The Succession Of Equity In Limited Liability Corporation

The existing Corporation Law in our country expressly stipulates equity transferbased on civil legal acts, but it fails to give an equally express on succession of equitywhich based on factual behavior. Article75of China’s Corporation Law is tooprincipled, lots of real issues are still existed, such as: What is the specific content of“shareholders’ qualification”? Is natural succession of equity valid? We can ultimatelysum the controversies up in3main points: First, What’s the object of inheritance right;Second, Can personal attributes of equity block succession of equity; Third, How tobalance the conflict between the personality and capital in limited liability company.This paper confirmed the nature of inheritance of equity, but the equity succession ofthe limited liability company requires some reasonable restrictions.This paper starting from the concept of “equity”“shareholder’s investment”“shareholders’ qualification”, made a clear explanation about the object ofinheritance right via analyzing detailed theory of equity succession. Equitysuccession equals to the inheritance of “shareholders’ qualification” in broadinterpretation. Next, this paper falls into two parts to proof the legitimacy aboutequity succession: From the perspective on the nature of equity, the nature of equityis a kind of special creditor’s rights, with the nature of property relations which arenot exclusively owned by the shareholders. Furthermore, equity is indispensable when the succession taking place, property right and status right are two abstractpower which are not independent rights of the equity as a whole. So the personalattributes of equity can’t block succession of equity. From the perspective on theconflict between company’s collaboration of human resource and equity succession,equity succession is not only related to the dead shareholders’ will, but also to theinterest of other shareholders and the whole company. For these reason, althoughcompany’s collaboration of human resource can’t shake the legitimacy of equitysuccession, further legislative consideration at the legislative level should be given.The last chapter of this paper presents some ideas aimed to improve equitysuccession system of the limited liability company which basis on the in-depthanalysis of legislation and judicial present situation.