On The Legal Issues Of Limited Liability Company's Equity Transfer

Limited liability company's equity transfer has been a hot and difficult matter in both Company Law academic area and judicial practice area. However, the provision of China's Company Law regarding the limited liability company's equity transfer is rather simply and lack of executability. This article, which is on the basis of basic theory of balancing of interest and utilizes law and regulation and cases of relevant countries and regions as references, starts from the equity's nature, focus on the legal force of the equity transfer, and discusses several legal matters of limited liability company's equity transfer in China. The first chapter describes the legal nature and character of the equity, and regards the equity as an independent civil rights; the second chapter further describes the legal character and academic basis of limited liability company's equity transfer, and emphasizes that utilizing the basic theory of balancing of interest as the guideline to research and handle the equity transfer matter; the third chapter describes four common occasions' influence to the equity transfer: and the fourth chapter describes that three special equity transfer system shall constitute the major element of limited liability company's corporate governing.According to this article, due to limited liability company's natural of capital contribution and person contribution, the free to transfer the equity and the restrict to transfer the equity have been a pair of main confliction relating to the equity transfer system. Under the situations of equity transfer, company memorandum and article enacting, shareholder changing registration and the equity transfer whichresults in the "one person company", the combating and the development of such pair of confliction will directly affect the legal force of the equity transfer. Meanwhile, unlike the joint-stock limited company, the core of internal governing to the limited liability company is keeping the balance between insisting on the majority capital principle and protecting the medium and small shareholders' legal rights. Furthermore, the utilization of special equity transfer system, such as the voting power intrust and dissident shareholders" redemption rights will not only complete the equity transfer system in China, but also improve standard operation of limited liability company governing structure.