The Shareholder's Preemption Right In Transfer Of Equity In Limited Liability Companies

The right of preemption refers to "the right that the obligee enjoys under the legal provisions or contractual arrangements when the seller sells a particular subject matter and has the same conditions prior to the purchase of the third person." It breaks the principle of equal empowerment in civil law.,as a kind of civil privilege to purchase a particular property prior to others.The preemptive right of shareholders of a limited liability company is a type of preemptive right,which means that when a shareholder of a limited liability company transfers its entire or part of the equity,the other shareholders will,based on the qualifications and status of their shareholders,under the same conditions,enjoys the right of preferential purchase.According to the different sources of rights,the preemptive right can be divided into two types:statutory and contractual,and they have their own support in the legislation of each country.China's preemptive right to purchase is statutory and is stipulated in Article 72 of the Company Law.The preemptive right system has a significant impact on the equity transfer market for limited-liability companies.After all,compared to China's immature investment and financing and its exit mechanism,equity transfer is a relatively convenient path.The legal or contractual type of priority purchase right deserves our careful treatment.After knowing the case of the Shanghai Bund Diwang,with the deepening of the case study,I thought the case was suspicious.The practice of surpassing the indirect acquisition transaction mode and giving preferential access to "penetration" may be wrong.In addition,the author has questioned the legal preemptive right system itself:the reason why the transferring shareholder seeks to find an outside third party for equity transfer is because the internal transfer is impossible,but the priority purchase right shareholder can interrupt at any time or wait until the "winning fruit" of the equity transfer transaction.Is this kind of protection just for consideration of human interests?Is humanity worth protecting in the present?The study found that countries adopting the pattern of pre-emptive right-of-arrival rights already have an advantage in number,and many countries that adopted the legal model have already switched to the contractual model.Moreover,the application of legal priority purchase rights in China is not ideal,and there are theoretically difficult issues.In practice,there are judicial misjudgments such as the case of the Shanghai Bund,and the root causes are flawed in the design of the system itself..Therefore,moving from statutory to convention is the proper choice for China's preemptive right system.However,due to practical considerations,there is also a path of realistic improvement of institutional optimization.This article is divided into five parts as follows:The first part introduces the legislative examples of legal and contractual preemptive rights in the world and tries to find out the legislative trend of this system;the second part starts from the disscussion of the preemptive right's nature in theoretical circles.The fierce collision between various doctrines can help to find out the real pain points behind the nature of the dispute;the third part starts from the practice of the case of the Shanghai Bund,and uses the in-depth analysis of the case to explore the legal priority purchase rights.The fourth part directly analyzes the institutional design of the legal preemptive right;the fifth part is based on the above discussion and provides the ideal and reality for the perfection of China's system of preemptive right.The path hopes to create an effect for future research.