Research On The Countermeasures Of Indirect Acquisition To Avoid Shareholders' Prior Purchase Right

In order to achieve the purpose of acquisition or reduce the acquisition cost,there have been many ways to avoid the shareholders' preemptive right of limited liability company in commercial practice,and most of these methods themselves are not in accordance with the legal provisions.However,there are many controversies on whether the way of indirect acquisition to circumvent shareholders' preemption right violates the existing laws and regulations.The indirect acquisition discussed in this paper refers to the purpose of circumventing the preemptive right of other shareholders.Instead of directly buying the shares of the target company,the acquirer,through the design of a certain transaction structure,instead acquires the equity of the parent company of the target company of 100%,and indirectly realizes the right of control over the equity of the target company.Acquisition methods.In the first part,This paper gives a brief summary of an indirect acquisition case.Zhejiang Fosun Commercial Development Co.,Ltd.v.Shanghai Changye Investment Management Co.,Ltd.is a case concerning indirect acquisition to avoid shareholders' preemption right.The value of the subject matter involved in this case is as high as 4 billion yuan,In this case,Fosun Commercial believes that the ownership acquisition seriously damaged the personal integrity of Haizhimen Company and infringed on its prior right to subscribe as a shareholder of Haizhimen Company.In the present case,Fosun Commercial believes that the relevant ownership acquisition seriously undermines the personal integrity of Haizhimen Company and infringes on its right to preemptive subscription as a shareholder of Haizhimen Company.Fosun Commercial filed a lawsuit with the Shanghai No.1 Intermediate people's Court,requesting the court to declare The contract for the transfer of shares involved in the case was null and void.The court of first instance decided that it supported the plaintiff's claim,the defence filed an appeal against the judgment of the first instance,and the court of second instance did not rule on the dispute.Finally,the two parties to the case reached a settlement and Soho China chose to withdraw.The court of second instance granted permission to the appellee Zhejiang Fosun Commercial Development Co.,Ltd.to waive all the first instance litigation claims,and annulled the civil judgment of the first instance in this case.The priority right of reviving commerce was eventually maintained,but as consideration,Renaissance Group paid a huge sum of money to buy another 50% shares of the company.In the second part,the whole process of this case involves many companies with mother-son relationship,the transaction structure is very complex,it is difficult to express and understand,so this paper uses the case model to clarify the main transaction process.The key points of the dispute are highlighted,and based on the case model,the controversy in this case is developed from several aspects.The dispute in this case can be divided into two categories as a whole.The first is whether the shareholders' preemptive right will be damaged under the indirect takeover mode.The second category is whether the relevant equity transfer contract can be considered invalid.On the first kind of dispute,this paper starts with the shareholder preference of limited liability company.This paper discusses the nature of preemptive right,the right of preemption and the partnership of limited liability company.With regard to the second kind of dispute,according to the way of action adopted in this case for the revival of commerce,this paper attempts to start with article 153 of the General principles of Civil Law of the people's Republic of China(hereinafter referred to as the General provisions of Civil Law).Article 154 and Article 52 of the contract Law of the people's Republic of China(hereinafter referred to as "contract Law")begin in three directions,and the feasibility of each direction is demonstrated through legal analysis.Other shareholders of a limited liability company cannot and need not merely claim invalidity of the relevant equity transfer contract.In the third part,for the shareholders of LLC,the risk that the hostile takeover party circumvent its preemptive right by indirect takeover does exist,and once the hostile takeover event occurs,it will be very difficult to follow up.Because if the company wants to be infringed on its preemptive rights,it must bid for the shares,which is particularly costly to remedy.Therefore,in view of the above risks,this paper,on the basis of the detailed analysis of the above judicial cases,tries to give the original solutions from the two angles of amending the articles of association and concluding the protocol,and demonstrates the feasibility of these schemes.These solutions in this article Two kinds of schemes can be divided into two categories,the first kind of scheme is to prevent malicious indirect purchase in the way of agreeing the clause of liquidated damages.The second kind of scheme is to limit the change of control right of the limited liability company ' s equity through the formulation or modification of the articles of association of the company.