On The Validity Of Equity Transfer Of The Limited Liability Company From The Perspective Of The Patterns Of Equity Changes

With the development of the economy, Limited Liability Company has suchcharacters, such as simple procedure for registration and limited liability of shareholders,it is widely welcomed by investors. Equity transfer, as a way which shareholders takeback the investment and quit the company, also be a inherent rights which the law givesthe shareholders. The current Company Law set up a special section about the equitytransfer issue of the Limited Liability Company, but it is not clear enough about theeffectiveness of the equity transfer, as a result, it has no unified law standard of theequity transfer dispute in the judicial practice. Therefore, I start from the patterns ofchanges in ownership, and focuses on the problem of the validity of share transfer,based on the existing view of the academia and proposed my view, that is Changes inequity should also follow the principle of distinguishing similar to the property rightchange, namely the equity transfer contract in force does not necessarily lead to changesin equity. Even if equity have not changed, the contract can also effect independently. Itargues that the potency of equity transfer can be divided into three stage. Firstly, equitytransfer produced legal effectiveness between the assignor and the assignee after signingthe equity transfer contract. Secondly, equity transfer produced legal effectivenessbetween the parties and the company after the change of shareholders list. Thirdly,equity transfer produced legal effectiveness between the assignee and the person exceptfor the shareholders after the company registration. Then I propose the conditions ofequity transfer, that is, the parties are legitimate, more than half of the othershareholders agree and give up the preemptive right, the contract effective and fulfill thecontract, register of shareholders changed. So as to provide theoretical basis for thejudicial practice.This main body of this article divides into four parts. Part one mainly introduce thetheoretical basis of equity transfer, including the definition, characteristics, principle ofthe equity transfer. I propose that the equity is a new kind of right. The transfer of shareshave such characteristics, sush as the creditor’s right and quasi real right nature,systematic, indivisibility and formal characteristics. At the same time, it analyzes therelationship between the equity changes and the equity transfer.Part two firstly discuss the different regulations on the way of the equity changes,this paper argues that we should follow the creditor’s rights formalism. Than discussthe effectiveness of ownership change registration, concluding that equity changes should follow the principle of distinguish, which means that the legal equity transfercontract can not lead to equity changes. Even if equity have not changed, the contractcan also effect independently.Part three mainly analyzes the effectiveness of share transfer contract, includingthe effectiveness range and the effective standard of the equity transfer contract. Itargues that equity transfer contract produced legal effectiveness between the parties only.At the same time, focus on the effectiveness of special equity transfer contract and putforward my view.Part four discuss the potency of equity transfer in detail, including the potencyrange and program of the potency of equity transfer. It argues that the potency of equitytransfer can be divided into three stage. Firstly, equity transfer produced legaleffectiveness between the assignor and the assignee after signing the equity transfercontract. Secondly, equity transfer produced legal effectiveness between the parties andthe company after the change of shareholders list. Thirdly, equity transfer producedlegal effectiveness between the assignee and the person except for the shareholders afterthe company registration. Then I propose the conditions of equity transfer, that is, theparties are legitimate, more than half of the other shareholders agree and give up thepreemptive right, the contract effective and fulfill the contract, register of shareholderschanged.