Studies On The Legal Issues Of Shareholders’ Pre-emptive Right In State- Owned Equity Transfer

As compared to the past, whether the structure or layout of state-owned economy is improved. In practice, the transfer of state-owned equity is widely used to achieve the goal of the optimal allocation of resources and preserving and increasing the value of capital. China’s "Company Law" provides a limited liability company’s shareholders pre-emptive rights regime. The shareholders of state owned limited liability company also enjoy the right of preemption when other shareholders transfer their shares to a third party. As state-owned assets, the transfer of State-owned equity in limited liability companies shall also comply with the legal norms of state-owned assets supervision and administration. The preemptive right of the shareholders was involved in PRC, Company Law, but the applicable conditions and the operation procedures are not clearly described. Related regulations on the shareholders preemptive right of the state-owned equity transfer are scattered in laws and regulations on the administration of state-owned property. The preemptive right enjoyed by the shareholders is limited or even excluded, because the relating legislations are not perfect. The exercise of pre emptive rights of shareholders has become a tough problem when transferring state-owned equity on the open market.It is the development direction of legislation to overcome the system obstacle of shareholders preemptive right in state-owned equity transfer and to perfect the relevant provisions on the shareholders preemptive right of the Company Law of China. For this purpose, a lot of practicing and theoretical research must be done. This paper selects three aspects to research the legal issues of the shareholders preemptive right in the transfer of state-owned equity. The first part, starting from the introduction of the basic theory of the related system, the concept of pre-emptive right in the transfer of state-owned equity, trading rules and the necessity of the protection of the shareholders preemptive right in the transfer. In the second section, the obstacles of the shareholders preemptive right in the transfer of state-owned equity and the negative impact from it will be illustrated from the following three respects:The applicable conditions of pre emptive rights of shareholders, Auction and bidding system and the contradiction between the two. The third part, overcoming the obstacles to the shareholders preemptive right in the transfer of state-owned equity, in order to solve the legal problems of the preemptive right of the shareholders in the transfer of state-owned equity, the writer tries to perfect the company law, clarifies "the equal conditions" and "meaning expression" of the exercise of the shareholders preemptive right, improves the auction system of "price law" and the relevant provisions of the bidding.