Research On Possession In Good Faith Of Limited Company’s Stock

There were lots of debates in academia about the fact that as a civillaw system, if the possession in good faith which aims to protect the thirdperson can be applied to the limited company’s share in the field ofcommercial law. Facing the need in reality, the Supreme People’s Courtcame up with Explanation Ⅲ of Company Law, in which item26and item28specified that nominal share holders disposal with no rights and oneshare with two selling shall refer to the item106of the Property Law. Nowthat the Explanation Ⅲ of Company Lawadmitted the necessity of theapplication of the possession in good faith to the share, if the third typicalscenarios of possession in good faith which is remote holder’s flaw in thecontinue share’s trade can be applied? Which is known to all that stockright as a compound right owns different attributes from common property,stake is not just a property right but also a member right, is not only self-interested but also the total of usufruct rights. Company’s sock right owns avariety of factors and characterizations based on equity method, what’smore Equity market transactions are very narrow and businessmencompared to the average consumer have a greater ability to detect, sum ofall factors can make a simple reference to the applicable share of propertyacquired in good faith the provisions of the system is in doubt. The paperalso will share the special properties different from as the main line todiscuss possession in good faith application of equity-related issues.This paper is divided into three parts which are introduction, body andconclusion:First introduced in the introduction of equity apply in good faith system must answer a few questions and to elicit the main discussingobjects.The body part is divided into three chapters.Chapter one sought to explore the full nature of equity to lay thetheoretical basis for further study. First of all, with the help of Duguit’s ideaof solidarity as the window, through the analysis to come to the conclusionis that the fundamentals of equity’s nature is its property attribute, but thepremise of the exercise of property rights is its non-property attributes. It isprecisely because of the property attribute, there is bound to be a situationthat the name obligee is different from the real oblige as well as in realitythere is necessity in equity transactions for the protection of bona fide thirdparty. However, based on equity and property differences, it’s necessary todiscuss if there is real possibility to set up the equity acquired in good faithand if the existing legal provisions could provide enough system supply.Chapter two follows chapter one, Sought for the existing relevantlegal provisions about shares acquired in good faith in order for furtherdiscussion in the view of resources of law. The first need to explore is thechanges in ownership patterns of China’s company law. Now that theArticle33, paragraph2of Company Law couldn’t draw a clear answer onthe change of the shareholding pattern, this paper tried to interpret in theinferior side of law, the theoretical analysis for equity as well as learn thebasis of comparative law, got the conclusion in the real but non-naturallevel should be idealism in the change of the shareholding pattern ofChina’s company law. Meaning of idealism movements patterns andregister’s against force of law, making the registration counter forregistration under the doctrine of the difficulties faced by a lack ofrepresentation and the internal law in the same rank, registered against theforce of law made in good faith with the plight of the application of thesystem. By drawing on the German maritime law on marine vessels, thispaper argues for the specific rights, by means of the effectiveness ofexisting regulations on registration, based on important consideration to protect the transaction security, interpretation of law by a certain method tosolve the dilemma. Company law’s against effect on the equity businessregistration are also facing difficulties in the property law. In the same way,based on the special nature of equity market, this paper came to theconclusion is that the phenomenon sell to two sides, or the name obligeedispose without authority, or there is defect in the first trade of continuoustrading transaction should be applicable to the system of shares acquired ingood faith. What’s more,.it should be applied more strictly.Based on the first two chapters’ exposition, the third chapter focusedon the related issues of the system of shares acquired in good faith. First,the equity business registration already faced a lack of representation in theplight of China’s relevant law and regulations regarding the lack of theparty’s role in the equity transfer procedures, therefore it’s prone the tosteal the stock in the way of selling to the third party. So changes inregistration procedures should be strengthened somewhat. Chapter IIIdiscusses the composing conditions of equity acquired in good faith, whichneed to be particularly considered is the exclusion of the third party’s grossnegligence. It’s needless to say the positive result if the third party’s claimwas supported, the reverse result is also focused by this article. Specifically,if the third party’s bona fide’s claim couldn’t be supported in the externaltrade, the stock couldn’t be transferred to the winners automatically. On thecontrary, it should be judged with the standard of universitas iuris and see ifthe other stockholders knew the untitled disposal deed when the trade isdoing.The conclusion part summarized the whole essay.