On Nie V. E-commerce Co. And Others About The Shareholders' Preemptive Right

The principle provision “When the company has new capital, its shareholders have preemptive right to subscribe the capital according to the proportion of capital paid. However, the shareholders can agree not to subscribe the capital according to the proportion of capital paid” of the Company Law of the People's Republic of China and the relevant judicial interpretations is the direct legal basis of the Shareholders' Preemptive Right. However, the law does not provide clearly when the shareholders should exercise the preemptive right, or the shareholders have or don't have the preemptive right to subscribe the capital that the other shareholders can't subscribe and more. Besides, the judicial practicers and legal scholars stick to inconsistent views. Thus, the shareholders are split over the preemptive right, setting off a series of legal disputes. T herefore, in order to resolve the legal dilemma, it's very u rgent and important to improve company legislation, establish and improve the operating mechanism of the shareholders' preemptive right, increase its operability. Concerning the case of Nie v. E-commerce Co. and others about the Shareholders' Preemptive Right, whether the general meeting resolution s have infringed upon Nie' s preemptive right? Both of the parties and the Court of First Instance \Second Instance hold different standpoints: whether the general meeting resolution s on increasing capital in the case are effective or not; whether Nie should have the preemptive right or not. Through analyzing the above two controversial points, it's easy to find that there are two key points: how to determine the effectiveness of the general meeting resolution; how the shareholders exercise the preemptive right. Ultimately, combining with the relevant legislation, judicial practice and theory to a nalyze the case, we can come to the following conclusions: firstly, the third article of third session of the second general meeting resolution is ineffective; secondly, fifth session of the second general meeting resolution is ineffective; thirdly, Nie should have the preemptive right to subscribe 7675000 yuan for the increased capital according to the proportion of capital paid; fourthly, Nie should have the preemptive right to subscribe the capital that Xin Xigang Development Co. and Yinxiang Center can't subscribe.