Abstract: Shareholders' loss of equity is a disciplinary measure for shareholders who have failed to fulfill the obligations of capital contribution; however， it is not a legal cause for the extinction of shareholders' capital obligations. The liability of defaulting shareholders should be observed and determined in the system of corporate capital. Under the statutory capital system， the defaulting shareholder shall be liable for the company within the scope of its delinquent capital contribution， depending on the company's handling of the recovery of equity. If the company chooses to transfer this equity， the rules of equity transfer shall be articulated， the transferee shall assume the obligation of capital contribution， and the defaulting shareholder shall be jointly and severally liable to the extent of its subscribed capital. At the same time， if the equity transfer amount is lower than the subscribed capital， the defaulting shareholder shall assume the responsibility to make up the amount. If the company chooses to cancel this part of equity， it shall articulate the rules of substantial reduction of capital， and the defaulting shareholder shall bear the supplementary liability to the creditors of the company within the scope of the capital contribution they have subscribed.

Key words: limited company; shareholder' loss of equity; capital contribution obligation; corporate autonomy; statutory capital system