Research On Termination Of Installment Equity Transfer Contract

With the development of China's socialist market economy,the economic aggregate has grown rapidly.Now China has become the second largest economy in the world,and limited liability companies,as a common economic activity subject,have also achieved great development.Due to the investment,market competition and the company's development prospects and other factors,the transfer of limited liability company's equity is more and more frequent,equity transfer disputes will follow.The equity transfer contract,as an agreement between the parties,involves the interests of the transferor,the transferee and the limited liability company.In the equity transfer contract,both parties may choose to pay the transfer money in a lump sum or in installments.The law has not made clear provisions for the settlement of disputes over the transfer of shares,but only established relevant provisions that can be referred to the Contract Law of People's Republic of China.Whether the termination of the transfer of shares can directly refer to the relevant provisions of article 167 of the Contract Law,there is also a great dispute between the theoretical and practical departments.This paper will take Tang Changlong v.Zhou Shihai equity transfer dispute case as an example to discuss.The structure of the paper is divided into four sections:The first part introduces the case,analyzes the court's decision result,and summarizes the dispute focus of this case as follows:(1)The nature and relationship of the legal rescission right and the rescission right of installment contract in the contract law;(2)Whether the equity transfer contract of a limited liability company is applicable to the termination right of the installment sale contract according to article 167 of the contract law.The second part analyzes the legal principle of the termination right of installment,and introduces the general theory of the legal termination right,trying to clarify the relationship between the termination right of installment and the general legal termination right.The third part analyzes the particularity of the equity transfer contract from three aspects,and makes a comprehensive analysis on the feasibility of applying article 167 of the contract law to the instalment equity transfer contract fromthe aspects of legislation,judicature,analogy application and commercial contract loophole filling rules.The fourth part analyzes the defects of the current installment payment system of equity transfer in China,summarize the legislative experience of other countries and propose solutions,in order to improve the relevant system of the installment payment of equity transfer in China.