Discussion On Shareholders Of Limited Liability Company Exercising Pre-emptive Right Basic Question

The free transfer of company shares, diversity of entitiesare significant characters of modernenterprises, chasing after a pattern of a check and balance of multi-layer shares. However, the limited liability company has its own character of closure. The legislation has its reason to put restriction on the shares transfer to foreign person. The company law of two legal system designed several institution to restrict the share transfer, for example, right of consent, obligation of dissenting shareholder’s compulsory purchase, company re-purchase right and shareholders’ pre-emptive rights. The article 71 th of PRC company law design right of consent, obligation of dissenting shareholder’s compulsory purchase, shareholders’ pre-emptive rights. This thesis mainly launch research on several relatively elementary problems on shareholder pre-emptive right. Practice for the concrete practice of priority right of shareholders also has a lot of controversy, the reason comes down to the provisions of the law is too simplified, exposes many problems in details the operation, if lawmakers to these questions without giving a clear direction, and has extremely easily to the practice of the parties in the operation of the equity transfer matters caused great distress, and when the controversial judicial judge also because too simple law without a unified guidance, may be the same kind of case, a 2 different judge will make different decisions.The introduction part mainly the purpose of background of this thesis. This part point out the flaw and fault of present legislation, approximately introduce the existing research and academic dispute on shareholder pre-emptive right.The first chapter is the main body of priority right of shareholders. First discuss the question is whether the flaws capital contribution shareholders enjoy the shareholder’s right of first refusal to answer the question, can first consider whether flaws capital contribution will influence the shareholder qualifications obtained. And then, even if the shareholder qualification to continue to exist, the company may deprive the exercise the shareholder’s right of first refusal of the part of the discussion more comprehensive analysis is carried out considering law. This part discuss the second question is, can the actual investor, namely the dormant shareholders enjoy shareholders right of first refusal, first of all, if the dormant shareholders whether can show name, company actual registered shareholders, then of course you can exercise the shareholder’s right of first refusal. But if failed to show name, or because the company more than half of other shareholders don’t agree with the show name, if it loses the exercise of the right qualifications. The author thinks that should according to whether the actual participation in the company management is analyzed.The second chapter discuss the transfer of shareholders the obligation of notification and the transfer of shareholder’s right to renege. About notice of the time, the author determines the formal notice shall be given to transfer of shareholders and the transferee the third party after the equity transfer agreement to the company’s other shareholders, because only after the conclusion of the contract, as the same conditions, one of the elements of preemptive right of shareholders to exercise didn’t officially confirmed. The chapter also discusses the nature of the notification, belongs to the law of contract an offer or an invitation to offer, as well as the notice shall include details of and so on. Half after the chapter discusses the regret is the transfer of shareholder’s rights, first discussed the reneging on the necessity of the right to issue, at present the theoretical circle about turning back right reason to exist mainly starts with the nature of right of priority right of shareholders, the right to claim can 3 be divided into before approval right to regret. The author thinks that the necessity of right to regret not because of thinking from the perspective of right to property, and with the legislative purpose of priority right of shareholders and to protect the legal relationship between their thoughts. In affirmed the necessity of the back right after exercising is discussed in the back right time exercising and deny the right conditions, because if not a period for exercising the right to regret, will cause hidden trouble to equity stability of the closed company, and do not allow the transfer of shareholder because not satisfied just transfer price and the right to regret any, also not conducive to stable closed the company’s equity.The third chapter discuss the content of the is one of the shareholders exercise of the right of first refusal elements, studies of same conditions. This part of content mainly includes the equal conditions, the reference standard is equal to what the problem; Same conditions to determine the standard, that is, equal how much is the extent of the problem; Of about the same conditions to determine the time and the second chapter about the notice obligation of notice of time section, the combination of that point of view is the same conditions is after the transfer of shareholder’s equity transfer agreement, because the agreement comes into effect and to determine the same conditions. The same conditions of specific factors, including the price, quantity, and so on. The price, the same and equal number of focuses on specific research include, when transfer shareholders for its and personal relation between the assignee will equity transfer or priceless gift at a discount, and transfer of the special relationship between the shareholders and the transferee such as to maintain the past and the future of long-term trade partnership, also discussed the transfer of shareholders in order to obtain specific content, such as equity transfer or group company internal equity adjustable stroke, etc., because these conditions often hard to achieve other shareholders, at the same condition, how would allow shareholders exercise of the right of first refusal. If allowed, then transfer to protect the interests of shareholdersShareholders preemptive right relief as the last of the basic issues discussed in chapter 4. Infringement case of priority right of shareholders will be mostly associated with violation of notice obligation, such as does not perform its obligations notice or notice. The transfer of an equity transfer agreement between the shareholders and the third buyer effectiveness, how scholars have considered revocable contracts, have considered the contract with pending validity, and the author thinks that if there is no malicious collusion damage the interests of a third person, such as the contract is invalid, you should definitely agreement is a valid contract. After maintain agreement effectiveness, the content of section 2 in chapter distinguishes between the third person has actual transferee equity stake and the third person has not the actual transfer is when processing. For the former, right of first refusal by the exercise of its cancellation right and main way for compensation for damage to the transfer of shareholder benefits.