On The Limited Liability Company Share Transfer Restrictions

After investing the limited liablility company,Shareholders can'task the company to give back the capital and use the property of the company.So the shareholders transfer shares to protect their interest. .Howeverthe characters based on shareholders request to impose restrictions onthe transfer. Article 35 of the Company Law of the People Republic of Chinacarried out on July 1st in 1997 was about the restriction on thetransfer,but it was too simple.So lots of scholars and judges criticizedit. Article 72 of the new company law carried out on January 1st in 2006modified it. Is it perfect or not?This text will analysis it by the casestudy method,theoretical study method and comparative method. At last theauthor puts forward some opinions.This text is divided into five parts.ChapterⅠsays some basic konwledge.Fisrtly,the text explains themeaning of the limited liability company and the meaning of the transferof the shares of the limited liability company.Secondly,the textintroduces theories of the restriction on the transfer of the share ofthe limited liability company.The characters based on shareholders is thereason why the transfer of the shares of the limited liability companymust be restricted.The characters based on shareholders emphasize thatthe shareholders believe in each other,because the shareholders take partin the management of the company.The shareholders can use the restrictionsto exclude the unfaithful shareholders and protect theinterest.Besides,the restrictions must balance the benefits between theshareholders.The restrictions protect the staying shareholders,but theycan't prevent the transfer. Thirdly, the restrictions must be decidedby the shareholders,becauses of the differences of each company.Chapter Ⅱ is about the foreign law. The article introduces therestrictions of the company of the United States, Japan, France, Germany,Taiwanese regions,and summarizes them for the research on the new companylaw.Chapter Ⅲis about restrictions of the new Company Law of the PeopleRepublic of China.Firstly,the text criticizes the rule of the transferbetween shareholders.The transfer between shareholders can influnces thecharacters based on shareholders,so it must be restricted.The company lawallows the shareholders to decide the rule by the articles of theassociation.But in China,the association usual copies the company law.Secondly,the text criticizes the rule of the transfer betweenshareholders and non-shareholders. The first part is about approval.Thecondition of the approval must be improved and the process of purchasingthe share isn't functioned.The second part is about the pre-emptive rightto purchase share.The meaning of "to purchase share on equivalentcondition" is not clear and the process of pre-emptive right to purchaseshare isn't functioned.Chapter Ⅳ is about suggestions on legislation.It is aboutsuggestions on restrictions on the transfer of the share of the limitedliability company.It is the part of the text which solves the problem.Chapter Ⅴ is the conclusion.It generalizes contents and mainpoints.