Analysis Of Some Issues On Transfer Of Shares In Limited Corporation

The transfer of shares of Limited Corporation as a way to exercise shareholders'right and a way to protect their own interests is a common phenomenon in the practice. The implementation of the"PRC Company Law"(hereafter referred to the"Company Law") in January 1, 2006, although greatly improved the legislation of the transfer of shares of the Limited Corporation, solving a lot of practical problems, but it is still too simple and principles, the key issue is no clear-specific operational requirements. In judicial practice, lawsuits of the transfer of shares filed by the increasing number of these issues. It is a far-reaching significance to analysis, to find the root cause and solution, in theory and in reality. This also is the writing primary intention of this article.This text mainly discusses a few basic legal problems that cause the disputes in the transfer of shares. Let the procedures of the shares transfer as the access, and use the method of comparative analysis and case analysis to discuss the legal problems of privileged allocation of shareholders, the contract of the share transfer, the effect of shares transfer. In addition to the introduction and conclusion, the full text is divided into four parts.The first part of thesis is about the basic legal problem of the transfer of shares of the Limited Corporation. First, analysis the uniqueness of the transfer of shares of Limited Corporation, and discuss the reasonable and necessary to restrict transfer of shares combining the characteristics of Limited Corporation that is the joint with the people and funds. It then describes the procedures and the principle for the transfer of shares of the Limited Corporation and the describes the common procedures of the transfer of shares of Limited Corporation, and point out two basic principles of the transfer of shares of the Limited Corporation that is the principle of free transfer and the principle of summary transfer.The second part of thesis analysis the effect of contract of the transfer of shares under the special circumstances with studying the limited liability and equity of the transfer contract. Firstly I analysis the characteristics of the contract of the share transfer, and point out the differences between the civil contracts and the contract of the transfer of shares. Then all of the special circumstances under contract for the transfer of shares are analyzed, and inspect the effectiveness and related legislative proposals. Those contract which violate the constitution of the company, should be determined whether the restriction on the transfer shareholders'right in the constitution of the company is inconsistent with the Company Law. If conflict, the contract that violate the Constitution of the company is effective. Conversely, if not inconsistent, the contract is invalid. The contract lacking the consent procedure, respecting for autonomy of the perspective of shareholders of the company, should be given the right to revoke the contract. If the other shareholders do not use the right to revoke, transfer contract is still valid. For the flawed transfer contract, the writer believes that the subjective attitude of the assignee should be inspected. If it is goodwill, he can require revoke the contract, for be cheated. If he accept the transfer with knowing the fact, the contract is effective. If assignee require revoke the contract with the reason of being cheated to confront the creditors of the company, the people's court would not support it. The effective of the transference that transfer the shareholders'right partly, I believe that the subject of contract shall belong to the common interests or the self-interests should be considered. To the common interests, because the existence of companies involved in the overall interests of shareholders and the company, to prevent holding minority equity holders who do not even participate in decision making, and abuse of the right to vote would damage the interests of the company, separate transfer should be forbidden. To the self-interests, for it cannot exist independent of shareholders'right, and cannot transfer without the shareholders'right, it can be transferred, only when be specific and be independent. Hiding-named investor equity transfer contract should take concrete analysis of concrete conditions. We believe that as the modern market transactions are intricate and complex, rapidly methods are needed. So we can not ask the parties to spend a lot of time and effort to shareholders of the true situation before the transaction. And it is necessary to protect the security of transactions, so the judgment of the effectiveness of the transfer contract that investors without the agreement with the hidden-named investor should follow the principle of publicity Marxism and the principle of appearance Marxism. If a third party with goodwill, the transfer contract is effective. For hidden-named investor sign the transfer contract to a third person, but the named investor advocate on behalf of the shareholders and reject to perform the contract, I believe equity transfer contract is effective. Unnamed investors because of non-confrontation to a third person, but the other is the name of the investor, Under such circumstances, If the hidden-investor can prove the fact that has invested, and can furnish the effective contract that is made between the investor and hidden investor, the shareholders'right should be authorized, that is the transfer contract shall be determined effectively.The third part of thesis is about the privileged allocation of shareholders of Limited Corporation. First I analyze the characteristics and theoretical basis for privileged allocation of shareholders of Limited Corporation. Then mainly discuss the main part of the privileged allocation of shareholders, the condition and the time to use the right, and the conflict when the investors use the right. I believe that the scope of the person who has the right of privileged allocation of shareholders should not be limited to the company's dissent shareholders, but should be extended to all depositors continued shareholders. For the same conditions, I believe that the transfer price of the privileged allocation for the continued shareholders should be as the same as the price that determined by transfer shareholders and non-shareholders. On the transfer volume, besides the agreement of the transfer shareholders, the right of privileged allocation cannot be transfer partly. I advocate the right of privileged allocation in the exercising should have a time limit, the law should provide for the exercising of the right with the statutory time limit. When several shareholders to exercise the right of privileged allocation, they should consult the purchase proportion. If they cannon get agreement, they must exercise the right according to the proportion when they truly invest. Finally, I discuss the issue of protecting the right of privileged allocation. I hope the protection and the redress of the privileged allocation of shareholders of Limited Corporation will be perfect soon.The fourth part of thesis is about the effective about the transfer contract. Through the re-understanding of the meaning of the effect of the transfer of shares, and analyze the transfer contract, the register of shareholders of the company deregistration and the relation between the effectiveness of the transfer contract and the registration in Industry bodies, I inspect the effective of the shares transfer contract. I think the parties reach agreement on the transfer of shares is not the elements of the effective transfer of shares. After deregister the change, the transfer of shares of the company have the effect to confront the company and its shareholders. Having the publicity character after formal registration by the industrial bodies, it has the effect to confront the third party.Because the Limited Corporation has mixed character with people and funds, and the imperfections of the existing company law, which led to many problems and disputes in the transfer of shares in practice. So it is very important to grasp the transfer of shares of Limited Corporation though overall study, analyze the various legal issues, and make the legislative proposals to seek the best path to resolve the dispute. That is bound to protect the investors'interest and facilitate the transfer of shares greatly.