Research On The Transfer Of Defective Capital Contribution

Recent years, the disputes resulted from the transfer of defective capital contribution by the contributor often occur. While the current laws have no definite regulations for this issue, at the same time the academic theory also is lack of enough research upon the transfer of defective capital contribution. The litigation practices adopt various standards and make various decisions. Therefore the article mainly discusses the problems of the transfer of defective capital contribution, taking the limited liabilities companies as examples and the defective capital just referring to the capital resulted from defective contribution .In addition to the preface and conclusion, the article is divided into four parts, and the structure of the article is as follows:Partâ… is the introduction to the concept of the defective capital contribution. The defective contribution is the base of the defective capital. Therefore it is indispensable to define the defective contribution before discussing the problem of the transfer of defective capital contribution. Firstly, she introduces the realistic appearance of the defective capital contribution. According to different standards, it has many manifestations. It can be divided into no capital contribution and improper contribution according to the difference of behavior's method. Then she proceeds to subdivide to these two behavioral and detailed manifestations. Secondly, she introduces and evaluates the defective capital contribution in the company law. The author considers that the company law has manifest change on contribution system of the limited liability company's. The new regulation is beneficial to the encouragement invest, but to defective capital contribution, particularly the aspect of pursing duty, the regulation is too brief and lack of maneuverability. She also thinks the new problems of the defective capital contribution may appear after the revised law of company put into practice because of the shortage of the relevant systems. Partâ…¡is the introduction to the effect of the transfer agreements with defective capital contribution. How does the defective contribution will affect the transfer agreements with capital? How is the effect of the transfer agreements? This part introduces the establishment and validity of the contract on the transfer of capital and then resents a few theories on the legal effect of the transfer agreements with defective capital contribution. The discussion starts from the establishment and requirements of these agreements. Theoryâ… : No-effect. The theory insists that the capital contribution on the corporation is the essential condition to obtain capital on the corporation. The shareholder who has defective capital contribution means he hasn't become shareholder. The author thinks the theory neglects the requirements of the appearance of the commercial law and will do harm to the public security of the dealing. Theoryâ…¡: Difference. The theory insists that different effect of the transfer agreements of capital resulted from different capital system. The transfer agreements with defective capital contribution will be invalid in the company with legal capital system while will be valid in the company with warranty. She thinks different capital system just means different manner of the capital contribution. The capital contribution is the most basic duty of shareholder. There are not any difference. Theory hasn't give out persuasible reason about the relation between different capital systems and the shareholder qualifications. Theory III:Revocation. This theory insists that the effecting factor is the fraud meaning of the buyer of the capital contribution. The author thinks that theory makes a point of the heart meaning, and does not distinguish the degree of cheating details. It also disadvantages in maintenance of bargaining order and will produce many irregularities. Theoryâ…£:Validity. It thinks defective contribution doesn't affect the effect of the transfer agreements, and the agreements on defective capital contribution are valid. This part proceeds through analyzing three kinds of theories finally, saying the reason and the meaning that apply the theory. She claims that the transfer agreement on defective capital contribution is certain valid. Partâ…¢discusses how to share the risks on the equity transfer with defective capital contribution. Though defective capital contribution does not affect the effect of the transfer agreements, it loads numerous legal duties. The transferee will face many kinds of business risks after implementing, including the loses of capital , the restriction of exercising capital and the other related responsibility of law .This part analyzes the risks above all and pays attention to the related responsibility of law of transferee. She insists that the transferor's responsibility of law about defective capital contribution does not remit after the agreements perform. She claims that the transferee need not undertake the fault duty of the other shareholders, combining with the company and other shareholder's fault, the function to making the public notice and reliance of the formatting, reducing the bargain cost and protecting the trade safely ect. Company and other shareholders can't restrict transferee's exercising capital, but transferee should prove he has reasonable faith. Creditors of the company can claim the responsibilities of defective capital contribution to the shareholders directly in special conditions. The author proposes that the transferor and transferee should be jointly and severally liable to creditors of the company in order to fully protect the interests of creditors of the company.Partâ…£is the introduction to the relief on the transferees'rights. The risk of defective capital contribution was caused by the transferor, so the transferee should have the homologous right of relief after the transferee having good intentions undertook the risk. The author proceeds the analysis of the legal foundation that gives right relief to the transferee at first, setting out from the related provision in the law of contract in our country, claims that in the process of transferring defective capital contribution, the transferor should undertake the duty of breaking the contract because the transferor does not implement the contract of transfer of capital contribution properly. This is the legal foundation on which the transferee obtains the relief right.So it seems unnecessary that establishing the duty the assurance of defective. Secondly, the author inquiries into several paths to the right of the transferee's relief. According to the difference of the risks that transferee undertook, the author claims that the transferee should possess the right of defense, the right of recourse, the right of contract relief and the indemnity requests, and specifies the requirement, the object, the scope, and the term of the right of the recourse. when the transferee's contract purpose falls through, the transferee can also exercise the contract relieves and the indemnity requests. The above rights is only provided for the transferee after the event. In order to protect the safety of dealing, this part finally inquiries the measures that the transferee can take to defend the risk in advance, and points out that the transferee can take the various measures, letting the risk declined to lowest.According to the above analysis, the author provides the advices for the revised law of company that can let the provisions ruling the behavior of defective capital contribution perfect in her conclusions. The contents of the article is not perfect enough, but the author hope that the article can help the related theories and rules develop and become perfect step by step so that they can solve the problems of the company law in practice.