Research On The Legal Issues Of Defective Equity Transfer In Limited Liability Companies

In 1993,the company law of China established a strict fully paid-in capital system,which pays attention to the enrichment of capital and has the advantages of resisting enterprise risks and ensuring transaction security.However,the system also has obvious shortcomings,that is,at the beginning of the establishment of the company,the shareholders have to inject a large amount of capital,so it is easy to increase the cost of investors to start a business,resulting in a backlog of funds,thus affecting the free development of the market economy.In December 2013,the revised the company law will be contributed to the subscribed &broom,no longer limit shareholder capital contribution to pay for the first time and pay a fixed number of year,the system reduces the amount of capital,when a company is established to simplify the capital program,encouraged investors to entrepreneurship,but also very easy to cause the company speculation and fraud occurs when set up,some investors to use subscribed to circumvent capital contribution obligation,the purpose of the flight of capital contribution,smoke escape capital contribution in disguised forms,false or false capital contribution in practice.Such circumvention of capital contribution obligation seriously affects the effectiveness of capital disclosure and infringes on the interests of the company,its creditors and other shareholders.Therefore,the company law attaches great importance to the capital system of the company and pays attention to the capital contribution obligation of the shareholders,and the laws on capital contribution of the company are gradually improved.With the increasing number of equity transfer behaviors,the company law amended in October2018 set up a special section to regulate the equity transfer of limited liability companies,among which there are also relatively clear provisions on the transfer of equity with defective capital contribution.However,no operational and practical provisions have been made,and a series of disputes caused by defective equity transfer cannot be better solved,and the judgments of various courts are widely different.Therefore,it is the main purpose of this paper to balance the problems in defective equity transfer and guarantee the rights of free transfer of all shareholders,so as to maintain the normal order of the company and promote the development of the company.Starting from the transferability of defective equity in capital contribution,this paper successively introduces the concept and types of defective equity in capital contribution,as well as the theoretical analysis and characteristics of defective equity transfer,which lays an important foundation for the following three controversial issues.Then the second part of this paper analyzes the identification of shareholders' qualification in the transfer of defective equity,compares the two controversial views in the theoretical circle,and discusses with cases.It argues that the defective capital contribution cannot deny the shareholders' qualification.The third part analyzes the validity of the defective equity transfer contract,and compares the different viewpoints of the academic community on the validity of the contract.After that,this paper discusses the liability undertaking of defective equity transfer,including the subject of liability undertaking and the way of liability undertaking,and points out the core view that the subjective mentality of transferee shareholders determines whether the transferee shares joint liability with the transferee shareholders.Another,finally,the paper also to the problem of defective equity transfer legislation perfect suggestion,advocated by source of legislation,reduce defects equity transfer behavior,also said shall specify the defects of the equity transfer contract effectiveness and improve the responsibility mechanism,so as to clarify and solve as soon as possible defects equity transfer some of the issues.The article interprets the above controversial issues through the interpretation of the law,finds the loopholes,compares the different views of the theoretical field,lists the different judgments of the judicial field,and finally puts forward legislative Suggestions.Only by clarifying these issues can we effectively promote the protection of interests and balance of interests between the parties involved in commercial activities,reduce the possible risks and promote the security of transactions.