The Transferees’ Benefit Protection Under The External Share Transfer Of Limited Liability Company

As our country’s economic development and constant improvement in themarket economic structure, the share transfer of limited liability company in thepresent society has become increasingly active and frequent. The hand, transferringshareholders is in the search for all possible trading opportunities, in order to obtainthe maximization of the value of the equity; the other hand, the third one who want toget the potential value of the investment, is seeking to purchase target shares, in orderto be able to go to the company, and enjoy shareholding interests. However, becauseour country’s share transfer system is still not perfect, so the dispute occur frequently.Although the72article of Company Law grants the transferring Party and the otherthe interests of the shareholders the relief, but for the protection of interests ofrecipient, the law did not give a definite provision.The center of this article is how to protect the interests of the share transferee.The article analyzes and studies the more probable risk of shares sold, such as thecircumstances of the repeating sale of the same stock, the flaw of share and the flawof enforcing right of prior buy. And for the potential loss of the legal risks, the articleprovides the practical approaches and recommendations. Firstly, writer discusses theneed of protect the interests of transferee through both a theoretical and a practicalaspect. The writer analyzes the value of protecting transferee in the Company Lawand Commercial Law, and stresses that we cannot always be biased of the protectionof the interests of the other shareholders. Many other values and interests should alsobe given to pay attention, for example the trust interests the people, the safety oftransaction, and so on. Secondly, discussing the repeating sale of the same stock inthe reality, making an analysis of the validity of contracts in the share transfer and theexistence of conflicts of interest, and the further giving the measures that how toprotect the interests of transferee. Thirdly, under the circumstance where the share isdefective, the text analyzes the external transfer. The circumstance includes thedefection of capital contribution and the pledge of share. By analyzing the validity ofcontracts and conflicts of interest, the text gives the measures of protecting the interests of transferee. Finally, writer discusses the situation when there is the flaw ofenforcing the priority right to purchasing share, and gives some suggestion ofprotecting the transferee, such as making some restraint to the exercise of the priorityright to purchasing share, introducing the competitive bidding system to protecttransferee, and so on. In short, whether it is the missing of moral integrity or the lackthe legal system, the transferee experiences the great risk. Therefore, we must paysufficient attention to protect the transferees’ interest.