Study On The Legal Issues Of Dividing Stock Rights In Divorce

Since the Economic reform and open up,the social development has been accelerated,and the forms of social wealth have become more and more diverse.Family,as the basic unit of our society,contains diversified types of wealth,and stock right is one of them.Stock right,as a new type of civil right,is a compound type of rights,which includes personal and property rights,and it has gradually become an important part of marital property.Along with the rapid development of society,there is a change in the traditional concept of marriage.In recent years,the divorce rate has been increasing all over the country.Divorce has led to the disappearance of the co-ownership basis of the spouses’ common property,which calls for the division of the spouses’ common property.Such division involves not only property rights but also adjustments and changes of personal rights.Besides the property rights and interests of both spouses,it may also involve the interests of other shareholders and creditors of the company.How to deal with these problems properly has great impact to the order of socioeconomic development.The division of marital joint stock right involves the Civil Code on Marriage and Family and the Company Law and other Commercial Laws and their judicial interpretations.There is a incompatibility between the Marriage and Family code and the Commercial Law in respect of the ways of exercising joint stock right.As is prescribed in the Marriage and Family code,both spouses shall have equal right to dispose their jointly possessed property,and the exercise of such right shall be based on the "consensus" of both spouses.However,the commercial law pursues the Commercial Externalism,and the subject of exercising stock right should be determined strictly according to the result of publicity,which leads to the phenomenon of "inconsistency between exterior and reality" in marital joint stock right.This paper holds that the jointly-owned stock right by marital partners shall follow the "principle of distinction".During the existence of the marital relationship,the stock right shall be jointly owned by both spouses,however,in the case of external relationship,the stock right registered in the name of one party can only be exercised by the shareholder spouse;when the marital relationship ceases to exist,the internal relationship ceases to exist and the basis of joint ownership ceases to exist so that the stock must be divided.As for jointly-owned stock right,if the spouses can reach an agreement upon negotiation,the shares shall be distributed according to the agreement reached through consultation.Where it is impossible or fails to reach an agreement through consultation,the shares shall be divided according to different forms of companies.The division of jointly owned shares is essentially a process of share transfer which is subjected to the legal provision of the Company Law on share transfer.However,due to the difference in the forms of companies and the unique characteristics of the process of division of marital co-owned equity,its division system still needs to be established and improved.According to the existing laws of China,companies limited by shares,as equity joint venture companies,can freely transfer their stock right and there are relatively few disputes arising from the division of the stock right in divorce;limited liability companies are of dual nature of individuals and capital,and the division of stock right may involve many issues such as other shareholders,companies and third parties,etc.,which is the key point and difficulty in judicial practice.This paper will,from the perspective of limited liability companies,in light of current legal provisions and judicial cases,make an analysis of various doctrines and judgments,so as to try to sum up a reasonable method for the division of jointly-owned stock right in divorce and put forward an idea for the improvement of relevant legal system.In addition to the introduction and conclusion part,this paper expounds the division of marital co-owned share of limited liability company in the scenario of divorce through four chapters.Chapter one elaborates and summarizes the current situation of legislation and judicatory on this issue in our country and puts forward the questions.Chapter Two proves that the principle of distinguishing the shall be followed in respect of the marital jointly-owned equity and it can be divided in divorce by expounding the nature of equity and the similarities and differences between equity transfer and equity split.In Chapter Three,based on the practical cases in recent two years,this paper tries to construct the ways of splitting the jointly-owned shares of spouses under different circumstances,aiming at the limited liability company and the special share-holding form at present.Chapter Four tries to offer some proposal about the issues involved in the process of the division of marital co-owned share in divorce in order to improve the legal system of division.