Research On Some Problems Of Shareholder 's Preemption Right

The Corporation Law of PRC set the system of shareholder’s preemptive right to limitthe transfer while protecting the nature of personal combination, which has beenamended in2005to replenish and perfect the system of shareholder’s preemptiveright. However, as a result of the restriction of social and historical conditions, and theinfluence of subjective and objective factors, as well as the lack of legislativetechnology, the related shareholder’s preemptive right is still not comprehensive anddetailed provisions, the lack of operability, lead to lots of disputes on equity transferof limited liability companies. So it is a important issue for the lawyers on civil andCorporation Law to face and have a deep study on how can the preemptive rightsystem to achieve equity limited liability company free transfer, how to protect thecompany’s nature of personal combination, and to ensure the healthy development ofa limited liability company. considering this, the author believed it is necessary to sortout, analysis and research the prominent problems related with shareholder’spreemptive right. This paper aims to discuss and study the disputes and issues fromthe perspective of the legislative intent, in reference of foreign legislations, comparedwith the theory of various theory point of view, in China’s "company law" the legalframework, hoping to put forward the related problem solutions and judicial opinions.This paper concludes from the introduction, body composition and the conclusion, inwhich the body composition is divided into four parts:The first part is an analysis of the legal nature of the priority right of shareholder.After a comparison and analysis on the nature of shareholder’s preemptive right withusing the relevant theory of academic circles, the author believed that theshareholder’s preemptive right should belong to the right of formation, expectant rightand a special rights against the third party.The second part focuses on the applicable scope of shareholder’s preemptive right.Firstly, the author analyzed that the transfer of shareholder’s preemptive right is onlyapplicable to external equity transfer case, which does not apply to equity transfercases. Secondly, from the subject of different position, the author exercised the bodyaccording to the agree rules for segmentation, made it clear that only dissentshareholders can apply preemption of shareholders. Finally, the author pointed outthat the dormant shareholders and defective shareholders can also apply preemption ofshareholders under certain conditions.The third part is the affirmation of the "equal condition" when shareholders exercisethe priority purchase right. This article exercised a three layers in-depth analysis onthe "equal condition" from the meaning, standard, content, mainly discussed the main compared content of “equal conditions". The author believed that the "equalcondition" shall refer to the external equity transfer contract "the same priceconditions", and put forward the proposals on how to deal with the problems in thenon contrast conditions "equal condition".The fourth part discussed the problems on the identification of the validity ofcontracts of outside equity transfer when shareholders’ preemptive rights beingviolated. The author adopted the "effective" view, the author believed that we shoulddifferentiate the behavior of equity transfer behavior and creditor’s rights, promote theview that the contract of outside equity transfer should be identified as a validcontract if it complied with the "contract law" provisions, even in violation of theshareholder’s preemption right, while putting forward some advices to perfect thesystem.