Research On The System Of Shareholder’s Expulsion Of The Limited Liability Company

Based on strong demand of the judicial practice in China, company law interpretation "(three)" promulgated, which coheres many wise of the law, the judiciary and the legislative circle, will introduce the legal category to the expulsion of shareholder Limited Liability Company in the first time and has injected new blood to solve corporate deadlock. When shareholders of a limited liability company in violation of obligations or the change of personal factors become to crunch the trust between shareholders and seriously damage the common interests of the company and shareholders, the expulsion of shareholder system provides a favorable relief measure for handling internal contradictions. However, the new judicial interpretation expose many legal loopholes such as the expulsion cause of too narrow, the lack of maneuverability of the delisting procedure, the expulsion consequences of too simple, which cannot provide a complete legal system to the plight of the company and other shareholders. Therefore, to the internal structure of Limited Liability Company system expulsion of shareholder should have a clear recognition. The expulsion of shareholder system of our country in details still needs further improvement.Based on this, from the multi angle comprehensive analysis of the basic structure of expulsion of shareholder of the Limited Liability Company, the paper is divided into six parts for the discussion:The first part is the theory basis of the shareholder expulsion system. The shareholder expulsion system of the Limited Liability Company does not violate the company "assets credit idea", also is not the tool of small and medium-sized shareholders together over major shareholders, which uses the cause of expulsion and the procedure design of expulsion strictly to rule out the possibility that large shareholders abuse the expulsion system. Determining the expulsion of shareholder system conforms to company assets principle, consistent with the theory of balance of interests and meets the people combination theory. The Expulsion of shareholder system of Limited Liability Company is not only strictly applicable to the above2common limited liability company, also applies to the two cases:the limited liability company of only2Shareholders and dormant shareholders.The second part is the application scope of the expulsion of shareholder. By comparing the relevant foreign institutional provisions on the subject of the expulsion, focusing on analysis the application scope of the expulsion which are identified by German legislation and theorists. German is in the type of legislative model "enumerate+generalize", formulate that according to the law and articles of agreement to removal, including shareholders own behavior and personal reasons two major grounds. Drawing on the basis of German law, propose the application scope of the expulsion of shareholder can be divided into legal reasons and convention grounds. Legal reasons includes failure to fulfill funding obligations, withdrawn capital, abuse of rights, the company’s criminal behavior and so on, convention grounds includes health status and property status of shareholders and shareholders lose specific qualifications and so on.The third part is the program of the expulsion of shareholder. In the part of the program of the expulsion, internal remedies should be exhausted to start delisting procedures; to respect for the autonomy of choice, propose the company enjoy the right of the expulsion of shareholder, and select the final effectiveness capital program of the shareholders’ meeting by majority decision; to avoid alienation of the majority of capital deficiencies in the system, formulate the proposed to be removed shareholder should follow the avoid voting rules, and any shareholder is entitled to only a maximum of20%of the voting rights.The forth part is the effect of the expulsion of shareholder. In order to balance the interests of all parties, removed shareholders bear the breach of contract and tort liability to the company and other shareholder, and the joint and several liability to creditors. At the same time, in order to protect the interests of removed shareholders, they shall have the right to obtain the right of repurchase shares, and they are given its objection relief way.The fifth part is the legislative advice to improve the expulsion of shareholder of Limited Liability Company in our country. Based on the above analysis, in order to solve the lack of legislation which leads to practice and judicial practice difficulties, China has necessity to expulsion of the Limited Liability Company in legislation, including laws and regulations and the articles of association of design of the cause of expulsion, the legitimate exercise of the delisting procedure, the legal liability and the disposal of equity of removed shareholders.