Research On The Unified Equity Transfer And The Derivative Company

A limited liability company who transfers the possession of share maybe lead to the onlyone shareholder in the end. As for the contract which is due to the unified equity transfer,there are two theories-the effective theory and the invalid theory.The invalid theory proceedfrom protecting the transaction security and creditor’s equity, meanwhile, the effective theoryproceed from transaction efficiency and making the use of resources maximized. The judicialprecedent is always struggling with the two theories. But in the recent years, there is littlecontroversy about the effectiveness of the contract which is led to the only one shareholder.Especially since the new Companies Acts has recognized the legality of the limited liabilitycompany. Meanwhile, the effectiveness of this kind of contract has been recognized valid. Butthere is always one point need to be noticed, it is the derivative company, which the newCompanies Acts has not mentioned.This article starts with the derivative company which is formed because of the unifiedequity transfer, and then analyses the effectiveness of the contract which is formed of theunified equity transfer. In the essay, the effectiveness of this kind of contract is confirmed,and on the base of the consequence, the article probes into the derivative company which iscaused because of the unified equity transfer. This paper probes into the derivative companyfrom four aspect: First, estimate the contract which is formed because of the unified equitytransfer, and then elaborate the reason; Second, the author call for the the legislative status ofthe derivative company should be established, and additionally elaborate the jurisprudentialbasis of the derivative company’s existence. Third, the disadvantages od the legislative blank of thederivative company is to be stated; Fourth, the author make a proposal to regulate thederivative company. And it is better to be dentified and adopted.There are four parts in this thesis essay.Part one is the effectiveness of the contract which is formed because of the unified equitytransfer, in this part,the conception of the unified equity transfer is to be sure first; Then,theanalysis is to be elaborated form two aspects-the domestic relations and the external relationsof the limited liability company.Parts two is the analysis of the legislative status and the jurisprudential basis of thederivative company’s existence. In this part, the author calls for the legislative status of the derivative company should be established and states from the below aspects: the conflict ofthe capital system, the emergence of the double one-man company and the conflict of theminimum amount of capital invested which is ruled in the law. Then, the author states thejurisprudential basis of the derivative company’s existence from four principles.Part three is the statements regard to the disadvantages of the legislative blank about thederivative company. And the disadvantages comprise two points, they are the unbalance ofthe internal governance and the difficulties to use the existing articles of the law.In part four, there are some recommendations to rule the derivative company. Thissuggestions include the below aspects: First, the minimum amount of the registered capitaland the mode payment which has to be strictly determined; Second, the registration of theshares; Third, to establish an effective supervision mechanism; Fourth, to found the reservefund system; Fifth, to specificate the self-trading behaviour of the stockholder; Lastly, tocall for the responsibility that the shareholder should bear when he or she infringes theobligations.