I. Case Review

Zhao Bingxian and Lu Juan co-founded Zhongzheng Wanrong after their marriage. During the marriage, Lu Juan served as the company's Chief Financial Officer, while Zhao Bingxian led the company's investment and operational direction. The two collaborated to promote the development of Zhongzheng Wanrong into a core investment platform controlling multiple listed companies.

In April 2010, citing domestic violence and the existence of an extramarital affair, Lu Juan filed for divorce for the first time, with the core demand being the division of the couple's joint property, including the equity of Zhongzheng Wanrong. At that time, the estimated value of the involved property exceeded 2 billion yuan, and the case immediately attracted extensive attention from the capital market. Over the next fifteen years, the case went through multiple trials and twists, until November 2025, the Third Intermediate People's Court of Beijing made a final judgment on the second instance, upholding the core judgment content of the first instance, namely, the average division of the equity of Zhongzheng Wanrong between the two parties.

II. Core Dispute Focus —— Equity Division

1. Dispute over the nature of equity ownership: During the litigation, Zhao Bingxian had claimed that the 80%:20% shareholding ratio registered with the industry and commerce administration was a clear agreement between the parties regarding the joint property, and the division ratio should be determined accordingly; Lu Juan反驳称，this registration ratio was merely a public form required for the company's operation and not a property agreement. As a founding shareholder and core management personnel, her substantial contribution to the company's development should be an important basis for determining the ownership of the equity. The two parties had fundamental disagreements over whether the equity belonged to "co-ownership" and the basis for division.

2. Dispute over the rationality of the division plan: The parties and their agents engaged in a fierce debate around the proposal of "directly adjusting the shareholding ratio of the controlling shareholder from 80%:20% to 50%:50%". The Zhao Bingxian side argued that this proposal would disrupt the stability of the company's equity structure, harm the company's corporate personality and the efficiency of subsequent operational decision-making, and violate the basic requirements of the "Company Law" for corporate governance. The Lu Juan side, however, claimed that this proposal conforms to the principle of "equal division of joint property by married couples" in the "Marriage and Family Chapter" of the "Civil Code", and both parties are registered shareholders, so the division would not lead to the involvement of non-shareholders in the company, and there would be no conflict of corporate personality.

III. Legal Application Logic of Dividing Shares of a Limited Company in Court Rulings —— Analysis

（1）Determination of Equity Ownership: Registration Ratio Does Not Constitute an Unquestioned Agreement

In this case, the court did not adopt the proposal to divide the equity in accordance with the business registration ratio (80%:20%), but instead directly applied the principle of equal division. The core legal basis lies in the priority of the co-ownership attribute of the common property of the couple over the appearance of the business registration. According to Article 10 of the "Interpretation (II) of the Supreme People's Court on the Application of the Marriage and Family Article of the Civil Code of the People's Republic of China" (hereinafter referred to as the "Interpretation (II) of the Marriage and Family Article"), which came into effect on February 1, 2025: "When the couple invests in a limited liability company with common property and are both registered as shareholders, if there is no agreement or the agreement is unclear regarding the ownership of the corresponding equity, when a divorce occurs, if one party requests that the equity division be determined according to the amount of capital contributed as recorded in the shareholders' register or the company's articles of association, the people's court shall not support such a request; in response to the parties' requests for the division of common property, the people's court shall handle them in accordance with Article 1087 of the Civil Code."

Considering judicial practice, the identification of equity ownership in a limited liability company requires distinguishing among three typical situations, and the judgment logic and practice rules of this case are highly consistent with:

（II）Application of the Division Principle: Balancing the interests of the innocent party and the degree of contribution

The average division result of the final judgment in this case, while seemingly following the principle of "equal division," actually implies a judgment approach of "equal division as the principle, special adjustment as the exception," and at the same time reflects the protection of the rights and interests of the innocent party.

1.Implicit Consideration of the Rights of the Party Without Fault

According to Article 1087 of the Civil Code: “At the time of divorce, the joint property of the couple shall be disposed of by mutual agreement; if the agreement cannot be reached, the People's Court shall make a judgment according to the specific circumstances of the property, in accordance with the principle of considering the rights and interests of the children, the female party, and the party without fault.” During the lawsuit, Lu Juan submitted evidence such as police records, medical diagnosis certificates, and witness testimony, claiming that the male party had committed acts of domestic violence, affairs, and other fault behaviors. Although the judgment did not explicitly state “the party without fault” as a direct basis, in conjunction with the judicial practice trend of prioritizing the rights and interests of the party without fault, her claim constitutes a strengthened reason for an equal division, and is consistent with the logic that the party without fault should receive no less than 50% of the shares under the joint ownership of equity.

2.Balancing the Dual Attributes of Equity

The equity of a limited liability company combines property attributes (such as dividend rights, the right to claim the price of equity transfer, and the right to distribute remaining assets) with personal attributes (such as the right to vote, the right to be informed, and the right to participate in major decision-making). In this case, the court's division plan effectively balances the relationship between the two: on the property side, the equity value is considered as the joint property of the couple, and is divided equally according to the provisions of the Marriage and Family Law; on the personal side, as both parties are registered shareholders of Zhongzheng Wanrong, they do not need to comply with the procedures for non-shareholder spouses to obtain consent under Article 71 of the Company Law, and can directly adjust the equity ratio without valuation compensation, thus protecting property rights while maintaining the corporate harmony.

(III) Consideration of Special Circumstances: The Judicial Boundary of Associated Impact on Listed Companies

The uniqueness of this case lies in the fact that as the controlling shareholder of Wuhua Medicine, Zhongzheng Wanrong's equity division directly led to the actual controller of the listed company transitioning from “single control” to “no actual controller,” which may affect the stock price of the listed company and the interests of minority shareholders. However, the court ultimately did not adjust the division plan due to such commercial impacts, highlighting the judicial boundary of “marriage and family disputes taking precedence over commercial appearances.”

Firstly, the division of divorce property is a family law dispute, which is subject to the provisions of the Marriage and Family Code, and the change in control of Wuhua Medicine is an indirect consequence, not a legal reason to hinder fair division; secondly, Wuhua Medicine's announcement showed that there was no substantial impact on operations, and the court accordingly determined that the division was risk-free; thirdly, Lu Juan has professional qualifications and has been involved in management for a long time, and her shareholder qualifications are compatible with the company's governance needs.

In judicial practice, If the division of shares may lead to a deadlock in the company's operations (such as when both parties have intense conflicts and no management experience in the company) or harm the interests of creditors (such as when the company has large outstanding debts, and the division of shares leads to a decrease in its ability to repay), the court will usually adjust the method of division, such as adopting the scheme of "one party owning all the shares and paying a discounted compensation to the other party". However, in this case, the above situations do not exist, and the judgment for the direct division of shares has sufficient factual and legal basis.