On My Country's Equity Enforcement System

Compulsive execution of share ownership refers to the realization of equity shares held by the person subjected to execution at the request of creditor,according to due legal provisions and procedures,using state coercive power.Although academia has long been studying compulsive execution of share ownership,with ever-changing social economic activities and revision of laws,compulsive execution of share ownership still faces many problems in practice that remain to be discussed and solved.In 2014,the Company Law changed the company capital system from paid in system to subscription system,eliminating the requirement of shareholders’ actual capital contribution.This change has brought new challenges to the enforcement of compulsive execution of share ownership,at the same time as it reduces the cost of setting up a company and encourages the development of the company.Basing on this background and brokering previous researches and practical experiences,this paper studies and discusses the current legal system of compulsive execution of share ownership in our country,and hopes to contribute to the improvement of the system of compulsive execution of share ownership and the settlement of its practical problem.This paper looks from the theory of compulsive execution of share ownership,and provides a base for theoretical understanding of follow-up study through analyzing the nature of equity share as an object of execution and principle of compulsive execution of share ownership.At present,the academic has a basic agreement on the object of execution and the principle of compulsive execution of share ownership.However,with the increase of the equity pledge financing,the compulsive execution priority of property is confronted by certain challenges.This paper also tries to makes a review and analysis of legislative status of compulsive execution of share ownership.At present,the provisions on compulsive execution of share ownership in our country can mainly be found in Company Law,Fourth Judicial Interpretation of Company Law,supreme people’s court Miscellaneous Regulations on the Freeze,Auction of State-Owned Shares of Listed Companies and Social Legal Person Shares,supreme people’s court Regulations on People’s Court in the Civil Execution of Property Auction or Sell Off,and other legal documents.On account of some contradictions and ambiguity among the law provisions,it is difficult and controversial to enforce compulsive execution of share ownership in practice,mainly including the following four aspects:The first problem concerns execution equity share valuation:in the procedure of compulsive execution of share ownership,equity share valuation is the most difficult question,because of the trouble of accessing company financial data,and the lack of a"universal" valuation method,making valuation a sticking point in compulsive execution of share ownership.The second is how to exercise the shareholders’ subscription right,on which time point should the shareholders express their buying intention and when to exercise their purchase right,whether the object of equity share execution can be partially purchased are the focuses of the discussion of the enforcement of compulsive execution of share ownership.Third,the execution of empty equity shares,in particular,there is no consensus on whether the transferee or the person subjected to the execution shall be obligated to the liability of compensation after the execution of empty equity shares.Fourth,the execution of anonymous equity share,when dormant shareholder is the person subjected to execution,there might be risk that shareholder’s identity will not be admitted,and if named shareholder is the person subjected to execution,then the right relief of actual investor becomes the problem.Based on legal provisions on compulsive execution of share ownership and analysis of practice problems,this paper proposes the following suggestions to improve the system of compulsive execution of share ownership.First,at the legislative level,it is necessary to further comb the law provisions,especially laws on how to exercise the pre-emptive right of other shareholders,and strengthen the implementation of assistants’ obligations;Second,at the judicial level,establish a supervisory mechanism for compulsive execution of share ownership,to avoid court’s sabotage of the execution or improper execution,and at the same time an equity shares evaluation system should gradually be built according to judicial practice,so as to guide practical work;Third,at the social level,there should be stronger cooperation and coordination with industrial and commercial registration department,and give full play to the lawyer’s professional skills;an equity trading information platform could be built,and link it with the industry and commerce system to realize online auction,online trading etc.,to promote equity execution progress.