Study On The Exercise Of Right Of First Refusal

Shareholders' right of first refusal plays an important role in the limited liability company system.It plays a huge role in maintaining the humanity within the limited liability company,promoting the transfer of equity freedom and protecting the security of equity transactions.However,a lot of controversial issues still exists in the system.As a supplement to the Company Law,the Company Law Interpretation IV answers the main questions in the judicial application and provides a unified basis for future court judgments,butthe identification of specific conditions and contents in judicial practice still needs to be discussed and stipulated.These issues are related to whether the court can hear the relevant cases and make correct and unified referees.Also,the effective maintenance of the interests of all parties needs crystal explanations that.It generates an extremely crucial influence for the trust relationship within a limited liability company and the freedom to withdraw from the protection of shareholders.The shareholder's right of first refusal is to protect the free exit rights of shareholders,which are based on protecting the human rights of limited liability companies,so that the effective maintenance of the interests of all parties in the process of equity transfer can be realized.This essay relies on the Company Law Interpretation IV to study the exercise of shareholders' preemptive right from the perspective of judicial application.The first part mainly discusses the basic theory of Right of First Refusal which firstly illustrates the concept of preemptive right and the nature of its rights.Then,the legislative value and legal normsof shareholders' preemptive right will be elaborated at this part.Finally,the exercise of the shareholders' preemptiveright and issues that may arise in the exercise of rights will be mentioned.The second part is mainly about the standard of "equal conditions".On this issue,I agree with the view of "relative equivalence".In the identification of the content of "equal conditions".In addition to the general economic factors,this article suggests that factors such as “friendship relationship” and “specific items” should not be considered when judging “equivalent conditions”.The third part is the discussion of the notice of the shareholders' preemptive right,including the object,method and content of the notice.It is recommended to make an expanded explanation on the notification method,and the “equal conditions” should be included in the content of the notice.The fourth part deals with the determination of the reasonable period of the shareholders' pre-emptive right and the starting point and duration of the exercise period for determining the exercise period of the pre-emptive right.The starting point should be counted when the “equivalent condition” is notified.The fifth part focuses on the discussion of other specific issues such as the exercise of the right of regret of the transfer shareholders and the restrictions on the rights,which including the time limitand conditions of the right.And the issue of the responsibility of the exercised shareholder.