Study On The Shareholder Expulsion Of The Limited Liability Company

The limited liability company (LLC) plays a very important economic role in our country. The personal nature is his most important character. The shareholder expulsion is stipulated in Germany to solve the contradiction between shareholders which caused by the personal nature of LLC. The shareholder expulsion means the board of shareholders expels some shareholders through resolution when they encroach on the company interest seriously. The shareholder expulsion is stipulated in the Third Judicial Interpretation on Company Law to study a settlement mechanism for inner structural inconsistency of company, and safeguard the interests of company and innocent shareholders. The shareholder expulsion means the shareholder’s qualification is deprived passively by company because of his personal reasons.The deficiencies on the shareholder expulsion in the Third Judicial Interpretation on Company Law is the expulsion reasons are quite narrow, which results to disputes on the validity of shareholder expulsion clause in memorandum of company and lack of specific procedural provisions, which results to many disputes on the execution of expulsion clauses. In this paper, the mechanism of shareholder expulsion is built from the substantive side and procedural side on the basis of existing theory of our country by learning mature legislation experiences from developed countries.The paper consists of4parts besides preface and conclusion:Part one is mainly about analysis on the necessity and connotation of shareholder expulsion through established cases, discusses the necessity from theoretical value and system value of shareholder expulsion, and analyses the connotation of this system through comparing with the forfeiture, and studies on the shareholder expulsion institution in U.S.A and German and considers actual conditions in our country to research the settlement mechanism for inner structural inconsistency.Part two is mainly about requirements of shareholder expulsion, the writer analyses the reasons of expulsion selectively to avoid the power of shareholders is abused and the system of shareholder expulsion become invalid.Part three is mainly about notice period and voting formula of resolution of the board of shareholders.Part four is mainly about the legal consequences when shareholder expulsion took effect and the security for expelled shareholders when they faced defect of expulsion procedure and unfair transfer price.