Study On The Legislative Intent And Constitution Of Shareholder’s Preemptive Rights In Limited Liability Company

Chinese economy has been developed rapidly in recently years, and domestic market has also been opened deeply to the worldwide economic market. As one of the most important market participants, Limited Liability Company has been playing a significant role in Chinese market economy. The share transfer between shareholders, between shareholder and a third party, has become more and more frequent, therefore, it also has inevitably brought relevant disputes. The matter concerned about shareholder’s preemptive right is one of the problems we may meet. Since the first edition of Company Law has been enacted in China, shareholder’s preemptive right in Limited Liability Company is contained in each edition of Company Law. Although the Company Law enacted in2005has added some specific clauses on the foundation of the Company Law enacted in1993, the development of this regulation is not matching the development of Chinese economy. According to the existing Company Law, the present regulation has inherent defects, such as lack of definition of time limit to exercising the right, the legal force of contract on infringement of shareholder’s preemptive right, etc.This article consists of four parts, beginning with the classic case happened in Shanghai. Then, it introduces the concept and property of preemptive right, how to exercise this right and affirmation of infringement of shareholder’s preemptive right. Finally, this article mentions the thoughts and suggestions of perfecting this regulation in the future.The first part is to raise the question, briefly introduces the classic case, puts forward the focus of dispute in this case and proposes the main points that the following parts may concern.The second part is the brief introduction of shareholder’s preemptive right. It shall introduce the concept and property of preemptive right, analyze the legislative intention of this right, summarize and conclude the present legal condition of this right in other countries and regions. Finally, it shall put forward some suggestions on development tendency.The third part is the exercise of this right. It shall deeply analyze the body, object, material condition and procedure condition, then do study on some difficult questions arising from the classic case and decide whether the judgment is legal.The forth part is the thoughts and suggestions of perfecting this regulation. According to the proceeding parts in this article, this regulation has some inherent defects. Four suggestions have been brought up to perfect this regulation.