Studies On Confirmation Of Shareholder Qualification In LLC

Qualification of shareholder is crucial to the ownership of shareholders’ equity interest. The approach for confirming shareholder’s qualification produce naturally from the practice of identifying relevant evidence in civil court. The substantive fundamental evidence, such as Capital Contribution Certificate, Share Transfer Agreement, is required in the civil litigation produce, as well as forms of evidence,such as Notification of Share Registration, Register of Shareholders, Memorandum and Articles of Association and Business Registration. As the matter of qualification of shareholder falls into the jurisdiction of corporate self-governing, terms and condition in relation to qualification of shareholder shall be governed by the Memorandum and Articles of Association, and the Memorandum and Articles of Association shall be prevail over external legislation and regulation. When there is any conflict between the substantive fundamental evidence and forms of evidence,substantive fundamental evidence will be conclusive if it only evidencing the corporate internal relationship. If an external third parties involved, forms of evidence,however, shall be found in favor. A procedural element’s strength of publicity decides whether or not it could triumph other procedural ones. Change in shareholder’s qualification depends on the conflicts between right appearance and declaration of wills as well as the ones between characters based on capital and characters based on shareholders. Change in shareholder’s qualification takes formalism with equity declaration notice featuring in it as a procedural element, based on the fact that the shareholder’s qualification confers to both legal and agreed limitations. People obtain shareholders’ qualifications amicably with the application of corporate registered capital stock subscriptions. If so, it is desirable to unleash the constraints upon obtaining shareholders’ qualifications of performance shares. Bona fide acquisition of shareholder’s qualification which should be used in prudential way is anything,but a first option since it will damage in a certain degree on a firm’s characters based on shareholders. Because equity transfer, division, inheritance, donation own exactly the same nature, it would better unify the rules governing shareholder’s qualification. If a shareholder’s name is discordant from the reality, other shareholders’ opinions should be respected while the substantial requirements prevail if domestic relation is the only question that involved; If external relation is concerned, the form requirements should prevail instead.