Study On Liability Of Defective Equity Transfer

Equity trading,as an important part of the operation of the company,has been widely used since the company system was created.However,due to insufficient misrepresentation or withdrawal of capital contribution and other capital contribution obligations of some shareholders,defects appear in the right status of the equity,making the validity of the defective equity transfer contract difficult to determine.Although the traditional view holds that the defective equity transfer contract is effective,the commercial cases are relatively complex,and in the current practice,it is not necessary to blindly consider the defective equity transfer contract as effective.As for the subject of liability for defective equity transfer,even though interpretation of company law(iii)has stipulated that the liability for defective equity transfer shall be borne by the transferor,the malicious transferee shall bear joint liability,too.However,the commercial transactions are complex and changeable,and this provision cannot solve the complicated problem of the subject of liability just about defective equity transfer.Whether the liability of defective equity transfer is assumed by the transferor or by the transferee,or it is to distinguish the subjective state of the transferee and then to judge,the way to solve this problem is to clarify the judicial identification standard of the subject of defective equity transfer responsibility.In addition,in the course of assuming the liability for defective equity transfer,there are still some problems,such as the narrow scope of the subject of defective equity transfer responsibility,the imperfect relief channels of the bona fide transferee’s rights,and the detailed evaluation of the value of the sued defective equity.According to different contract validity state,the main body that assumes the liability of defective equity transfer is also different.In this regard,in addition to the company law explanation(iii)of a legislative regulations,the doctrinal disputes mainly are the view of "full responsibility borne by the transfer shareholders","full responsibility borne by the transferee shareholder" and "discrimination theory",more than that,the subject about the defective stock transfer responsibility cognizance standard is not unified in the court in different piaces.In view of this problem,it is suggested that the judicial identification standard of the subject of liability for defective equity transfer should be clarified.Due to the narrow scope of liability for defective equity transfer,it is suggested to expand the scope of liability and make the executive directors of the company assume supplementary responsibilities.In addition,when the bona fide transferee has assumed relevant responsibilities,the legislation only entrusts the bona fide transferee with the "right of recourse",and the protection of bona fide assignee is not perfect,therefore,Suggestions are put forward to improve the relief channels for the rights of bona fide transferees,including granting them the "right of revocation" and "right of defense".Finally,in the process of defective equity transfer,there are still some problems,such as the lack of provisions of defective equity transfer pricing mechanism and the easy intervention of the pricing standard of defective equity in subjective judgment.In view of these two problems,the paper proposes that the detailed rules of the equity value evaluation related to litigation should be changed,the subjective judgment should be weakened,and the objective identification standard should be strengthened.