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In recent years, disputes between online influencers and enterprises in the new media industry have occurred frequently. Cases such as the disputes between Dong Yuhui and East Buy, Li Ziqi and Weinian have entered public view, exposing the deep-seated contradiction between the new media industry's heavy reliance on the "personal partnership attribute" and the lack of relevant rules. The core assets of the new media industry are people's intellectual achievements and even the "person" itself, namely elements including the public persona of online influencers, fan stickiness and public recognition centered on such influencers. When the core assets of a company are heavily dependent on the personal output of a specific influencer and the relevant accounts have reached a certain scale, conflicts between shareholders and IP disputes are often imminent (Note: The "IP" or "personal IP" generally referred to in the industry is not a strict legal concept. In the context of MCN business, it usually refers to a portfolio of intangible assets centered on the influencer with ownership to be clearly defined, which mainly covers property rights and interests such as account ownership, content copyright and trademark right, as well as the scope and method of licensed use of personality rights involving the influencer's name, portrait and other related rights. For ease of reference, the term "IP" is uniformly used below).

As the author set forth in the *Legal Guide on Signing Strategies for Internet Influencers and MCNs*, defining the legal relationship between influencers and MCNs (including the exclusive full-term performing arts brokerage model, account agreement model, labor relationship model, business cooperation model, etc., which are elaborated in detail in Part I of the Signing Guide) constitutes the first step for resolving relevant disputes. Where an influencer holds equity in an MCN, it means that the cooperative relationship between the two parties has reached the state of deep binding, which often imposes higher requirements on corporate governance. Shareholders maintain a harmonious relationship at the initial stage of entrepreneurship. However, once such circumstances as misalignment of powers and responsibilities, blurred boundaries and ecological imbalance occur in corporate governance, disputes over profit distribution and ownership of work achievements are extremely likely to arise.

At present, among close corporations in the new media industry, there is a prevailing phenomenon of fewer shareholders, concentrated equity ownership, the positions of chairman of the board of directors and general manager held concurrently by the same person, and the shareholders' meeting, board of directors and board of supervisors existing in name only, which breeds corporate deadlocks. However, not all internet influencers can successfully sever their ties with the corporations and obtain the ownership of relevant accounts in compliance with laws and regulations. In practice, a larger number of such cases fall into the cycle of prolonged confrontation and endless internal friction among all parties involved. Accordingly, this paper aims to analyze the causes of corporate deadlocks in the new media industry and provide references for remedy approaches for such cases.

I. Causes of Corporate Deadlock: Three Core "Lesions" of MCN Companies from a Legal Perspective

Corporate deadlock refers to a state where material conflicts of interest and disagreements between shareholders or the management of a company lead to the failure of the company's decision-making mechanism, serious difficulties in its operation and management, the frustration of shareholders' expectations of rights such as obtaining asset proceeds and participating in major decision-making, and the risk of damage to shareholders' interests caused by the mere continued existence of the company. In the new media industry, the emergence of such deadlock often stems from the serious separation between shareholders' legally equal shareholding rights and their de facto control over the company's assets.

【Typical Behavior Pattern】 In such disputes, a common and highly detrimental mode is as follows: Under the structure of equal equity holding (50%:50%), one shareholder utilizes its de facto control over the company's core accounts to unilaterally dissociate and transfer the said accounts from the company's operation system. This act will immediately hollow out the statutory rights of other shareholders, render the corporate governance mechanism completely dysfunctional, and plunge the company into a deadlock where de facto control supersedes the legal person property rights of the company.

Most such deadlocked MCN companies have the following core "defects":

(I) The legal boundaries between the ownership of online influencer IP and corporate property are blurred, and the party controlling the accounts is prone to committing shareholder oppression.

The content production of online influencers relies on team collaboration. If the profit distribution ratios corresponding to the respective contributions of the influencer, the execution party and the capital contributor are not reasonably quantified in the shareholders' agreement at the initial stage of cooperation, after the influencer has established a stable public persona and content output style, they may suspend broadcasting or transfer accounts without authorization. Meanwhile, the execution party may package its auxiliary execution work as core creative work to seize the ownership of cooperative outcomes, turning the two parties from cooperative symbiosis to mutual infringement. For accounts with influencer attributes, the registration subject (via personal real-name authentication) is often inconsistent with the actual operation subject (company team). Once a shareholding influencer has the opportunity to unbind the account without authorization, which essentially constitutes a transfer of the company's core assets, other shareholders will be placed in a very passive position. For MCN companies, the control right over accounts means the control right over the company's assets and future cash flow sources. The release of account content is an intuitive reflection of the company's business plan and development orientation. Even under the circumstance of equal shareholding or a disadvantaged shareholding position, the party holding the control right over the accounts can still realize de facto shareholder oppression. MCN companies that have invested heavy operation costs in accounts will stipulate in talent agency agreements that the accounts are owned by the company. However, if there are unclear stipulations on account ownership between the influencer and the company, as well as among all shareholders in the early stage, it will be extremely difficult for other shareholders to safeguard their legitimate rights and interests subsequently. (For principles for determining account ownership in litigation, please refer to *Signing Guide (Part II)* for details.)

(II) Defects in the group's equity design and governance system lead to the failure of the governance system over account assets.

Under the majority voting mechanism, if the equity structure design of a company is unbalanced (for example, the voting rights of the influencer party and the execution party, the two interest camps represented by shareholders of the holding platform, are completely equal), the number of shareholders is limited, the number of directors appointed by each shareholder party is basically equivalent or identical, and the group lacks a final decision-maker, then when intense contradictions and conflicts arise between shareholders or directors and all parties adopt a fully confrontational attitude, neither party may be able to form a voting majority. Where the articles of association only stipulate the convening procedures of the shareholders' meeting but lack a flexible remedy mechanism to address the inaction of all parties, the shareholders' right to propose the convening of a shareholders' meeting will be reduced to a tool for interest gaming. The operating company running the backend of affiliated accounts has no separately agreed governance rules and completely relies on the decision output of the holding platform, which will further amplify the impact of equity defects. Key business acts of the operating company, including personnel appointment and removal, fund approval, disposal of core assets and other key operations, will also come to a standstill due to the decision-making failure of the holding platform, ultimately leading to the complete failure of the entire group governance system in the governance of account assets.

(III) Conflicts between Self-Help Conduct and Legal Boundaries in IP Disputes

After a deadlock arises, the two parties often resort to extreme self-help measures, which cross the legal red line: The influencer party, taking advantage of its real-name authentication status, unbinds the company's backend system and transfers the control right of the account without authorization, which is suspected of abuse of shareholders' rights to the detriment of the interests of the company or other shareholders. If the company party fights back by detaining the influencer's personal property, disclosing their privacy and other means, it may constitute a tort. In the meanwhile, the misalignment of powers and responsibilities in corporate governance will further trigger operational risks. The influencer party has control over the account content production and operation team, business negotiation and contract management, but is not the legal representative of the company, hence facing operational obstacles of having no authority to perform duties on behalf of the company externally. The legal representative of the MCN company registered in industrial and commercial registration (which may be the capital contributor or the execution party) is separated from the de facto control right of the company: it assumes legal liabilities externally but has no access to the core assets of the company, forming a governance deadlock between the two parties featured by "the party assuming liabilities holds no actual power, while the party holding power enjoys no legitimate status". If the conflict escalates further, either party suspected of transferring company funds up to the statutory amount threshold may also commit the crime of embezzlement by taking advantage of official duties, and face criminal accountability.

II. Remedial Approaches for Proper Vesting of Powers and Responsibilities and Risk Backstopping

In view of the characteristic that parties to cases in the cultural and entertainment industry are prone to fall into emotional confrontation, we shall first guide the parties to break free from emotional interference, recognize that the zero-sum game of emotional confrontation will only result in IP depreciation and mutual losses, and return to the rational path of resolving disputes pursuant to rules. The specific remedy approaches are set out below:

(I) Urgent Interdiction of Asset Transfer and Restoration of Governance Structure

The core assets of MCN are accounts, backend accounts and cash flow. Emergency asset preservation serves as the foundation of all subsequent legal actions. Therefore, a statement on ownership dispute and relevant evidence shall be formally issued to relevant platforms as soon as possible, to apply for the suspension of key operations including account unbinding and subject alteration; meanwhile, an application for pre-litigation conduct preservation or property preservation shall be filed with the court, to prevent the accounts from being transferred, disposed of or abused through judicial compulsory measures. While adopting preservation measures, core evidence shall be systematically fixed, including evidence proving the company's input costs, evidence proving that the proceeds from the accounts belong to the company, and evidence of consensus on account ownership. These three categories of evidence jointly constitute the right basis for claiming the accounts as the legal person property of the company. In parallel with the above actions, measures shall be taken immediately to recover core seals and control documents. On this basis, a legal letter requesting the return of assets and cooperation in handover shall be sent to the opposite party, to declare the legal person property right of the company, clarify the illegal nature and compensation liability of unilaterally transferring assets, and secure the initiative for subsequent negotiations or litigation. Oppressed shareholders may first try internal remedies such as submitting a written proposal to convene an interim shareholders' meeting, clarify the asset return, management and control plan, and create conditions for multi-path deadlock resolution.

(II) Title Confirmation Litigation Lays the Foundation for Distribution

If both parties have the intention to settle, they may first apply to the platform operator for dispute mediation. Where consultations fail, a lawsuit for confirmation of account ownership shall be filed to clarify the ownership of core assets, claim that the account and relevant proceeds belong to the company, demand the influencer to return the control right of the account and compensate for losses, so as to provide legal basis for proceeds distribution. If both parties reach a settlement intention during litigation with confirmation that the account and relevant proceeds belong to the company, a legal document system shall be established thereafter, and plans for asset recovery and benefit exchange shall be formulated. As for asset recovery, a core asset handover agreement shall be signed, while the principles for benefit exchange shall be clarified, the core IP value of the influencer shall be recognized, and the proceeds distribution ratio shall be adjusted accordingly. It should be noted that if one party keeps controlling the account, which constitutes shareholder oppression, the oppressed shareholder shall rely on a solid evidence chain to increase bargaining chips in negotiations, otherwise it will be difficult to realize the return of the account to the company.

(III) Multiple Litigation Remedy Channels for Oppressed Shareholders

As an Internet influencer and a shareholder of the company, by virtue of the advantage of actual control over the core accounts, he unilaterally separates the core accounts on which the company's operation relies from the company's system and takes exclusive control of them, meanwhile withholds the operating revenue attributable to the aforesaid accounts, and even uses such accounts to engage in businesses competing with the company. Such acts are suspected of constituting abuse of shareholder rights, which seriously disrupts the normal operation order of the company. Oppressed shareholders may, based on different rights protection objectives, choose the following hierarchical and progressive litigation remedy paths:

First, a lawsuit for damages arising from abuse of rights by founding shareholders. Pursuant to Article 21 of the *Company Law of the People's Republic of China*, where an influencer, as a shareholder, abuses his dominant control over the account to transfer the company's core assets, intercept revenues and engage in competitive businesses, which directly harms the interests of the company and other shareholders, the oppressed shareholder shall have the right to initiate an action in his own name and require the influencer to be liable for compensation. The scope of compensation shall be determined in light of the actual circumstances of the case: direct losses include the operating income lost by the company after the account transfer, business losses arising from customer diversion, necessary costs incurred to maintain the company's operations, etc.; anticipated losses include the depreciation loss of the account IP caused by idleness due to operational deadlock, compensation for breach of contract or loss of expected proceeds arising from loss of control of the account in relation to signed commercial cooperation agreements, etc. During the litigation, focus shall be placed on adducing evidence concerning the influencer's act of transferring the account, the fact of revenue interception, and the causal relationship between the competitive businesses and the company's losses, so as to ensure that the claim for losses is fully supported by evidence.

Second, file an action for share repurchase. Oppressed shareholders may request the company to repurchase their shares pursuant to Paragraph 3 of Article 89 of the Company Law of the People's Republic of China (2023 Revision). The core of such claim rests on establishing that even if the party controlling the core accounts holds 50% of the shares, it has obtained de facto control over the company by controlling the principal business and obstructing the formation of corporate decisions, thus constituting a de facto controlling shareholder that abuses its rights and seriously damages the interests of other shareholders, thereby triggering the right to claim share repurchase.

Thirdly, filing a lawsuit for judicial dissolution of a company shall be taken as a residual remedy and applied prudently. In terms of litigation motives, oppressed shareholders choosing this approach usually do so under extreme circumstances where equity repurchase is inaccessible (e.g. internet influencers refuse to cooperate in equity valuation, or the company has no intention to repurchase the equity), core assets continue to depreciate (e.g. idling of accounts leads to loss of followers, and the value of intellectual property (IP) shrinks), corporate deadlock cannot be resolved through other channels (internal remedies have been exhausted), and the continued existence of the company will cause greater losses to their own interests. They hope to terminate the company's existence through judicial procedures and recover part of their losses by distributing remaining assets upon liquidation. However, if the core accounts have been transferred, filing for judicial dissolution will face significant adverse consequences: On the one hand, the core operating assets of the company are out of control, and the property available for distribution during liquidation only includes funds retained on platforms, office equipment and other remaining assets. Priority shall be given to paying off the company's debts (such as rent, employee salaries, taxes and fees, etc.), so the property finally distributable to oppressed shareholders is limited, which cannot make up for the fundamental losses arising from the loss of accounts. On the other hand, the process of dissolution and liquidation is time-consuming, during which the retained funds may be exhausted due to litigation preservation, debt repayment and other reasons.

(IV) Settlement Negotiation and Public Opinion Management and Control, as well as the Implementation of the Smooth Exit Mechanism

The core solution to shareholder disputes in the new media industry is to realize a clean, smooth and compliant exit through rule-based design, so as to avoid the devaluation of core IP during confrontations. Interest distribution shall be premised on clear confirmation of account ownership, with fair value determined via third-party assessment, and the nature of funds from transactions including equity repurchase and asset transfer shall be strictly distinguished to ensure tax compliance. For exit implementation, all obligations shall be explicitly locked down, ranging from equity alteration, complete unbinding of assets to joint audit of financial data, and the exiting party shall be required to issue a debt indemnity commitment to eliminate residual risks. Finally, by forcibly linking payment nodes with core performance acts and stipulating strict mutual confidentiality obligations, an effective performance check and balance mechanism and public opinion firewall shall be established. On the basis of preserving IP value, the legal closure of full equity settlement upon shareholder exit and consistency between accounting records and actual assets shall be ultimately achieved.

III. Industry Insights: Putting Rules First Is the Optimal Approach to Risk Prevention and Control

The deadlock plaguing the new media industry stems from the fundamental contradiction between the industry's heavy reliance on its personal-integrated nature and the lack of established rules. The solution to breaking such deadlock lies in shifting from the pursuit of ambiguous control over the industry ecosystem to the establishment of a rule system with clearly defined rights and obligations, thereby realizing the return to the essence of commerce.

First of all, rights shall be defined in advance, interests shall be balanced and exit paths shall be preset through agreements. Clarifying the legal boundaries of IP shall be taken as the top priority: that is, at the very beginning of cooperation, the ownership of personal rights and interests (such as the right of name and the right of portrait) and property rights and interests (such as account rights, copyright and trademark rights) shall be explicitly specified through documents including shareholders' agreements. Where an account is registered by an individual, the *Asset Transfer Agreement* must be signed, and a co-management mechanism for core assets shall be established, so as to legally establish the status of the company as the operating entity.

The equity structure shall serve the purpose of long-term value binding, and flexible mechanisms such as dynamic equity and share options shall be designed to match the contributions of influencer IPs and the resource input of operators, so as to avoid the risk of decision-making deadlock implicit in equal shareholding. All rules concerning IP ownership, revenue distribution, dividend payout and exit, especially the pricing method for account repurchase, shall be explicitly specified in the brokerage contract and shareholders' agreement. Putting in place clear and enforceable exit mechanisms in advance is the key to avoiding subsequent disputes. The agreement shall stipulate differentiated equity disposal plans and calculation methods for repurchase prices in view of different scenarios such as contract expiration, job-hopping in breach of contract, and major negative incidents, to ensure that there are clear rules to follow when any party exits. Finally, the governance principle of equivalence of rights and responsibilities shall be adhered to, to ensure that the statutory representative authority is aligned with the control right. When a dispute arises, all parties shall be guided to resolve it through legal channels such as litigation over shareholders' right to information and litigation for confirmation of asset rights, so that conflicts are handled within the framework of rules.

In the final analysis, the sustainable symbiosis between influencers and MCNs cannot be maintained by trust alone, and must be underpinned by well-crafted rules as the cornerstone. Systematically consolidating the four pillars of rights ownership, governance, distribution and exit from the source is the most effective investment to avoid future deadlocks and realize long-term win-win outcomes.

Closing Message

This article aims to provide a systematic set of analysis frameworks and remedial path references for corporate deadlocks between MCN companies and their equity-holding influencers from a practical perspective. The handling of such disputes involves the subsistence of core IP and the preservation of its commercial value, and its complexity lies in the deep intertwining of legal judgments and commercial considerations. The author specializes in corporate governance and complex dispute resolution in the culture, entertainment and new media sectors, and is committed to providing the industry with integrated "finance, commerce and law" compliance and risk control solutions. If you, as MCN entrepreneurs, influencer teams or investors, are facing similar challenges, or wish to conduct proactive planning on relevant rules (such as shareholders' agreements, IP ownership arrangements, dynamic equity structures), please feel free to contact us for discussion.