On The Expulsion Of Shareholder Of The Limited Liability Company

The limited liability company (LLC) plays a very important role in economy and people pay a lot attention to its internal conflicts of shareholders owing to the close corporation problem. The amended < The Company Law of the People's Republic of China >() in 2005 has made a great progress on the close corporation problem through perfecting and constructing legal systems, but it is still a pity for not constructing the expulsion of shareholder for LLC. The expulsion of shareholder is irreplaceable for solving the internal conflicts of shareholders and it is established and accepted by legislation and legal cases in many countries, but it is not arousing enough attention for lack of practices and research in our country. To meet the strong needs of the legal practice of our country, this paper intends to systematically study the expulsion of shareholder of LLC and based on this to put forward the legislative ideas and suggestions.This paper is composed of three parts including the introduction, the body and the conclusion.The introduction gives a brief presentation on the significance of the topic and the domestic current research situation and clears the research scope.There are four parts in the body.The first part set forth the theoretical foundations for rationality of the expulsion of shareholder. In the first place, based on the definitions before, this paper put forward the definition of expulsion of shareholder. The theory of"personal nature"and"company contract"give reasonable explanations for expulsion of shareholder and the theory of"capital nature"asks for institutional arrangements for the interest of creditors when constructing the legal system.The second part discusses the necessity of expulsion of shareholder in China. It gives convincing proof that the LLC and its shareholders and the courts are facing many difficulties for lack of expulsion of shareholder. At the same time, through comparing with the existing withdrawing legal systems we can find the irreplaceable value of expulsion of shareholder. So it is necessary for China to establish the expulsion of shareholder through amending < The Company Law >.The third part illustrates some ideas for establishing the expulsion of shareholder. The basic principle is balancing the"personal nature"and"capital nature"of LLC. The basic path is integrating the legal regulating and company governance. The expulsion of shareholder has innate disadvantages and it is necessary to clear the existing system and lacking system to overcome the disadvantages, and the lacking system should be the focus of system establishing.The fourth part is legislative suggestions for system establishing. As China has not established expulsion of shareholder, the legislative suggestions mainly use the experience of other countries for reference and combine these with the reality of our country. Based on the above legislative ideas, this part focuses on the general right of expulsion, the reasons and the procedures.The conclusion highlights the standpoint of this paper and sums up the argument structures.