When a Chinese counterparty stops paying and the company itself shows no funds, creditors look at the person who ran it. Director liability claims in China are available, but only where the director's own conduct, not merely the company's failure to pay, caused or deepened the loss. This page sets out how that assessment and the claim actually run for a foreign creditor holding an unpaid invoice, an unpaid shipment, or an unenforced judgment.
A foreign creditor usually arrives at this point from one of three positions: an invoice that stopped being paid, goods shipped and never settled, or a judgment already obtained that the company simply ignores. The debtor company shows no assets on its books, yet the same trade, the same customers, or the same premises often continue under a related name. Before anything is drafted, we review the corporate structure, the payment history, and the timing of events around the moment the company stopped honouring its obligations. That review sits inside our wider director liability claims service, which covers the assessment stage across the jurisdictions where this route exists. Only where the review points to a viable case does the file move forward.
If the file supports a claim, the next step is usually a formal written demand addressed to the company and, where the facts justify it, to the individual director by name. The demand sets out the basis for personal exposure and gives the debtor a defined window to respond before litigation is prepared. Some directors settle at this stage once they see the evidence assembled against them. Others do not respond at all, which itself becomes part of the record.
Where the demand produces nothing, the claim proceeds as a civil action before the competent people's court. The court examines whether the corporate form was respected or whether the director used it to shift value away from creditors. This is litigation, conducted through admitted lawyers in the jurisdiction concerned, with the creditor deciding at each stage whether the case still justifies the cost of continuing.
Courts do not set aside the corporate form because a company became insolvent. They look for specific conduct: mixing personal and company funds, moving assets out of the company once a claim was foreseeable, continuing to trade after the company should have been wound up, or a personal undertaking the director gave and then disregarded. The doctrine of piercing the corporate veil is applied narrowly, and the paperwork surrounding the period when payments stopped usually matters more than the size of the unpaid invoice itself.
The assessment also looks past the director named on the contract that was signed. Chinese counterparties frequently sit inside a wider group of related companies, and the individual with practical control of the money is not always the person who signed the original agreement. Where a creditor already has exposure to the same debtor group through other trade or another dispute, that wider picture belongs inside the same review as our recovery work in China generally, rather than being treated as an unrelated file.
In practice, the evidence that carries weight includes bank records showing where company money went, board or management correspondence from the relevant period, contracts signed personally by the director, and any record of the company being stripped of stock, equipment, or receivables shortly before or after the creditor's claim arose. Weak or circumstantial material rarely survives contact with the debtor's own version of events.
Private investigation is a prohibited activity in China, and no part of this work is described, or carried out, as investigation. What we deliver instead is legal research and corporate intelligence drawn from public and licensed sources: corporate filings, accessible court records, and commercial databases available to licensed providers operating in the jurisdiction. Anything resembling surveillance of an individual sits outside what this firm, or any correspondent instructed on the file, will undertake, and the assessment is built without it.
Pre-legal collection activity in China is carried out by a registered provider licensed for that purpose, not by SOLUTIO directly. Where a pre-legal step is appropriate before litigation, that step is handed to the licensed provider under a separate, disclosed arrangement, and the creditor is told exactly who is doing what at each point.
The fee basis for the assessment, and for any litigation that follows it, is agreed with the client before instruction. We do not offer a fee that consists solely of a share of what is eventually recovered, because that structure is restricted in this jurisdiction. The engagement typically opens with a written pre-action assessment report that sets out, in plain terms, what the file can and cannot support.
SOLUTIO assesses the claim, sets the strategy, and coordinates the file from the creditor's side throughout the process. Admitted lawyers and licensed providers in China draft and file the claim, appear before the court, and handle formal service on the debtor company and on the director personally. We remain accountable to the client for the quality of the assessment and for the decisions the client is asked to make at each stage; the correspondent is accountable for how the local proceedings are conducted.
This division exists for a practical reason. A creditor who instructs a local firm directly, without an independent assessment first, often only discovers the weakness of a veil-piercing argument after fees have already been spent on filing. Our review is built to surface that weakness before the file leaves our hands, not after a court has ruled on it.
Where the debtor group has assets or operations in more than one country, coordination between the assessment, the local litigation team, and any parallel enforcement work elsewhere is managed centrally, so the client receives one coherent view of the file rather than separate updates from unconnected sources.
Yes, in defined circumstances where the director's own conduct, not simply the company's failure to pay, caused or worsened the creditor's loss. The claim proceeds as a civil action, and the facts on control and on the director's specific conduct decide whether it succeeds.
Enforcement outside China depends on the treaty position between China and the country where the director holds assets, and on that country's own domestic rules. We check this before recommending that a claim be filed, not after a judgment has already been obtained.
The length depends on the court, on how contested the evidence around control and conduct turns out to be, and on whether the debtor defends the claim at all. We do not quote a fixed period before the file has been reviewed.
For an exporter still holding the shipment documents and an invoice that was never paid, the real risk is not the claim itself but the wrong first step taken before it. Filing against the wrong entity, or filing before the evidence on control has been properly assembled, can close off a stronger claim before a court ever hears it. The question worth answering first is whether this particular file, on its own facts, supports a claim against the director at all.