2017.01.10
Jenny Chen
The Ministry of Justice issued the Fa-Lu-10503514810 Circular of January 10, 2017 to communicate that when the only shareholder (director) of a limited company is deceased, the requirements for inheritance under the Civil Code shall be followed first, and this may not necessarily constitute ground for the company’s dissolution.
According to this circular, for a limited company who does not have the minimum number of shareholders required by law, unless a new shareholder joins to continue with the operation, dissolution registration of the company shall be conducted pursuant to Article 113 of the Company Law, to which Article 71 of the same law applies mutatis mutandis. However, if such number requirement is not met due to the death of any shareholder, the requirements for inheritance under the Civil Code shall be followed first. Therefore, when the only shareholder (director) of a limited company is deceased, the requirements for inheritance under the Civil Code shall be followed first, and this may not necessarily constitute ground for the statutory dissolution of the company (compare Article 113 of the Company Law, to which Article 71, Paragraph 1, Subparagraph 4 of the same law applies mutatis mutandis). Conversely, the ground for the company’s dissolution is constituted only when it is confirmed that the only shareholder has no inheritor or when all inheritors have relinquished the inheritance, because there is no inheritor to inherit the shareholder’s capital contribution to the company, resulting in the company’s shareholder change and the failure to meet the above requirement under the Company Law that a limited company shall have at least one shareholder.