[Legal Index] Articles 1 and 2 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Compulsory Enforcement of Equity by the People’s Courts.

When a court freezes equity interests, it shall serve the company registration authority and other assisting agencies with a notice of assistance in enforcement and a ruling, requiring them to suspend procedures such as registration of changes to or pledges of the frozen equity. At the same time, the court shall also serve the company where the judgment debtor is employed with a notice of assistance in enforcement, informing it that it may not, on its own initiative, process any transfer of equity interests or distributions… Matters such as red. Following the freezing of equity interests, the party subject to enforcement may not, without authorization, transfer, pledge, or otherwise dispose of such equity.

Yes. When the equity of a limited liability company is put up for auction, other shareholders shall enjoy a right of first refusal under identical terms and conditions. The court shall clearly specify in the auction notice the time limit and procedures for exercising this right of first refusal. If other shareholders intend to acquire the shares, they must file an application with the court and deposit a security within the prescribed period, and participate in the bidding in accordance with the auction procedures.

There are significant differences in the methods of enforcement between listed company shares and non-listed company equity:

Listed company stocks: Typically, such assets are sold or auctioned through stock exchanges, offering strong liquidity and high execution efficiency.

Equity of non-listed companies: The process involves appraisal, auction, and other procedures, resulting in a lengthy disposal timeline and being subject to factors such as the company’s operating condition and the preemptive rights of other shareholders.

The court will, taking into account factors such as the type of equity and its market liquidity, select the enforcement method that best serves to realize the value of the creditor’s claim.

With respect to equity interests in non‑listed companies, courts typically commission qualified appraisal institutions to conduct a valuation in order to determine the reserve price for auction. However, if any of the following circumstances apply, an appraisal may be waived:

The equity value is significantly lower, and the valuation fees may exceed the equity value.

The parties have mutually agreed not to conduct an appraisal.

Other circumstances where assessment may be waived as provided by law.

Following the issuance of the appraisal report, the court shall, in accordance with the law, determine the reserve price and conduct an online judicial auction.

Equity enforcement involves multiple factors, including corporate governance structures, shareholders’ rights, and market value, and is characterized by complex procedures and a high degree of technical expertise. The party subject to enforcement should proactively cooperate with the court’s execution proceedings and diligently fulfill its obligations; third parties who dispute the ownership of equity interests should promptly assert their rights through legal channels. In carrying out enforcement, the courts consistently adhere to the principles of legality, standardization, and transparency, ensuring equal protection of the legitimate rights and interests of all parties involved.