On Transfer Restrictions Of Shares In A Limited Liability Company Under Autonomy Of Company Charter

The restrictions on the share transfer of Limited liability company (LLC) relates to fundamental interests of its shareholders, so they always lead to disputes and therefore become a hot topic discussed in academic circles. Although the Company Law modified in 2005 has made substantial improvement on this issue, they have not make the disputes end and even stirred up a new"waves". On one hand, the new"Company Law"has reserved many"blanks"left to the court to make up for. On the other hand, the establishment of"the autonomy of company charter"means various kinds of restrictions on the transfer of company shares. This trend of liberalization undoubtedly provides the parties with adequate opportunities, but it also means the imbalance in benefits and the risk of disputes coalescence which constituted the new challenges that the judges of our country will face. This article is the study differed from the ones conducted before 2005 for it is based on the autonomy model accepted by new Company Law. The main body of this article will be carried out in three parts.PartⅠis the establishment of"the autonomy of company charter"in term of restrictions on the share transfer of LLC. To begin with, the author traces the history of restrictions on the share transfer of LLC in China. As far as the author is concerned, the changing of the concept about the truth of company and the relationship between company law and company chart is the primary cause to promote the establishment of"the autonomy of company charter"in term of restrictions on the share transfer of LLC. On the issue of restrictions on the share transfer of LLC, the autonomy of company charter is the most suitable model.PartⅡrelates to the supplements of"the autonomy of company charter"in term of restrictions on the share transfer of LLC. The new Company Law has remained the rules (Company Law§72.2 and§72.3) which use to be statutory restrictions as supplement. These supplement rules reflect the value of legislators and will take the role of model. To make the issue be sure, the author has reorganized the above rules from three aspects. First of all, according to the principle of"achieving the best balance of benefits", the rules will be interpreted as: when the shares of LLC are to be transferred outside, the remaining shareholders can choose to buy these shares at a reasonable price with the same conditions or to exercise the pre-emption right. Secondly, how to decide the price of shares of LLC? The author thinks that the problem is largely a technical issue, so the ideas of economists and accounting experts should be respected and the court should be involved in the problem indirectly. Finally, the author explores the problem of the partly exercising of pre-emption right.PartⅢinvolves the boundaries of"the autonomy of company charter"in term of restrictions on the share transfer of LLC. It is one of important mission for the legal scholars and the Court of our country to define the boundaries of the autonomy of company charter. The author has found some compulsory rules though analyzing three typical cases including"the prohibition of share transfer","compulsory transfer of shares"and"changing of restriction on transfer of shares by chart modifying".The new Company Law does not mean the end but a new beginning. How to comply with the development of our country required the company practice, take the interests of all parties into account, and make a good balance between the autonomy of company charter and company law will be the perpetual subject deserving study.