Effectiveness And Accountability Of Defective Transfer Of Shares

Although the strict invest liability to shareholders and the company have been ruled in national legislation, in practice , defective capital contribution is still quite common behavior. The question of transfer of defective stock right arising from defective capital contribution and the relevant issues are not clearly ordered by the existing law, and the theory of the Company Law are lack of systematic discussion of the question. Based on the general sense of the limited liability company, this paper trys to discuss the question of transfer of defective stock right arising from defective capital contribution of shareholders.This paper is divided into five parts.First, the issue is brought up. This part mainly draw two issues out through a case, ie the validity of the transfer of defective stock right and how to undertake the liability after the transfer. Then the different theories and practices against these two questions are introduced, and I put forward my own point.Second, the defective stock rights are mainly caused by defective capital contribution. The defective capital contribution, which is the foundation of the transfer of defective stock rights, directly leads to the formation of defective stock rights. According to the different classification criteria, defective capital contribution can be divided into not performing the liability and improperly performing the liability, the un-performing liability before or after the corporation establishment, and the defective contribution of cash or matter.Third, whether the defective stock right can be transfered. By analyzing the link and difference of the three concepts, ie defective capital contribution, shareholders equity and stock rights, the part concludes that capital contribution and shareholders equity are not eligible one-to-one relationship, that the shareholders still have shareholders equity and stock right, that because the transfer of stock right is the transfer of the shareholders equity in fact, the defective stock right still can be transferred.Fourth, the transfer of the defective stock right is valid or invalid. First of all, the author analyzes two theories, ie Validity and Revocation. The author believes that the validity of the transfer of the defective stock right should be specifically analyzed according to concrete problems. If the transferor did not inform the transferee the defect of the stock right, and the transferee did not know or should not have known the fact, the transferee can claim revocation of the contract on the ground of fraudulence; If the transferor inform the transferee the defect of the stock right, or the transferee did know or should have known that, the transfer contract of the defective stock right is effective. Then, the author argued the validity of the transfer contract of the defective stock right in detail. When the transfer contract can be revoked, the author analyzes the fraudulent burden of proof, how to perform revocation authority, and the legal consequence after performing revocation authority. At last, some circumstances about the valid transfer contract of the defective stock right are introduced.Fifth, how to bear the burden after the transfer of the defective stock right. This part mainly solute whom should the burden be bored to, who should bear the burden, and how the burden should be bored. The author respectively Analyzes the general rules that the shareholders of defective capital contribution bear burden to the shareholders performing capital contribution, to the company, and to the creditors, and the special rules after the transfer of the defective stock right. After the transfer of the defective stock right, the transferor still bear the burden to shareholders performing capital contribution, which will not transfer with the transfer of shares. And the question, ie the burden of the plenary payment for the difference to the company and the accountability to the creditors, is mainly the issue whether the transferee should take responsibility. The author insists that whether the transferee was in good faith at this time should be distincted. If the transferee was in good faith, and did not know or should not have known the defect of the transfer shares, the transferee did not bear the burden of the plenary payment for the difference, but the transferor and the other shareholders when the corporation was founded should undertake joint liability; If the transferee did know or should have known the defect of the transfer shares, and did not pay reasonable consideration, ie the transferor conspired with the transferee to keep away from the law, which means the transferee was not in good faith at this time, so the transferor and the transferee should bear joint liability, and the other shareholders when the corporation was founded should undertake joint liability. Finally, the author analyzes the relevant provisions of limitation of time which was adapted when the shareholders performing capital contribution, the company and its creditors followed up the liability.