Study Of Exercise And Protection Of Shareholder’s Pre-emptive Rights Of Limited Liability Company

The exploration of pre-emptive right regime plays a very important role inguiding practice, commodity trading relationship itself is the product of economic andsocial development, and pre-emptive rights trading system is a special system whichis related to the stake sale in general buying and selling. This system contains a lot ofcontent, shareholders’ pre-emptive rights regime of "Company Law" in1993hasborrowed from foreign legislative experience, but its theory is still not fully prepared.Other shareholders can exercise their pre-emptive right when the companyshareholders transfer their equity outwards, but the details about the exercise ofpre-emption is still blank. The revised "Company Law" in2004although did someimprovement contrast the "Company Law" in1993, its Article71did not change thecontent of Article72of "Company Law" in2005. The whole "Company Law" in2004still has theory deficiency on operability in practice.This article focuses on discussing several aspects about the exercise andprotection of shareholders’ pre-emptive rights. In addition to the introduction,summary and conclusion, the whole article includes four parts. Introduction clarifiesthe significance and the background of the article. On the base of affirming the valueof this paper,analyzes the research status of the shareholders’ pre-emptive rights,furthermore emphasizes the research value of the paper.This article introduce the subject of shareholders pre-emptive rights,The researchboundaries is the Article71, paragraph2of revised "Company Law" in2004, whichconcerns the shareholders has agreed to the transfer of ownership outwards, the actualinvestor and flaws investor.Analyzes whether the shareholders still has thepre-emptive rights after they made their intention to transfer the equity; then on thebase of distinguishing the actual investor and the flawed investor, further to analyzethe qualification of pre-emption the right and put forward author’s views.Based on the researcher of subjects, the conditions of exercising the pre-emptionright of shareholders mainly around "same conditions"on the revised "Company Law"in2004, article71st in the3rd paragraph to describe. Same condition is considered to be substantive conditions the exercise of the right of pre-emption of shareholders bysome scholars, It is enough to highlight the important position of shareholderpre-emption rights system. By listing and comparison of foreign and domesticlegislative provisions which is related to the same condition and, citing relevant casestudies to explore what kind of same conditions are more suitable for ChineseCompany Law.Next, the article discusses the controversial issue in judicial practice, which is theduration of exercising pre-emptive rights of shareholders. There is no specificprovisions about the duration,so the controversy about it has been a long time. Aboutthat, this article uses case analysis method to summarize whether the duration islegitimate when shareholders exercise pre-emptive rights, and then compare domesticand foreign legislation about the equity to elaborate the duration of equity transfer istoo short. Based on that this article sets legislative proposals about the duration mater.The final part of this article is about the legal consequences of the violation ofshareholders ’ pre-emption rights, what the effectiveness should be when transfercontracts between the shareholders and the third parties without the consent ofpriority shareholders? How to set the legal rules to protect the pre-emption rights ofshareholders is the most important issues. About that this article analyzes the variouspopular theories in the current practice with the cases and rationality analyzes thevarious popular theories, after that this article makes the conclusion that equitytransfer performance is valid but as violates the pre-emptive right lead to the contractcannot be performed.This article makes some immature conclusions about the transfer of the exerciseof pre-emptive rights issue based on the above options wishes that could be beneficialfor me, the academic and the practices.