Research On Company-law Improvement By Provisions Of Company’s Articles Of Association Limiting Transferring Shares

The fourth paragraph of the seventy-second article of the Company law in our country only rules generally "if there are any other regulations about transferring shares in the company’s articles of association, we have to abide by these regulations". However, in judicial practice, there is a big controversy in validity of contract on transferring shares which infringes this term. The reason is that the legal basis this term should follow is not clear.The provisions that transferring shares is limited by the company’s articles of association are ruled by all the shareholders when the articles of association set up initially. But they are opposite to the term of "shareholders being free in transferring shares". Currently, the case basis is often treated as the same, and it is applied to the principled provisions of transferring shares in Co. LTD., without further discussiing ahout specific type of company.With the continuous development of social economy, in the actual process,there are a lot of conflicts between the company’s articles of association and the principle of the company law. The topic that the scholars often discuss presently is how to fix the conflicts and how to solve the problem that transferring shares is limited by the company’s articles of association.There are four aspects in this article.1. Discuss the basic theory of the company’s articles of association, especially how to define the articles of association of a company. There are two theories of contract and autonomy.This article focuses on discussing the contractual and the autonomy of the company’s articles of association, in order to define the nature of the company’s articles of association.2. Legislations and practices in all countries allow to limit transferring shares through the articles of association. In the second part of this article, I respectively introduce the provisions of how to limit transferring shares in the company law and the judicial practice in the United States, Germany, Japan and Britain. And I summarize practices of these countries to bring the reference for our country judicial practice.3. Based on researching the basis of the theory in the articles of association of a company, in the third part of this article, I analyze the feasibility of transferring shares limited by the company’s articles of association in enclosed co., LTD. First of all, I discuss the possibility of transferring shares limited by the company’s articles of association. Then, I analyze the legal basis. In the last, I discuss the system guarantee.4. On the basis of studies above, in the fourth part of this article, I summarize that the company rules should follow the principle of the articles of association, and illustrate the main point of transferring shares of the restriction in the articles of association of a company, which is that the company’s articles of association can not decide the transfer between shareholders equity, also can not ban foreign transfer of equity, but only can decide the outward transfer of equity. The company’s articles of association can exclude or limit the right of first refusal of the shareholders.