Study On The Legal Issue Of The Transfer Of The Defective Share In The Limited Liability Companies

This article mainly discusses the specific legal issues involved in the transfer of the relevant equity after the defective contribution of the shareholders of the limited liability company under the revised subscription capital system of the Company Law of the People's Republic of China.The first part of this article firstly defines the defective share and holds that it should be generally understood,that is,it should include all the shares that do not meet the essential and formal requirements for the acquisition of equity,including the situations where the investor fails to fulfill the investment obligations,the shareholding record or the registration procedure because of illegalness,non-compliance or default and other causes.Defective share investment,as a kind of subdivision of defective equity,refers specifically to the defective equity arising from the existence of defective capital contribution when the company initiates the establishment or replenishment of the company.Before the revision of the company law,our country imposed double limits on the amount of initial capital contributions and capital verification for the shareholders of the company.After the revision,China canceled the aforesaid capital contribution restriction and actually completed the transition from the paid-in capital system to the capital-subscribed capital system.The shareholders of the company may subscribe for their own capital contribution and the exact time of contribution in the articles of association,the establishment of the company will not fail due to shareholders' failure to pay the registered capital.This article hold the view that the type of defective investment isbetter to be divided into two types including failure to perform and not fully implement.For the situations where shareholders refuse to fulfill the funding obligation,withdraw funds after the establishment of the company or fraud forged bank transfer certificates or other property transfer procedures to make false contributions,these three situations can be classified as non-compliance with the funding obligation.As for the assets that the shareholders have used for capital contribution,which have obvious flaws,those who fail to pay their contributions on time and in accordance with the amount agreed in the articles of association and the paid-up time can be classified as not fully performing.The second part of this article starts with analyzing the transferability of defective share to analyze the validity of the defective share transfer contract.The essence of this question lies in whether the flawed contributing shareholder has obtained the complete shareholder qualification and then can transfer its equity effectively.In view of the validity of the flaw-funded equity transfer,there are four kinds of viewpoints: invalidation,revocation,validation and compromise in academic circles.After reviewing these four views,this article find that there is overlap between doctrines,such as invalidation and compromise,which hold the view that the fully fulfilling of the funding obligations leads to the obtain of shareholder qualifications and even the successful establishment of the company,the compromise doctrine only consider the different registered capital system on the validity of the contract of assignment of defective share investors on the basis of the invalidation doctrine.This article argues that it is not advisable to use the invalidation as well as the compromise doctrine.While effective argument and revocable say belong to different theories,the basis and conclusions of their arguments also overlap.The validation doctrine prefers appearance to the true meaning of both parties during the contract.This article believes that the flaw in the equity transfer contract should retain the validity of the theory of civil revocation of the application of conditions,consider whether the transferee for flawed capital contribution is knowingly,whether living in the opposite position relative to goodwill,which can protect the legitimate rights and interests of the transferee and prevent the transferee with bad will from making profit through the transfer.The third part of this article discusses the assumption of the related civil liability after the transfer of the defective share investment,which mainly includes the following three aspects: the responsibility to fulfill the capital of the company,theliability to the other shareholders of the company for breach of contract and the liability to the company's creditors,This paper argues that the two doctrines which make the transfer and the transferee to fully take the responsibility is too absolute and does not consider the mentality of the transferee in the transfer of the defective share.Similarly,the doctrine which makes both the transferring shareholder and the transferee shareholder jointly take on the responsibility is considered to protect the legitimate rights and interests of the company,does not consider the mentality of the transferee in the transfer of the defective share as well.This article agrees with the doctrine which make the transferee shareholders to differentiate their responsibilities.This point of view should consider the subjective meaning of the transferee shareholders,and their understanding of the fact that the transfer of shareholders' flawed capital contribution determines their commitment.Subsequently,the fourth chapter of this article creatively introduces the fair value of share as a consideration factor in trial practice,and on this basis,classifies and discusses how the transferee's goodwill is determined under different circumstances,and attempts to make reference for the people's court.