Analysis On Shareholder Expulsion System Of Limited Liability Company

Shareholder expulsion system means that a company can delete shareholders from its register of shareholders, force shareholders to exit from the company, and make shareholders loss the shareholder qualification according to certain procedures; that is to say, shareholders passively lose the shareholder qualification. Shareholders get the shareholder qualification because of owning stock rights, and loss the shareholder qualification due to loss of stock rights. One of shareholder rights’ content is management. So a company can unilaterally deprive shareholders of this content based on the overall interest of the company. Shareholder expulsion right means that a limited liability company(hereinafter referred to as “LLC”) deprives the shareholders’ qualification according to the previously formulated articles or the resolution of the shareholders’ committee. The nature of the shareholder expulsion rights determines whether and when the effectiveness of the shareholders takes place. The nature of the shareholder’s expulsion rights is also depended on the applicable procedures when the effectiveness of the shareholders takes place. If the shareholder’s expulsion takes effect through the shareholders’ committee resolution, then it becomes as the right of simple formation. If the shareholder’s expulsion eventually takes effect through the judgment of a court, then it becomes as the right of action of formation. Shareholder’s rights and shareholder’s expulsion determines that shareholder’s right can be deprived. A LLC has three features: "collaboration of human", corporative, and contractual. Based on these, the shareholder expulsion system of LLC exists on theoretical and justifiable basis.Shareholder expulsion system as an alternative system of judicial dissolution of the company plays an irreplaceable role to resolve internal conflicts and maintain the company’s continuing operations in a LLC. China’s current system of corporate law doesn’t give explicit regulations for the shareholder expulsion. The 37 th article in the "Certain Regulations(3) of the Supreme Court’s about applying to <People’s Republic of China Corporate Law>" only affirms that a company can expulse his shareholder qualification by a resolution when a shareholder of LLC refuses to fulfill his obligation to pay capital or withdraws all capital. It provides a direct the law basis for cases of shareholder expulsion in the judicial practice. But the design of its specific provisions is simple and rough, and it can’t adapt to the demand for shareholder expulsion of our current judicial practice in many respects, such as the applicable scope, the applicable conditions, the applicable procedures and legal effects. Therefore, firstly all lawsuit referee books about shareholder expulsion of LLC from 2013 to 2014 are selected as samples to analyze the profile of lawsuits about shareholder expulsion of LLC. Secondly, based on the analysis existing problems of the shareholder expulsion system of LLC are pointed out. Then, the applicable scope, applicable conditions, applicable procedures and legal effects of the shareholder expulsion system of LLC are explained respectively from the legal basis of the shareholder expulsion system of LLC. Finally, some improving suggestion is presented for the shareholder expulsion system.The introduction introduces the domestic shareholder expulsion system briefly, states the significance of choosing the shareholder expulsion system as a topic, presents a research profile of the shareholder expulsion system issues specifically, and puts forward some research methods and three innovations of this thesis in terms of content and form.The text part is divided into five chapters:The first chapter firstly leads to the research problem of this thesis by studying the shareholder expulsion lawsuit of Yao Yunhong and Dalian food factory, and selects all lawsuit referee books about shareholder expulsion from 2013 to 2014 as samples to analyze the main profile of lawsuits about shareholder expulsion and court’s standpoint to problems of shareholder expulsion, then teases out and summarizes some existing problems in the lawsuits about shareholder expulsion, and divides these problems into four categories: the first,the applicable conditions of shareholder expulsion system; the second, the applicable procedures of shareholder expulsion system; the third, the legal effects of shareholder expulsion system; the fourth, the derivative of the shareholder expulsion system.The second chapter firstly explores the connotation of shareholder expulsion from the nature of the shareholder’s rights and the shareholder’s expulsion rights, and compares the shareholder expulsion with the loss of rights of shareholder, and point out that shareholder expulsion is a hypogyny concept of the loss of rights of shareholder; and then describes three theoretical basis of the shareholder expulsion system of LLC: "collaboration of human" and "co-financing" of LLC, and the Corporate Contract Law Theory; finally reviews the legislative status of the shareholder expulsion system.The third chapter describes about how to improve the applicable conditions of the shareholder expulsion system of LLC, and points out the following standpoints: the shareholder expulsion is the last resort to solve a company deadlock in the condition that a company can be subsisting, and a LLC should be given autonomous rights to formulate causes of shareholder expulsion, but these causes must meet certain conditions: they must meet the "materiality" standard, be related to the shareholder’ own or his behavior, and be formulated in advance. What’s more, the situation of applying shareholder expulsion system to the following shareholders is the discussed.The fourth chapter mainly discusses about building the domestic shareholder expulsion system of LLC applicable procedures, and points out the following standpoints: the application procedures should primarily focus on the resolution procedure of shareholder expulsion, supplemented by the litigation procedure of shareholder expulsion, and the litigation procedure of shareholder expulsion can be divided into the derivative litigation of shareholder expulsion, the litigation of requesting to confirm the shareholder expulsion invalid, and the litigation of requesting to cancel the resolution of shareholder expulsion.The fifth chapter briefly discusses the influence of shareholder expulsion system on expulsed shareholders, the company and creditors separately, and proposes methods to prevent from abusing the shareholder expulsion system.The conclusion reviews and summarizes the full content, and puts forward some improving suggestion for the applicable scope, applicable conditions, applicable procedures and legal effects of the domestic shareholder expulsion system of LLC.