On Effectiveness About Restrictive Articles To Transfer Share In Company's Constitution

The fourth item in article seventy-one in the Corporation Law gives the right to limited liability company constitution of setting rules about share transfer on its own. This is the reflection of the Corporation Law adapt to the economic development and the expansion of company's autonomy. To exclude outsiders to enter and maintain the stability of equity structure, the limited liability company, which is featured by its collaboration of human resource and set up on the foundation of the trust relationship between shareholders, often make restrictions on share transfer by its article. However, whether the company constitution could make restrictions on share transfer as the share is a property that the property owners should enjoy the freedom of disposing it? How is the effectiveness of the share transfer agreement which is signed in the violation of the articles'restrictions? Whether it can lead to share changes?How is the responsibility distribution between the related subjects who violate the articles' restrictions?The law does not make that clear about these issues,which leading to the too much discretion of the judge in the judicial reality and the frequent situations of different judgement with the given conditions. All of these are causing serious damages to the judicial credibility and authority of law.Therefore, it is necessary to make an intensive study of the rules about share transfer restrictions inside limited liability company constitution.First of all, it is clear that the company constitution can only make procedural limitations of share transfer by analyzing the legal attribute of share transfer restrictions of limited liability company constitution.And the restrictions are administrative mandatory provisions which are obligatory to each shareholder,but the share transfer agreement will not be void if it violates the restrictions. Second, it should be treated differently that the share transfer are of different effectiveness to different subjects from the further analysis of shareholders, the transferee and the third person outside of the share transfer agreement. Though shareholders are limited by the restriction, the share transfer agreement's effectiveness between the parties would not be affected.The agreement will have no effect on the company and other shareholders for its violation of company article's restrictions. Besides, the effectiveness of agreement between the parties does not mean that shares have been changed, Changes in share refers to the changes of share ownership rather than the changes of share content. Changes in the share ownership depend on the completion of share delivery between the parties, but changes of share content depend on the company's internal and external share alteration registration. Finally, it is uncertain whether the share transfer agreement which violates the restrictions can be fully performed, so it is necessary to clear the distribution of civil liability.