The Analysis On A Case Of Equity Transfer Dispute Between Yao And Zhou

The limited liability company,with its unique charm and strong vitality,has beenrapidly popular all over the world,and gradually become one of the most importanttypes of enterprise organization forms like the joint stock company since itsinception.Based on this consideration, The paragraph2of article71of China’s"company law" provisdes for the system of shareholder’s preemption. As thepreemptive right system in legislation is too simple and abstract, the exercise ofshareholder’s preemptive right system generated much controversy and doubt in thecomplex practice of the company law. In the stock transfer dispute case of Zhou v.Yao Jia, it reflects many disputes in the exercise of shareholder’s preemptive rightsystem, including when the shareholders exercising the right of preemption,Whetherthe contract of assignment between the shareholders and non shareholder is effectiveand how to identify the "equal conditions". In determining the validity of the transfercontract, we conclude that the transfer contract of shareholders and non shareholdersis a valid contract, when the shareholders exercises the right of preemption ofshareholders,through the analysis of existing theory and the trial results of relevantlegislation and similar cases. In the identification of "equal conditions", throughcomparative analysis of the international and domestic standards existing theory, weconclude that to determine the standard "equal conditions", we use absolute equaltheory under normal circumstances, we use the relatively equal theory when there arespecial circumstances. In addition, the provisions are too simple and lack ofmanipulation that the shareholders do not how to exercise the preemptive right to dealwith the enforced sale of shares or state-owned shares transfer. Therefore, it isextremely necessary to consummate the legislation of preemptive right by refining theexercise rules, increasing its operability, and resolving the legal dilemma.