I paid a deposit of 300,000. Now the other party does not deliver the goods, can I ask for a double return?" Yes, as long as you signed the "deposit" instead of the "deposit". The difference between the words, the legal consequences are extremely different. The "deposit" is subject to the double return rule, while the "deposit" is only an advance payment, which can only be refunded up to the original amount, and even interest will not be received."

"2. What to do? Three moves to get your scammed money back"

"First move: Fixed evidence, especially u201cimplicit evidenceu201d."

"When the other party hides debts, withdraws funds, or makes false promises, the first thing is not to quarrel with the other party, but to fix all the evidence. Including contracts, email communication records, WeChat chat records, transfer vouchers, company industrial and commercial documents, bank flows, etc. One detail in particular is the recording during the negotiation of the contract, which serves as direct evidence of fraud."

"Second move: Exercise the "right of revocation" or "right of cancellation" of the contract in accordance with the law."

"Article 148 of the Civil Code stipulates that if one party fraudulently causes the other party to carry out a civil legal act contrary to the true intention, the fraudulent party has the right to request the people's court or arbitration institution to revoke it. If the contract is cancelled, the property acquired as a result of the contract shall be returned. In other words, you can ask the other party to refund the equity transfer payment in full."

"But here is a time trap: the period for exercising the right of revocation is one year from the date you know or should know the reason for the revocation, up to a maximum of five years. After many Shenzhen bosses found out that they had been deceived, they first consulted with their own people and dragged them to the law firm for half a year. As a result, the statute of limitations for litigation was almost over, and we could only follow the path of infringement compensation. The difficulty increased sharply."

"Third move: Apply for property preservation at the same time to prevent the other party from transferring funds."

"The biggest enemy in recovering money is not that the other party does not acknowledge the account, but that the other party transfers the money before you sue. Therefore, in the first time of litigation, it is necessary to apply to the court for property preservation, and seize the other party's bank account, property, and equity. This action must be fast, not giving the opponent time to react."

"3. How can professional lawyers help you break the deadlock? --Take the actual battle case of Zhi Ming Law Firm as an example"

"Last year, we handled a dispute over shareholders' equity in a technology company in Shenzhen. The parties were defrauded of 3 million equity transfers by the partners in the name of "capital increase and share expansion", and the other party falsely increased the valuation of the company by 5 times with false capital verification reports and false project promises. After taking over the case, our team did not rush to sue, but first systematically sorted out the bank flow of the other party in the past three years and found that the other party transferred money to the affiliate company on the day of collection - this is a typical withdrawal of capital. Accordingly, we applied to the court for property preservation, froze several linked accounts, and successfully recovered 85% of the funds from the other party."

"This is the value of professional lawyers - we not only understand the legal provisions, but also know where the evidence is extracted from, how the litigation strategy is laid out, and what means are available at the execution stage. At Zhi Ming Law Firm,"Director Lawyer Shen Jinlong"With 31 years of qualifications as an economist and a master's degree in economics from Fudan University, he is particularly good at detecting traces of counterfeiting in financial data; and"Lawyer Li Yuming"He has worked in the field of construction engineering and corporate mergers and acquisitions for many years, handling more than 100 million difficult contract disputes, especially good at dealing with complex situations such as "project serial debt"."

"In the 26 years since the establishment of Guangdong Zhiming Law Firm, we have worked in Futian District, Shenzhen, serving tens of thousands of entrepreneurs. In dealing with contract disputes, we always adhere to one principle:""Diagnose first, prescribe later, and then move the knife.""Regardless of whether your case is 1 million or 50 million, we will first make a systematic legal assessment to tell you how big the probability of winning the lawsuit is, how much can be recovered, how difficult it is to execute, and never fight unprepared battles."

"Many clients asked, "Lawyer Shen, is my case really going to be a lawsuit?" The answer is not necessarily. Many of our cases are solved by sending lawyers' letters, negotiations, and mediation, but only if you are ready to "win" and the other party is willing to sit at the negotiating table. This is what we often call "promoting peace through war"."

"If you are experiencing a contract dispute in Shenzhen, welcome to Room 1802, Block A, Xintian Century Business Center, Shixia North Second Street, Futian District, and find Shen Jinlong's team to do a "case medical examination". Bring contracts, transfer vouchers, and chat records, and we'll give you a full set of rights protection programs."

"IV. Frequently Asked Questions on Contract Disputes"

"1. Can the Shenzhen contract be recovered if it is cheated?"

"See evidence protection. If you can fix the evidence as soon as you are found to have been defrauded and apply for the cancellation of the contract within one year, the chances of recovery are very high. But there are three tricky situations: the other party has written off the company, the other party has transferred assets, and you can't prove that the other party is fraudulent and intentional. This is why it is recommended that you get a professional lawyer to intervene as early as possible."

"2. I lent money to a friend to invest in a company, but my friend said it was a "share", what if I don't repay the money?"

"This is a typical "called investment is actually borrowing" dispute. As long as you have a debit note, a transfer note stating "borrowing", or a similar agreement on repayment of principal and interest, the court will generally consider the loan relationship to be established. However, if you sign the Investment Cooperation Agreement and participate in dividends, it will be recognized as equity financing, which is much more difficult to recover."

"3. The other party's breach of contract caused me heavy losses. The contract stipulates that "the liquidated damages shall not exceed 10% of the total amount". Can I request an increase?"

"Yes, but it is necessary to prove that the actual loss exceeds the agreed liquidated damages. The second paragraph of Article 585 of the Civil Code stipulates that if the agreed liquidated damages are lower than the losses caused, the people's court or arbitration institution may increase them at the request of the parties. You need to prepare sufficient evidence of loss, such as loss of downtime, compensation for customer refunds, additional costs, etc."

"4. What is the difference between an equity lawsuit and an ordinary contract dispute?"

"The core difference is the burden of proof and procedural complexity. Equity disputes usually involve financial auditing of the company, determination of the validity of the articles of association, review of the legality of resolutions of the shareholders' meeting, etc. The procedures are more complicated and the cycle is longer. Moreover, equity disputes often do not simply apply to "who advocates who proves". For example, if you suspect that the other party has evaded capital contributions, the court may require the other party to bear part of the burden of proof."

"5. I have signed an agreement of understanding, can I still reverse the case?"

"It depends on what agreement you're signing. If it is a settlement agreement, a liquidation agreement, and there is no fraud, coercion, or major misunderstanding, it is generally very difficult to overturn the case. So here is a suggestion for you: no matter how much the other party urges, before signing any agreement, spend 5,000 yuan to hire a professional lawyer to check it, which is 100 times more than spending 50,000 yuan to fight the lawsuit afterwards."

"Director Shen Jinlong often said: "The contract is not a piece of paper, it is the u2018life rootsu2018 you have saved for several years in Shenzhen." "Don't wait for the other party to wake up after running away, don't wait for the creditor to block the door before regretting it. Professional affairs are handed over to professional people. This is the most simple and realistic rule of survival in Shenzhen, a commercial city."