Research On The Causes Of Shareholder Expulsion Of Limited Liability Companies Of China

The current shareholders expulsion system in limited liability companies is a product of the Company Law III for the purpose of ensuring the authenticity of company’s capital.The reasons for the expulsion of shareholders are limited to situations related to registered capital,and the shareholders expulsion system cannot truly play its due function of protecting the company’s overall interests.As the core of the shareholders expulsion system,the reasons for expulsion is related to the scope of application of shareholders expulsion.Its model construction involves three important contradictions: capital-cooperation and humancooperation,corporate autonomy and coercion of the state,fairness and efficiency,and the the key lies in the choice of autonomy and coercion.Expulsion of shareholder is a corporate management in which the company expels shareholders who harm the company’s interests based on the concept of corporate autonomy.Its essence is a "corporation penalty" that does not require the consent of the expelled shareholders.The standard of expulsion is to damage the common interests of the company and other shareholders,and it can also be due to the combination attributes of the limited liability company’s human-cooperation（based on the limited liability company’s establishment and internal trust basis for its operation）and capitalcooperation（based on the limited liability company’s external guarantee and credit basis）,are divided into expulsion reasons that impair the company’s capital-cooperation and expulsion reasons that impair the human-cooperation of the company,the former should be dominated by coercion,and the latter should be dominated by autonomy.In the construction of the specific grounds for expulsion,three forms of legal reasons,regulatory reasons and material reasons should be adopted.The quantitative regulation extracts clear reasons for shareholder expulsion,and the qualitative regulation summarizes the core standard of expulsion is to seriously damage the interests of the company,and while accommodating a considerable range of expulsions,it draws a bottom line to prevent the possible abuse of expulsion system.In applying the reasons for expulsion,attention should be paid to the legitimacy of the content and the finality and equality of the means,so as to reflect the principles of justice and efficiency of the law.The form of the reasons for expulsion include company’s by-laws,unanimous agreement of shareholders,and sponsor agreement.The effective rules of expulsion clauses should be judged in the form of an absolute majority voting mechanism that does not require the consent of the expelled persons,and should be based on legality and rationality rules to make substantive judgments.The freedom of expulsion and the oppression of equity are only a wall away,and prudent judgment should be made according to the purpose and criteria of expelling.Material reasons are consistent with the essence of the expulsion system and should be taken as the form of expelling reasons.The expulsion of shareholders is the result of balancing the interests of the company and shareholders,and the interests of the company should be the priority.Legislators should not overly limit the scope of reasons for shareholder expelling in order to avoid the possibility of shareholder expulsion abuse,but should consider how to prevent the possible abuse of expulsion system on the basis of reasonably expanding the scope of expelling reasons,criteria such as materiality in content,finality in exercise and equivalence should be adopted.Private law is the essential attribute of company law.In the future,legislators should gradually leave the matter of shareholders expulsion to corporate autonomy.