Study On Expulsion Of Shareholders Of Limited Liability Company

The limited liability company(LLC), which is the product of jurists' ideal, is a form of the company that appeared relatively late. Ever since its emergence, it is largely favored and employed by a wide range of countries. And China is no exception. The limited liability company is one of the capital joint ventures, but it also has a strong nature of person joint for the dependence among shareholders is essential for such companies. So, when the person joint of the company is ruined by shareholders themselves or their acts, the business purposes of the company would be damaged. However, under such circumstances, there is no relief, neither to the company nor to the shareholders, to be found in the Corporation Law of China. The only solution when deadlock occurred is to dissolve the company which means the death of the business, an apparently not good choice for those who want to maintain its existence. Therefore, it is necessary to introduce the shareholders expulsion system to deal with the deadlock. The system is a major one in the corporate law that has direct effects on the identity of the shareholder by forcibly depriving the investors the qualifications of the shareholders. The establishment and application of the system could cast a significant positive light on the solution of the deadlock of the LLC for it is irreplaceable exceptional compared with other solutions, not to mention its positive role on consummating the whole system of the corporate law, regulating the legal adjustment on the qualification of shareholders and ensuring reasonable interests of faithful shareholders.The right of expulsion of shareholders is a very important regime in the corporation law. When the comportments or the personal factors of the shareholders obstruct or influence seriously the development of the corporation and the common interest of the other shareholders, it becomes a natural requirement and regime arrangement to eliminate the negative influence of specific shareholders and to avoid the aggravation of the internal contradictions and conflicts in order to maintain the existence and continuous development and consequently, to safeguard the common interest of the other shareholders. This is exactly the starting point and the final conclusion of the thesis.From the study of the system's history, the development in various contemporary legal systems as well as the latest tendency, we could know that the shareholder expulsion system originated from person joint company as the exception from the dissolving system, expanded its application scale for its unique regulation features and protective effects on the common interests of companies and its shareholders and gradually established its due application scale and the borders with other conflict resolving systems, especially those with the dissolving system. Nowadays, the shareholder expulsion system has become a common system for all types of companies, which is one of the conclusions of this essay according to the methods of study mentioned above. Moreover, combined with the comparison study of the current circumstances in China, this essay proves the necessity and feasibility of the application of the system in China. The final of my article presents the readers the concrete scheme of the system that has Chinese characteristics.