The Legal Analysis On Inheritance To Shareholder Qualification Of The Limited Liability Corporation

Shareholder qualification is also called shareholder status. It is the status that a natural person an impersonal entity is to become shareholder on account of holding the company share. It's the basis that shareholders exercise right and assume obligation. Acquisition of shareholder qualification consists of original acquisition and received acquisition. The inheritor of company share occurs, that means the company share is to be inherited by heir of the dead shareholder when the death take place. Then an issue emerges in law field that is about how the heir receivedly acquires, shareholder qualification and become a new shareholder. Because company share contains both property rights and identity rights, shareholder qualification is just the reflection of identity rights. Therefore, shareholder qualification is a legal status which contains characteristic of identity interest and exclusive right. A limited liability corporation a form of corporation which contains both capital cooperation and trust cooperation. The trust cooperation of a limited liability corporation demands the shareholders totally get to agreement in investment and commercial cooperation, namely the company is based on deep trust and sincere cooperation amongst shareholders. A limited liability corporation is a kind of close company. The development of company relies on efficient internal cooperating and it is not open up for the outside world. Therefore, the characteristic of limited liability corporation rejects shareholder qualification be inherited limitlessly, and nonsupport the heir be shareholder unconditionally. Then we should set up certain conditions for inheritance to conform to the characteristic of limited liability corporation. There is difference between angle of view of canons of descent and company law toward inheritance of shareholder qualification. Most countries set that only property could be inherited and deny inheritance of status. From the angle of canons of descent shareholder qualification should not be inherited because status and qualification are not inside of the inheritable category canons of descent set. However, shareholder qualification is inheritable from the angle of company law if only certain conditions are matched. The inheritance of shareholder qualification is virtually a re-acquisition on condition that shareholders achieve whole agreement. Yet legal rules should be drawn up to exclude unconditional inheritance of shareholder qualification, but to provide conditional received acquisition which need to meet agreement amongst shareholders and go through certain procedure. With regard to item 76 of company law(2005) in China, there need to do some replenishment on condition of shareholder qualification and implement procedure. In order to reflect appeal for trust and agreement in limited liability corporation, there should make some restrictions on inheritance of shareholder qualification, so as to resolve contradiction between closure of limited liability corporation and autonomy of the will of shareholders as civil subject. The replenishment should include following contents: run according to the rules in the company constitution. If there is no rules concerning in the company constitution, inheritance of shareholder qualification should take place only on the condition that more than half of shareholders agree. If more than half of shareholders disagree the inheritance, shareholders who disagree should buy share of the dead shareholder from the heir. The one who do not buy the share should be treated as he agrees inheritance of shareholder qualification.