Research On The Validity Of Limited Liability Company's Articles Of Association Regarding Restricting Equity Transfer

As market economy continues to develop,the concepts of freedom,democracy and corporate autonomy is taking root,sprouting and begins to thrive in practice.Judging from the development course in the two amendments of the Company Law in 2005 and 2013,it is obvious that the“relaxation of government control and respecting corporate autonomy” has become the main thread of revision for the Company Law.The Company Law was amended to cancel the limitation on the minimum registered capital of a limited liability company at the end of 2013,totally lowering the threshold of incorporation,which means that the establishment of a limited liability company has become easier,and it has become a major form of corporate organization in the modern company system.As one of the core contents of the limited liability company system,equity transfer has aroused Chinese scholars' more and more attention in recent years.In our country's legislation,the provisions on equity transfer are mainly embodied in Article71 of the current “Company Law”.The fourth paragraph of this Article clearly gives the articles of association the autonomous right to make "other provisions" on equity transfer.However,the application of the clause in commercial practice is confronted with the following problems due to the ambiguous legal regulations: How can the articles of association exclude the rules on equity transfer under the company law? To what extent can the equity transfer be restricted and what is the validity of such a restriction in the company's articles of association? Does the violation of the share transfer clause in the company's articles of association affect the validity of the equity transfer contract between the shareholder and the third party and whether the third party can acquire the shareholder qualification? For the judicial practice,in terms of the above-mentioned issues,according to the different understanding of article 71,paragraph 4,there are often totally mutual conflicting judgments in practice on the above-mentioned issues.The lack of a unified judgment thinking wasn't formed until now,which caused serious impacts on the credibility of the legal judgment,the reputation of the court and the unification of the legal system,which made it impossible for relevant third parties of the interests of the company to obtain reasonableexpectations,which leads to high social costs.Starting from the above-mentioned issues,this paper is on the basis of the analysis of the normative nature of Article 71 in the “Company Law”.By clarifying the essential nature of the articles of association and the equity right of limited liability company,and then setting the general boundaries of the autonomy right of the company's articles in the aspect of the equity transfer,and making typification summary.This paper expounds the main types and validity of the articles of association restricting the equity transfer in practice.Finally,from the ultimate purpose of the equity transfer,the author further analyzes the effect of the clauses restricting the equity transfer in the articles of association on the enterprise as well as equity transferees other than shareholders.The author aims to analyze the problems caused by the clauses on equity transfer and restriction of equity transfer to provide a way of thinking for the solution of such problems in judicial practice.