The Study Of Some Issues On The Share Equity Inheritance Of Limited Liability Company

The Article 76 in the new"The Company Law of the People's Republic of China"stipulates that: after the death of the shareholder, its legitimate heir may inherit the share equity, unless there is provided otherwise in the articles of the association. The provision ended the discussion of whether the share equity can be inherited and identified the principle that the shareholder eligibility can be inherited. However the provision is abstract and has no regulations on the details during the share equity inheritance, so it lacks the operability in practices. As a legal practitioner, the author has encountered many problems on the share equity inheritance in my actual work, and there are no corresponding law provisions found in the"Company Law"and"Inheritance Law"to resolve these problems. Therefore, the author, the author attempts to explore some problems in the share equity inheritance and proposes the corresponding and appropriate solutions, to attract the attention of the legislatures and to promote there problems to be resolved as soon as possible.The thesis will be divided into four parts. In the first part, the object of the share equity inheritance, the nature of share equity are discussed and the differences between the share equity inheritance and general property inheritance also be identified with comparison. The author deems that the share equity inheritance includes the contribution inheritance and shareholder eligibility inheritance, and Article 76 in"Company Law"actually is the provision on share equity inheritance. In the second part, the specificity of share equity inheritance is discussed. The modes of the share equity include the mandatory transfer, free inheritance and restricted inheritance. The legislative mode of share equity inheritance in our nation is free inheritance; however it is authorized to restrict the inheritance in the articles of the association. The author deems that the articles of association can make the restrictions on the acquirement of the shareholder eligibility. In the third part, the acquirement procedures of the shareholder eligibility are researched. Firstly the author deems, because of the specificity of the share equity inheritance, it shall be stipulated that if the acceptance of the share equity inheritance is not presented in the stipulated period the right of the share equity inheritance will be deemed to be given up. And the restrictions shall be made on the deadline and methods for the acceptance of the share equity inheritance, and once the acceptance is made, the acceptance is irrevocable. Secondly, the author deems that the articles of association may make restrictions on the division of the inherited share equity, however the law may make stipulations on the time limit of the division of the inherited share equity, and the ancestor and the articles of association can not make random agreements on it. At last, the author deems that the rules similar to the decreased property managers system shall be brought into the share equity inheritance. The author also explores the choosing and the rights and obligations of the inherited share equity managers. In the fourth part, the prevention and remedy of the deadlock arising from the share equity inheritance is discussed. Firstly, on the change of the company model, when the inheritance leads to the one-person company, the company can be transformed to the derivative one-person company, when the inheritance leads to the shareholders increasing to over 50, the company can be transformed to the stock company, or the share equity can be transferred with consultation or the share equity entrusting system can be adapted, when there is no person to inherit, the company can be transformed to the company with joint share state-owned or the state-owned company. Secondly, if the share equity inheritance leads to the deadlock of the company, the repurchasing of the share equity of the shareholders in objections can be adapted. Next, the author deems that the provision of"Due to the share equity inheritance, the operation of the company is seriously affected"can be written as the reason for the dissolution of the company. At last, if there are objections on the share equity inheritance, it can be determined through the law suit, and the person in objection shall bear the burden of proof.