The Study On Shareholder’s Preemptive Right System Of The Limited Liability Company

The system of shareholder’s preemptive right is a peculiar system of a limitedliability company, and the shareholder’s preemptive right is a peculiar right of thelimited liability company’s shareholders. But there are different views in practice,which lead to the application plights of the shareholders’ preemptive right system.The application plights bring us a series of reflection, and also arouse extensivediscussions from the scholars in the academic field. Some research achievementshave been obtained such as the partly discussion on the shareholders’ preemptiverights in chapter five of the draft version for the Companies Act judicialinterpretation (four). The present research and achievements are valuable materialsfor author’s studying and learning.Starting from the exploration of application plights of the shareholders’preemptive right system, this paper analyzes the fundamental reason contributing tothe application plights of this system. It has been found that there are a lot ofcontroversies about the nature of the shareholders’ preemptive right, which bringsthe basic effect on the application of the system. Therefore, it causes a multitude ofproblems such as the exercise of the right and the effectiveness belonging, etc. and itsends the legal relationship of the relative stakeholders into chaos. In addition, theexpanding system rules are important reasons contributing to the application plightsof this system. It is generally claimed equity transfer of the limited liability companyin Article72of Company Law, which involves the relevant rules of the exertion ofthe shareholders’ preemptive right. But the rules are not operable qualified such asthe scope of the right and the same conditions especially the way of determiningprice, etc. The expanding of the rules intensifies the difficulty of the application ofthe system.For the importance of the defining of the shareholder’s preemptive right’s legalnature, after analyzing of the cause of the application plights, the paper puts thefocus on the deep analysis on the legal basis of the system, and that is a further research from the value of the system and the legal nature of priority right ofshareholders. In terms of value system, it states original design intention of thesystem, the misunderstanding of the value of the system as well as the review of thevalue; In terms of legal nature, the paper introduces and summaries several kinds oftheories of the current controversy and comes up with my own point of view, whichis that the shareholder’s preemptive right is the right of claim.On the basis of analysis of defining the legal nature of shareholder’s preemptiveright, the paper analyses and discusses the essentials and legal effect of the right. Thelegal nature of the right has decisive impact on the essentials and legal effect, so theauthor has discussed the substantial essentials and formal essentials of the exerciseof shareholder’s preemptive right on the basis of above discussion, and thesubstantive essentials includes subject,range, price and so on. Formal essentialsmaterial includes the obligation of notification and the period of exercising. How tostipulate specific requirements has the important influence on playing a proper roleof the system. In the term of the legal effect of exercising this right, the paper hasmainly discussed the legal effect that the right has to different subjects and theinterests of the legal subject.All above is about the exercising of shareholder’s preemptive right under thesituation of transferring shareholders freely, and next the paper has discussedshareholder’s preemptive right under the situation of compulsory executionprocedure from the relevant laws and regulations, interest measure and the way ofdetermining price.Finally, on the basis of the above discussion, the paper comes up with the view ofimprovements of the system from the aspect of value concept and the perfection oflegislation technology.This paper discusses the shareholder’s preemptive right system of the limitedliability company according to certain logic and puts forward views for theperfection of the system. According to logical thought as what kind of theapplication plights, the reason contributing to the application plights, the analysis ofthe reasons, and putting forward the views, this article compares various theories,analyses their rationality, proposes the ideas and proves them. as a unique system in the limited liability company the shareholder’s preemptive right system plays a veryimportant role in the equity transfer process. The author tries to straighten out thevalue, the legal basis and function of the shareholder’s preemptive right systemthrough the argumentations of this paper.