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China legal tool Corporate & startup National framework

Shareholder Derivative Suit Standing & 30-Day
Demand Tracker

Assess Article 189 derivative-action standing and the board/supervisory demand prerequisite.

Route trackerPRC lawAssumption-led estimate
  1. 01Enter facts
  2. 02Get estimate
  3. 03Check assumptions
  4. 04Verify or escalate

Assessment inputs

For a company limited by shares, the statutory standing threshold is generally 1% individually or in aggregate.
Legal basis

Current-law scope and cautions

  • Article 189 applies the 1% + continuous 180-day test to shareholders of a company limited by shares; LLC shareholders are not given that threshold.
  • After written demand, refusal or failure to sue within 30 days can open the direct-action route; urgent irreparable-harm situations can bypass the waiting period.
  • The demand recipient depends on whether the alleged wrongdoer is a director/officer or supervisor and whether an audit committee has replaced the supervisory body.

Use: This is a screening/estimation tool, not a legal opinion. Confirm the latest primary authority, regulator practice, local rules and transaction documents before acting.

Legal authorityReview the legal-basis section and cited source before relying on the output.
Tool typeRoute tracker
ScopeNational framework first
Local checkLocal rules and authority practice may differ
National framework → matter-specific file
Context note

The tool organizes the issue.
The facts determine the route.

China legal rules often begin with a national framework, while the operational answer can depend on location, dates, documents, status and authority practice. Use this result to structure the next verification step.

  • Check the inputs. Confirm dates, amounts, classifications and assumptions.
  • Read the authority. Verify the cited legal basis and effective version.
  • Localize the answer. Test relevant provincial, municipal or agency practice.
Working notes

Understanding this result

Use these checks before treating an automated output as a legal conclusion.

What does this tool provide?+

It provides a structured calculation, screening result or drafting aid based on the facts entered and the assumptions stated on this page.

What should be verified?+

Verify the legal authority, effective date, input data, territorial scope and any exclusions identified in the result.

Why can the operational answer differ?+

Documents, disputed facts, local implementation and authority discretion can affect the practical outcome.

When should the issue be escalated?+

Escalate material exposure, disputed facts, imminent deadlines, formal notices or any issue requiring representation or a legal opinion.

When the file needs review

Move from the tool to a verified legal route.

Use the output to organize the facts, then confirm the source, evidence, local implementation and available remedy before acting.