The Research About Legal Issues Of The Defective Equity Transfer

The focus of controversy of such disputes caused by the defective equity transfer, which are mostly concentrated in the defective equity transfer when the changes and whether and how the transferee can exercise the right to revoke, and civil liability of defects of the equity after the transfer of how to bear related issues. The existing "Company Law" did not make specific provisions. On February16,2011," the Supreme People’s Court on the application of the People’s Republic of China Company Law provisions on Several Issues (Ⅲ)"specifically involved in the defects equity transfer accountability which made clear stipulations. However, it ignores some important issues, such as the articles of association and shareholder resolution can limit defective equity transfer, whether the effectiveness of restrictions in the transferee; when the defects of the shares after the equity transfer changes; whether the assignee can use the right to revoke the action and how to use the right, as well as civil liability after the defective equity transfer commitment. Therefore, the existing provisions is not enough to completely solve the defective transfer of equity, so that the different courts may make a different in practice and even diametrically opposed to the judgment of the same type of cases, affecting the unity and authority of the judicial.In addition to the introduction and conclusion, the article is divided into four parts.The first part is the analysis of the defective equity transfer. Firstly, defective equity sale doctrine disputes are straightened out. Secondly, in order to make simple assessment to the above doctrine controversy, and in the light of the enactment of legislation on the basis of the transfer of the major developed countries to defective equity, I agree with defective equity restrictions on the transfer, which based on the principle of rights and obligations consistent with the recognition of defects stake for sale on the basis of certain restrictions on transfer of defective equity through the company’s articles of association or shareholders’ meeting resolution way.The second part is the effectiveness of defective equity transfers. Firstly, it discusses the corresponding restriction of the articles of incorporation and the shareholder resolution on the transfer of defective equity, and to explore the application of the ex-rights program. Followed by the assignee does not bear a rigorous review obligation,"distinguished" to specifically determine the effectiveness of the equity transfer contract; On the actual changes on the equity, I think we should follow the company registration and business registration.The third part is the defective equity assignee has the right to revoke the condition. Firstly, the right that the bona fide assignee exercises revoke, which should be based on the degree of defective equity, and it also depends on the combined assignee transferee of equity by the defective capital to determine the extent. Secondly, it is necessary to the effective time of the defective transfer of equity as the starting point of the transferee shareholders to exercise the right to revoke the scheduled period, and reduced scheduled period of six months, and even three months.The fourth part is about civil liability. I believe that should be distinguished between the different subjects of rights:on the company’s civil liability should be assumed by the transferor and transferee for defective the share transfer are jointly and severally liable, including the scope of the duty to repay the funded responsibility and liability for damages, and it does not follow the limitation of actions. After the transfer, the civil liability of the creditors of the company assumed by the assignor and the assignee are jointly and severally liable to the limited scope of the duty to shareholders defects funded principal and over the interest on bank loans. Responsibility can learn from the notice procedure and the principle of pro rata repayment to be addressed. After defective equity transfer, the civil liability to the full amount invested shareholders is breach of contract, and the transferor should be solely responsible for the scope of liability for breach of contract by the articles of association or contracts. If there is no agreement, the parties should follow the relevant provisions of the Contract Law.