| On the issue of share repurchase of limited liability company, Only article 74 of Company Law set that shareholder who cast an opposing vote to a resolution passed by the board of shareholders may request company to purchase its own shares on a reasonable prices under three circumstances, none of the rest of Company Law mention it. But the three circumstances in Article 74 is not as same as Article 142,which set under no circumstances are allowed to repurchase its own equity except article 142, so it is not sure whether limited liability company can repurchase its own equity besides the three circumstances in Article 74.There are two views on this issue, one is limited liability company can repurchase its own equity only under the three situations in Article 74, because we apply the statutory capital system, limited liability company can only repurchase its own equity when law expressly stipulated. Others think limited liability company can repurchase its own equity under other situations besides Article 74, because “What is not prohibited by law is permitted”, especially in the field of civil and commercial law.As for the reason above, judgments in courts are also different. A judgment in Supreme People’s Court support that company can repurchase its own equity according to its will, a judgment in Shandong Province Higher People’s Court think that company can only repurchase its equity under the three situation in Article 74. A judgment in Hunan Province Higher People’s Court ignore the dispute instead.But taking the developing of the capital market into account, whether limited liability company can repurchase its own equity become a unavoidable problem in practice. The fourth amendment of the Company Law provide a new chance to reexamine this dispute, combining with several special type repurchasing case, using analogy, we can find that there is a possibility to apply share repurchase system in limited liability company under current legal framework. |
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