A partner turns against you and wants to force you out? Shareholder equity diluted in Shenzhen? A lawyer teaches you three moves to keep control.

Last week, a cross-border e-commerce business owner came to us. He's based in Longhua, and his company's annual revenue had reached over 30 million yuan. However, his two partners teamed up to pull a scheme on him—first they increased the capital and expanded the shares, then they amended the company's articles of association. By the time he realized what was happening, his stake had dropped from 51% to 22%, and he had even lost his veto power. He slammed the table and asked: "This money was invested by me, and the business was brought in by me. How can they kick me out without putting in a single cent?"
This kind of scenario plays out several times a month at Zhiming Law Firm's office in Futian, Shenzhen. Equity disputes have surged in recent years, with Shenzhen seeing an average annual growth rate of around 20%, and over half of these cases involve shareholder infighting and control battles. Put simply, when a company is making money, everyone is willing to negotiate, but once cracks appear in profit distribution, the articles of association and agreements become the only "voice of authority."
Yes, but it depends on the procedure. Under Article 34 of the Company Law, a capital increase and share expansion must be approved by shareholders representing more than two-thirds of the voting rights. If the other party bypasses you or forges your signature, the shareholders' resolution would be defective, and you can file a lawsuit with the court to request confirmation that the resolution is invalid or to have it revoked.
But here's the catch: if, after learning about this, you neither objected in writing nor continued participating in the company's operations—and even took dividends—the court may consider that you've tacitly accepted it. We previously handled a case involving a tech company in Nanshan, where the original shareholder's stake was diluted from 40% to 8%. Fortunately, he had one crucial piece of evidence—the signature on the capital increase agreement wasn't his own. Once the handwriting analysis came out, the other side immediately backed down, and ultimately the mediation restored his shareholding ratio. So it's not hopeless; the key lies in evidence and timing.
First, exercise your right to information. This is a statutory right granted to every shareholder under Article 33 of the Company Law. Reviewing accounts, board resolutions, and accounting books is entirely legitimate. You don't need to explain why you want to see them—just send a written request. If the company doesn't provide them within 15 days, you can file a lawsuit.
But what you need to investigate is not just the transaction flow, but related-party transactions—for example, the company renting a property from the major shareholder's wife at an inflated price, or selling a batch of goods at a low price to another company owned by the shareholder himself. Cases like these have been ruled on quite a few times in both the Shenzhen Futian Court and Nanshan Court. As long as the facts are verified, the court can directly order the return of the funds. In a case we handled last year, the subject amount was 1.7 million yuan, uncovered from a "consulting service fee," and the full amount was ultimately recovered.
To determine whether the resolution to amend the articles of association has followed the necessary procedures. Amending the articles also requires a two-thirds majority of voting rights, but if your veto power is written into the articles as a "special clause," such as stipulating that "the following matters require the unanimous consent of all shareholders," then amending it would require your personal signature to be valid.
We have a case from 2023 where the other party had a shareholders' resolution notarized at the Nanshan Notary Office in Shenzhen, but our client never actually attended. We obtained the video recording of the notarization and found that the person who signed was a stand-in. The court ultimately did not accept this resolution. So, while this kind of practice is not uncommon, it's far from being foolproof. As long as one step in the procedure is unlawful, the entire resolution can be overturned.
Yes, negotiation and settlement are actually more common than going to court. In Shenzhen's equity dispute cases, fewer than 30% actually reach a judgment; most are resolved through negotiation during the litigation process. Both parties are well aware that the company is still operating, and a complete fallout benefits no one.
Our director, lawyer Shen Jinlong, has been handling cases of this kind for 26 years. His approach has always been: first, help clients get their cards on the table—what your equity is worth, what weaknesses the other side has, how long the litigation might take, and what the worst-case outcome looks like—then decide whether to fight or settle. This strategy yields a high success rate and keeps costs low. If you're going through a similar predicament, it's advisable to first consult a lawyer to sort out what cards you hold, rather than waiting until the other side has drained the company before thinking about protecting your rights. If needed, you can drop by Room 1802, Building A, Xintian Century Business Center, Shixia North Second Street, Futian District, or call 0755-25986969.
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(This article is for legal reference only. Individual cases may vary; please consult a professional lawyer for specific matters. Guangdong Zhiming Law Firm, a 26-year-established law firm in Shenzhen, Tel: 0755-25986969, Address: Room 1802, Tower A, Xintian Century Business Center, Shixia North Second Street, Futian District, Shenzhen)