Study On The Restriction On The Transfer Of Shares In Corporation Article

The companies in our country are divided into two types, namely limited liability companies and joint stock co., LTD. The provisions in company law make different institutional arrangements for the two types of companies. For example, the limited liability company can limit the transfer of shares in the articles of association, but the law doesn’t regulate if the association can limit the transfer of the shares in sock co., LTD. The articles of association autonomy is an important content of corporate governance, and the companies often make arrangements in the articles of association in order to make stock flow within the scope of its control. In practice, the limits include several aspects as following: a). forbidden transferring the share or force to transfer the shares; b) restrict the receiving party; c) restrict the transfer time; d) restrict the proportion of shares transfer and other restrictions.For restrictions on the share transfer of non-listed joint stock co., LTD in company articles, the academic circles have different views. Some scholars believe that the restriction is invalid as shares in the company law provisions regulate that shareholder of joint stock company have the right to transfer the shares freely. But some scholars believe that the share transfer freedom is just principles, with the development of the company law, this principle gradually is regarded to be break, and the effectiveness of restrictions should be admitted.Limits on non-listed shares transfer in the company’s articles cause the discussion because of the arrangements of regulation is not perfect. According to the company law, the simple division of companies into limited liability companies and joint stock co., LTD. Bur special provisions are for listed companies when different types of non-listed joint-stock company apply to the same regulation. Under the legal framework, the system of the division of the company and corresponding design is not balanced and results a lot of problems. So many scholars argue to reform on the company types.With the concept of non-listed public company being raised and its stock transfer system construction, some non-listed public company’s openness becomes stronger. But the openness of non-listed non-public company still not reflected, and those companies’ difference between listed companies and non-listed public company also more and more obvious. The corporation law has no special regulations for non-listed public company. Non-listed non-public company belongs to joint stock co., LTD., and applies different rules with the. However, the difference between non-listed non-public company and the limited liability company is becoming small.Company law seeks is to achieve balance between autonomy and governance, there is dispute on whether the principle of freely share transfer in our country’s corporation law can be break through. I think that the provisions of the share transfer free is just principle, in non-listed joint stock company which operate on the base of trusts between shareholders, shareholders’ agreements should be prevail law if there is no circumstances of breaking the mandatory provisions.Non-listed shares in the company’s articles to limit the effectiveness of the share transfer should distinguish between public and non-public company, the initial articles and amendment to the articles, procedural limitations and the real right restrictions.