Study On The Legal Problems Of Preemptive Right Of Shareholders

In order to safeguard the expectation interests of shareholders and maintain the peoplecombination of the Limited Liability Company (LLC),“Company Law” exclusively providesthe system of shareholders’ right of first refusal. The system, to some extent, contributes to theinterests of the transfer of shareholders, other shareholders as well as non-shareholders to athird person, but the provision of the law to this system is not perfect, for example, whetherthe shareholders who agree to transfer equity can exercise the right of first refusal, how todetermine the equal conditions in equity transfer, whether the shareholders’ right of firstrefusal can be partially exercised. How to reasonably coordinate with the conflict in thesystem of shareholders’ right of first refusal between “Company Law” and “Auction Law”,infringing the effectiveness and the later relief of the equity transfer contract of shareholders’right of first refusal, and the legal liability that advocates to purchase the right of first refusaland then gives up, etc, which leads to different judgments in the same case during the judicialpractice. Therefore, the system needs to improve both in theory and legislation.Part One, the legal nature of shareholders’ right of first refusal. To evaluate and analyzethe legal nature of shareholders’ right of first refusal from an objective point of view,aiming at analyzing the opinion that shareholders’ right of first refusal refers to the right ofexpectation, the right of claim as well as the right of formation existing in academic world.and then comes to the author’s points of view. It is believed that shareholders’ right of firstrefusal cannot be simply defined as a kind of legal nature. It can be defined different naturesaccording to different classification standards.Part Two, the exercise of shareholders’ right of first refusal. Through the analysis of theArticle72in “Company Law”, we can know the subjective conditions, the equal conditions aswell as the term conditions of shareholders’ right of first refusal to exercise. In the subjectiveconditions, we have a focus analysis on whether the shareholders who agree to transfer canexercise this right. There into, the equal conditions of shareholders’ right of first refusal toexercise are the focus of this part. The article analyzes one by one from the system value,connotation and the determining standard under the equal conditions, coming into aconclusion that the equal conditions of the equity transfer shall include the price, quantity,delivery time and manner of the price as well as the liability for breach of contract. In the meantime, the author analyzes the term conditions as well as the start time of theshareholders’ right of first refusal to exercise, and then we think that the term should be in amonth starting from the date of receiving the notice from the shareholders’ right of firstrefusal. At last, the author introduces and analyzes the exercise of shareholders’ right of firstrefusal under the special circumstance as well as the circumstance of the compulsory auction,then analyzes the conflict between “Company Law” and “Auction Law” in this system andputs forward some suggestions and methods to solve this conflict. At the same time the articlealso introduces the circumstance of the company’s articles of association to regulate theshareholders’ right of first refusal, and analyzes mainly from the company’s articles ofassociation to exclude, limit and optimize shareholders’ right of first refusal.Part Three, the relief of shareholders’ right of first refusal. In view of infringing theargument of the effectiveness of the equity transfer contract of the shareholders’ right of firstrefusal existing in academic world, the author conducts an analysis and draws a conclusionthat the contract should be valid. Finally, aiming at the parties suing for validity of thecontract in judicial practice, the court only decides the contract effectiveness but not to solvethe problem of the equity transfer contract between the transfer of shareholders and othershareholders and then put forward the solutions.Part Four, the legal liability of claiming the right of first refusal and then giving up thisright. It is believed that after other shareholders claim the right of first refusal and before theregistration of the change of the law, the equity transfer contract should be valid. And thus itcan be concluded that other shareholders should bear the corresponding liability for breach ofcontract after giving up this right.