Study On The Scope Of The Effect Of Shareholders’ Preemptive Right

Since entering the 21st century, with the continuous in-depth reform and opening to the outside world, the socialist market economy has been developing rapidly, and as the important participants in the socialist market economy, the role played by the limited liability company is obvious. At the same time, this situation is accompanied by more and more legal disputes and a large number of cases involve in limited liability company disputes on equity among these cases. In these cases, the issue of the right of preemption of shareholders is always an unavoidable topic. As in this paper, the king of the bund in Shanghai case is a very typical example. In this case the defendant SOHO China in order to avoid shareholder’s preemptive right of the fuxing business as plaintiff, through the indirect acquisition of a controlling stake of the door of sea, skillfully achieving its purpose. In the case, this approach for SOHO China despite conflicting academic circles, but it leads to such problems that China’s "company law" provisions of shareholder’s preemptive right is applicable to the indirect acquisition. Therefore, this paper mainly focuses on the the problem through four chapters.The chapter 1 introduces the basic situation of Shanghai bund king case. The first paragraph mainly introduces the basic situations of Shanghai bund king case and the transactions involved in a case, summarizing the views of the judge of the court in order to mostly show the real situation of Shanghai bund king case. Then the paragraph 2 mainly introduces the academic point of view on the case and then lead the view of the author.The chapter 2 sorted out the basic concepts of preemptive right of shareholders and academic point of view to make theoretical foundation for the following discussion and the full paper. The first section mainly introduces the definition of shareholder’s preemptive right. The second section describes the nature of the equity, making a conclusion that the equity is a comprehensive right after summarizing the main theory. The third section introduces the nature of shareholder’s right of preemption, mainly discussing the three points of view, making a conclusion that shareholder’s right of preemption is expectant right. The fourth section is to introduce the legislative purpose of shareholder’s right of preemption. The main purpose of this chapter is to establish the theoretical foundation for the thesis, in order to avoid abruption.The chapter 3 mainly discusses the provisions of the special circumstances of the application of the right of preemption of shareholders from four aspects. The first section describes the legal process of the shareholder’s right of preemption from the perspective of source of shareholder’s right of preemption in order to make a conclusion that the scope of the application of shareholder’s right of preemption must be agreed upon the convention by the parties that must be permitted by the law. The introduction of second section is to make a conclusion that the judge must interpret the application of the provision shareholder’s right of preemption using restrictive interpretation from the technique of the legal explanation. The third section is to introduce the idea that the shareholder’s right of preemption is the right that shareholder can use to expect the status of shareholder not the equity from the nature of shareholder’s right of preemption. The chapter 4 the unity of the limited liability must be applied to the direct shareholder from the attribution of the limited liability.The chapter 4 uses the theory to analyze the problems of the Shanghai bund case and once again confirms the author’s point of view that shareholder’s right of preemption isn’t applied to the situation of the change of the original shareholder. Finally, the last section end up summarizing the author’s point.