The Enforcement And Autonomy Of Share Transfer In Limited Liability Company

Giving a company autonomy becomes an important consideration when thelawmakers modified the corporation law in2005. The limited liability company havecharacters both based on shareholders and capital, the internal requirements give itgreater autonomy relative to the joint-stock company.Its share transfer also has itsown difference. The corporation law provides more freedom towards the sharetransfer of the limited liability company. The Company law allow the articles ofassociation of a company stipulate exceptions on share transfer; such stipulations shallprevail in respect of limited liability company shares transfer. But in practice, peoplehave different understanding of different conditions, with the result of a disputation ofthe border of company autonomy. There is a strong disagreement on identifying theeffectiveness of such provisions in practice. So the same case may have differentresults. In this paper, the author studys the mandatory provisions of the share transferin articles of association of the limited liability company, in order to provide anperspective when handling such disputes in judicial practice.In the introduction part, the author analyzes the research background, significance,research status, methods and the innovation of this paper. The problems of sharetransfer in limited liability corporations, which are caused by the civil juristic act,become widespread. The effectiveness of the articles of association which involves determining the mandatory provisions of the equity transfer used to be a difficultproblem troubling theorists and practitioners.In the second chapter, beginning from real cases, the writer summes up theproblem encountered in judicial practice, when the terms of the equity transfer existsdifferent situations in the articles of association of a limited liability company. In thesame time, the author provides the basis of the judgment and makes a brief analysis.In the third chapter, author describes the controversy about the effectiveness ofcompulsory share transfer provisions in limited liability company. Firstly, the writerdescribes world’s mainstream approaches of the problem, including the United States,Britain, Japan, Germany and other countries. Secondly, the chapter introduces themain point of controversy existing in domestic, elaborating three major theory fromthe perspective of both theory and practice. Finally, the author analyzes the variouscontroversial views.In the fourth chapter, the writer analyzes the nature of the equity transferprovisions in company law. Firstly, the author agrees that the article72(4) is mainlyaimed at the share transfer. Secondly, the author analyzes different nature of similarterms with the help of the real cases. At last, the author draws a conclusion thatcompanies should consider the true meaning of its shareholders when transferequities.In the fifth chapter,(it’s mainly analysis different cases under differentcircumstance which has already mentioned in the first chapter. According to the firstcase, a compulsory equity transfer clause in the company’s initial articles ofassociation is binding to all original shareholders. In the second case, the compulsoryequity transfer clause wasn’t made by all shareholders, so if shareholders want totransfer the equity, we must consider the true meaning of the shareholders. In the thirdcase, a compulsory equity transfer clause existed before the shareholders joined thecompany, we presumed the shareholders agreeing to the terms.