Defects Invested Equity Transfer Studies

The contribution is the basic obligation of shareholders. The defective capital contribution leads to defective shares. The transfer of defective shares refers to the effect of the contract and the liability of the defective contribution, which are hard to be solved in practice. The third judicial interpretation of the corporation law stipulate the rules which intent to solve these issues. But it is not enough. Based on the current laws,regulations and practice and the domestic laws, besides the views of scholars, the article is focus on the effect of transfer contracts and the liabilities after the transfer of shares. The article is divided into three parts:The fist chapter is about the basic questions. It refers to the scope of the article, which only research the defective shares result of the defective contribution.The second chapter is about the effect of defective share transfer contracts. Now, there are four different opinions about the defective transfer contracts, including invalidity theory, middle theory, voidable theory and valid theory. The defective contributor is the shareholder of the corporation and he has the right to transfer these shares. According to the fraud theory, when the transferor has the fraud activity, the transferee has the right to cancel the contracts.The third part is important. It concerned about the liability after the defective transfer, which is the difficult issue in practice. After analyzing the laws and regulations in different counties and the practice in china, the author obtained her own conclusion. The aim of this chapter is to solve the foundation of the liability of the transferor and the transferee. When the transferee knows the defective shares, the transferor,transferee and the promoters are joint responsible for the liability.The fourth chapter is about the remedy of the transferee. According to the third judicial interpretation of the corporation law, the transferee has the right to claim for compensation. The transferor has the liability for wrongs in conclusion of contract,liability for breach of the contract and the liability for warrant of defects.