A Theory Of The Balance Of Interests In LLC Equity Inheritance

Started from a case, this essay does some reasoning analysis and practical thinking on the issue of equity transfer of LLC(limited Liability Corporation). Holding that the conflict on the issue originates from lacking of definition, the author holds that the concept of stock right can be replaced by "rights and interests of stockholders", including property interests-stock right, and status rights-qualification of stock holders. Both of them come from the contribution to the corporation, come into being together, disappear together and coexist on each other.The paper consists of five parts, over16000words.As property interests, stock rights belong to the object of inheritance according to the law of inheritance. After the predecessor dies, the inheritor can surely inherit. However, as the status right, the qualification of stockholder can not be inherited, for it is against the requirement for the object of inheritance.There is another reason. The free inheritance of stock right adhere to the basic spirit of corporation law—freedom, however the easy gain of the qualification of stock holder is against the spirit of corporation law—order and stability, which is also bad for the character of people grouping and managing structure of LLC.Hence, as to the issue of inheritance between stockholders in LLM, the interests between the inheritor and corporation should be fully considered, in order to reach a balance and win-win. In a result, we should first admit inheritor’s legal inheritance of stock rights; Secondly whether the inheritor can gain the qualification should be agreed upon by half of other stockholders beforehand to reach the balance of interests.Besides, because of the importance of statutes of LLC, the author holds that the frame of statutes should be valued. At the very start of corporation foundation, the statute should be framed to regulate the issue of inheritance of stockholders’interests and rights in the future.