Study On Equity External Transfer Sysytem Of Limited Liability Company

The system of The Company Law of the People's Republic of Chinahas been greatly improved since it was amended in2005, however, it isnot clear to specify when the external equity transfer contract of thelimited liability company will be signed and when it will come into force,how the Right of Preemption has impacted on the effect of transfer ofshares, as well as what role of a capital contribution certificate, register ofthe shareholders and the industrial and commercial registration in sharestransfer of regulation has played.About the question that when external equity transfer contract of thelimited liability company will be signed and when it will come into force,the author thinks it should be cleared in the contract signing process: firstsign and then notify. At the same time, legislation should be adopted to further make sure the rules of "equal condition","exercise period" andother requirements in the shareholders' Right of Preemption of TheCompany Law of the People's Republic of China. During the issue on theexercise of the preemptive right, we should, through legislation, clear thespecific meaning of "equal condition", and introduce "biddingmechanism"; in addition, about the unknown problem that the exerciseperiod of shareholders' preemptive rights, we can take French rules as areference to specify that the period of shareholder's preemption exerciseis30days, if necessary, extended to three months after the judicialdecision.For the shares transfer problems during external equity transfer, theauthor thinks first of all, according to the article32,33and74in ourcurrent The Company Law of the People's Republic of China, we canobtain, through analysis, that the change of a capital contributioncertificate or the register of shareholders has the effectiveness to provethe actual delivery of ownership, but it is only against the company, notthe third party. While the industrial and commercial registration can notonly against the company, but also all the third party besides the company.The effect strength of the three is: the industrial and commercial register,register of the shareholders and then the capital contribution certificate.Secondly, we should further clarify the effect of the capital contributioncertificate, register of the shareholders and the industrial and commercial registration on shares transfer in the legislation, especially clear thecombat effectiveness that the capital contribution certificate and changesof the register of shareholders have on the company.