The Research About Issues Of Share Transfer Validity At A Limited Liability Company

Company system is the consequence of modern economic development, and its form of organization achieved through special market transactions in the status of independence, has been widely accepted by investors. Limited company is the latterly formed the company system, which condensed the wisdoms and creativities of German businessmen and commercial law scholars. Once it came out, it occupies rapidly in great market share with its advantages of small scale, low capital, and flexible decision-making as well as allocation and etc., and it has already become the world’s largest number of business models in most countries. With great numbers existed, Limited company spawned a series of systems supporting its establishment and improvement, and one of most important part is undoubtedly share transfer system. As the American scholar William Sen said,"Share transfer and the limited liability are equally important, they constitute the two basic characteristics of the modern corporation system". This is because that the options represent the interests of investors and are the investors in exchange for capital investment. It is the important method for investors to pursue the profit and earn wealth. Stockholders can realize the options in order to make reinvestment or consumption through share transfer, and the equity transferee will obtain the expected profit through capital input. Therefore, share transferred freely is the fundamental requirement for the interests of investors, but also an important way to achieve the profits of investors. However, the share transfer is not unlimited, and it is equipped for both the integration of capital and humanity, which determine mutual trust among the shareholders of the company is also important. Based on this, the share transfer of limited company should be appropriately restricted. In the consequences of the characteristics of freedom and restriction about share transfer, which resulted in the transfer effective issue, namely the equity transfer is in force, when takes effect, and the effect of transfer caused by the theory and the judicial practice issues etc. In recent years, with the development of Chinese market economy and influences by the national macro policy to encourage the development of small enterprises, limited company is extremely active in the market transactions. The turnover rate is increasingly frequent, which leads to the validity problematically. Due to the lack of legislation and theoretical basis of sufficient, it has become a thorny problem in the administration of justice. This paper embarks on limited company equity transfer concepts and principles, and focuses on the effectiveness of its equity transfer level analysis, the issues in the judicial practice, in violation of defective equity restrictions and transfer subject, eventually surrounding to the limited company equity transfer effect and gives some solutions. The paper is meant to inspire the scholars and give some good references for current legal practice of legislative and judicial organizations.