A Study On Shareholders’ Exercise Of Preemption In A Limited Company

Shareholders’ preemptive rights regime is an important one in a company law thatconcerns the rights of a limited liability company’s shareholders. It maintains asystem for the company’s development direction and the control of the business modeland co-shareholder limited liability company. However, the contract in a way,violated the principles of freedom and equality in the commercial trading activities, inlaw but also against the fair value of the target. Therefore, preemptive rights ofshareholders to exercise reasonable standard conditions, and it is a must to make theconditions specific, clearly oriented, with a strong operational imperative, the transferof the rights of foreign shareholders in the transfer of appropriate constraints, in orderto achieve equity with the company’s other shareholders to sell balancing the interestsof both shareholders. Thus, the exercise of preemptive rights to shareholders details ofthe conditions and detailed specifications, is particularly important.In this paper, to focus on the conditions for the exercise of preemptive, combinedwith the appellant and appellee Zhang A and company such as Lion and Dragon, thethird trial NPC Sword Beach Power Company shareholders preemptive rights disputes,the focus of the case from the controversial analysis, combined with priority basictheory purchase rights to exercise preemptive rights of the individual steps has for theorder, the first step in the analysis of the Equity Transfer Agreement to sell third partyshareholders and the company agreed to analyze and explain the reasons as aprerequisite; then a second step on the equity transfer conditions, the shareholderspreemptive right of first refusal under the same conditions, the same conditions wereanalyzed from the doctrine and draw their classification and identification of specificcontent, while an analysis of whether the other shareholders may exercise the right offirst refusal part draw a negative conclusion; other shareholders to inform thecompany of the Transfer, the obligation to inform the shareholders of the analysis andnotification content; while the third step, all the conditions of success, shareholdersexercise preemptive rights, consider exercising preemptive rights issue toshareholders exercise period, extraterritorial legislation combined experience,suggestions to improve shareholders’ preemptive rights exercise period for our system, the performance period for the preemptive rights to develop appropriate performanceperiod.The final part analyzes the Articles of Association and Protection of the article tolimit preemptive rights of the shareholders; then analyzes the standardization ofpreemptive exercise program, learn extraterritorial legislative experience, about theexercise of specific processes; secondly, to agree with the preemptive right to be incontrast, analysis of the drawbacks of consent regime, drawn delete agree to the terms,retain and improve shareholders’ preemptive rights. Then about how to improve thepre-emption right, considering the performance of the forms and methods of solvingthe notification obligation, to buy the system and establish the concept of designatedtransferee company to buy back system in three aspects. Angle before engaging inprotected, consider the shareholders preemptive rights for institutional safeguards,better protection of preemptive rights, the right to remedy violations and reduce theuse of the judicial process, standardized and detailed exercise program from the sameconditions, to achieve both combined with a unified, so that the shareholders pre-emption system to better carry out its function.