Study On The Issues Of The Defective Equity Transfer Of Limited Liability Corporation

Shareholders’ equity is based on the qualification of shareholder, in accordance with the relevant provisions of the "Company Law" or the articles of association of the company to enjoy the process of a series of rights, such as the right to information, bonuses and preferential subscription rights, etc.Enjoy the right is correspond to an obligation. The most important obligation of shareholders is funding. Shareholder fails to perform or fulfill the obligation to fully funding problems will lead the equity to be defective. In judicial practice, there are so many cases caused by shareholders’ flaws funded, our current laws have relatively provisions. However, when shareholders sign an equity transfer agreement with a third party to transfer a defective equity, the law does not clearly defined.The shareholders, the transferee shareholders and creditors of the company and other companies are involved with these subjects. They represent different or even opposing interests and needs, so the endless dispute consequently appeared, attract lots of concerns from academics and practitioners.This article focus on the defective capital contribution of limited liability company, research and analyze the equity-based theory of defective equity and the transferability of such equity transfer contract and the effectiveness of other issues, clearly determine assume responsibility for issues related to defective contribution after the equity transfer.Removing the introduction and conclusion of the article is divided into four chapters.The first chapter,the brief overview of defective transfer of equity funding. The author introduce the basic theory of defect investment options, for example, the definition of equity funding flaws, the type and characteristics of the basic causes of the problem. Then, make a further analysis of the definition of defective contribution equity transfer, causes, types, forms and features, to demonstrated flaws can be freely transferable equity funding to provide theoretical support;The second chapter, analysis of defects due to funding problems could limit the options of liquidity. This section firstly discusses the eligibility of the shareholders of the investor flaws, by analyzing three different theories on this issue, come to the author’s view, the flaws investors are shareholders. The following, the author further demonstrate the defective contribution illiquid equity contribution due to defects restricted on three levels of theory, current law, and reality.The third chapter, analysis of the effectiveness of defective contribution of the equity transfer agreement. This section describes the different views on the academic contribution of the equity transfer agreement, such as, defective contributed equity transfer agreement is invalid、effective、effectiveness of compromise or revocable and make simple analysis, choice, put forward own views;The fourth chapter,after the share transfer, who will bear the civil liability related to defective contribution. This section introduces the circles on the transfer of the equity transfer defective contribution, introduce the four different perspectives: transferee shareholder bear the responsibility、transfer bear responsibility to shareholders,grant shareholders and the transferee shareholder shared responsibility and determine the obligations according to the transferee shareholders informed. Then comment by doctrine to conclude these four views, make a reasonable allocation of defective contribution funded shared responsibility between the shareholders and the transferee shareholder.