The Research On The Validity Of Defective Equity Transfer Contract

Investors’ contributions are the foundation for a corporation’s independent individuality and operation. If an investor doesn’t fulfill his obligation of contributions according to laws or the article of association, it will lead to capital deficit of the corporation, harm the interests of the company, the other shareholders and the creditors of the company. In recent years, the dispute of equity transfer triggered by capital contribution flaws has become very common. However, there is no specific provision on this question in the current laws. The validity of defective equity transfer contract is a vexed problem in academic world. In the trial of the dispute of defective equity transfer, the courts don’t have a uniform standard. A same case may have different judgments in different courts, which is not conducive to the stability of commercial legal relationship and undermine judicial authority. Therefore, it is meaningful for us to study the validity of defective equity transfer contract.In addition to the preface and conclusion, this paper is divided into four parts. The firth part puts forward the concept of defective equity. The defective contributed shareholder still has the qualification of shareholders and his equity can be transferred to others. The second part analysis four kinds of theories on the validity of defective equity transfer contract and puts forward different judicial attitude on this problem, thereby drawing a conclusion about this problem. This paper argues that the defective equity transfer contract will be invalid, revocable or effective according to the severity of defective contribution, the party’s subjective attitude, and so on. The third part mainly introduces the civil liability after defective equity transfer. The article argue the assignee and the assignor shall bear joint and several liability, but we need distinguish goodwill or not to make specific subdivision. The last part gives several suggestions on how to improve the legal system on defective equity transfer.