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The Exercise Elements Of The Shareholder’s Preemptive Right Of The Limited Liability Company

Posted on:2013-04-22Degree:MasterType:Thesis
Country:ChinaCandidate:H R XingFull Text:PDF
GTID:2246330392961426Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
The limited liability company combines the character of personal joint andcharacter of capitals joint, the legal regulation about the limited liability company shouldfully consider these features. The outside stock right transfer system is one of the mosttypical problems.The outside stock right transfer in our Company Law applies the “approval andpreemption” mode. However, the approval regulation has no any material function, andonly preserve the preemption regulation would not affect the protection of peoplecombination.The precondition of the exercising of the preemptive right is the shareholdertransfer stock right to a third party. Generally, this kind of transfer can be presumed as aproper transfer. However, if the transfer are made by special shareholders or caused bysome specific reasons, it needs to be treated differently.There are different legislation patterns about the subject of the preemptive right. Inour Company Law, the subject of the preemptive right is the shareholder. To avoid thelogic contradiction, it should be limited to the shareholders who vote against the stocktransfer. Thereafter, whether the falsely registered shareholder, the defective contribution shareholder, the dormant partners can exercise the preemptive right, it should be analysesdifferently.The “same condition” is the core request for the preemptive right, which can beanalyses in2aspects:“the transfer condition” and “the same”. The transfer conditions aremore than quantity and price, any condition which can materially influence the party’schoice can be deemed as “transfer condition”. If the consideration is just money, theshareholder has to completely meet the condition, if the consideration involves conditionsmore than money, the “same condition” should be judged in a relative way. Specialrelationship between the transferor and the transferee should not be considered whenexercising preemptive right, and it won’t harm the third party’s interests. When thetransfer condition contains specific payment, the shareholder could propose an evaluation.Although the evaluation can’t precisely show the value of the specific payment, it is betterthan stop the preemptive right.Inform the other shareholders about the stock right transfer is the start of thepreemptive right. The transferor should notice the other shareholders about the stock righttransfer after the contract is signed and the condition is clear. The length of the preemptionstarts only after the shareholders receive the notice. The duration of agreement, coercivebuying and the duration the preemption should be merged. The length of the durationshould consider both the efficiency and stability. As a special right of formation, the rightwould demise when the duration passed. The shareholder could doubt the price and ask tomake an evaluation. After the shareholders offer to exercise the preemption, the transfereecannot make a new offer. To solve the problem that the individual shareholder is lack ofcurrency, some new contents of the preemption should be import.One of the highlights of the2005Company Law is the permit of the flexibleregulation of corporate charters on the preemptive right. The legal regulation is just thereference for the company. The philosophy of company law should be the basis to judgethe effect of the corporate charters. Joint of person is just an estimate of legislation, however, the highly combination of person is not a common character for all the limitedliability companies. If the company itself does not prefer the joint of person, it’s notnecessary to force the company follow the joint of person reason. So, the corporatecharters can cancel the preemptive right if all the shareholders agreed.
Keywords/Search Tags:Preemptive Right, Exercise Elements, Same Condition, Personal Joint
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