A Limited Liability Company Shareholders Right Of First Refusal

Limited company which has both co-authored and co-owned features is one of the mainforms of modern enterprise. Co-authored feature determined the basis of limited company whichis the confidence of shareholders and cooperation between this special relationship. With themarket economy development, in order to meet the needs of economic development, limitedliability company equity transactions are increasing and the disputes triggered more frequent, inorder to maintain limited company’s stability, promote the development of the company, the lawestablished the shareholder’s pre-emptive rights. However, the provisions of pre-emptive rights ofshareholders of "Company Law" are very vague and are difficult to operate in practical. Thoseprovisions make more disputes in external transfer of shares and are not conducive to the stabilityand operation of the limited company. Therefore, it is essential to research the shareholderspre-emptive rights.In addition to this introduction and epilogue, the all text has four parts.The first part of this paper is the overview of pre-emptive rights of shareholders. At thebeginning of this part, we have a discussion of the concept of pre-emptive rights of shareholdersand analyze the legal nature of this right then. Combined with the current law, I proposed the viewwhich I agreed. In my opinion, the pre-emptive rights of shareholders are legal right, forming rightand contingent right which have personal specialization.The second part of this paper is the legislative intent of pre-emptive rights for shareholders.This section elaborates by two major ways. At one hand, I illustrated my ideal by the way ofmaintaining the co-author feature of liability company. At the other hand, I illustrated my paper bythe way of the relationship of the autonomy of private Law and the state compulsory.The third part is the exercise conditions of the pre-emptive rights of shareholders. I analyzedthe clause72of the "Company Law" in order to illustrate the four aspects of the exercise ofpre-emptive rights of shareholders, including: prerequisites, the main condition, the real conditions,process conditions. Among them, the real conditions(equal conditions) is the focus of this sectionis the focal point of this paper. This paper was discussed mainly from the means of sameconditions, recognition criteria and identify criteria.The fourth part is about the special problems of exercise of shareholders pre-emptive rights. Including four parts: can parts of the shareholders pre-emptive rights be exercised, othershareholders’ pre-emptive rights when the court forced the transfer of ownership, othershareholders’ pre-emptive rights when some existing shareholders transfering their ownership andthe effect of the infringement of shareholders’ pre-emptive rights. Facing the problem of parts ofthe exercise of pre-emptive rights for shareholders, I propose my own ideal with the basement ofthe analysis of the two major theorists; Facing the problem of other shareholders’ pre-emptiverights when the court forced the transfer of ownership, I described several methods which be usedby currently and put forward ideal which I believed to be right. Facing the problem of the exerciseof shareholders’ pre-emptive rights when existing shareholders transferring their shares, Idiscussed mainly from the perspective of private law. Lastly, I illustrated the effect of theinfringement of shareholders’ pre-emptive rights combined with related civil law.