A Limited Liability Company Funded The Transfer Of Legal Issues

The transfer of the shareholder's capital of the company of the limited liability (LTD. for short later) is also called the transfer of the stock rights .The freedom of the stock rights' transfer is the universally basic principle in the company law among many nations. However there is an exception on this freedom of the transfer especially for the LTD, which is the main concern of the paper. The author intends to deal with some particular legal matters in the transfer of the stock right ( or the transfer of the shareholder's capital)of the LTD.The first part of the paper concerns with the restriction condition and other relevant questions. Because of its privately personal and closed attribution, the LTD. places some restriction condition on the transfer. In the nations of the continental law system, almost all the nations do like this in their company law, such as the unanimous consent of all the shareholders is the prior condition of the transfer towards any person outside of the body as to prevent the break of the trust relationship between the members by the possible newcomers. Meanwhile , those who oppose the transfer have to purchase the sum of the stock rights to enable the shareholders esp. the minor shareholders to reward their principle invested and withdraw from the company. In nations of the Anglo-American law system , the private or closed corporation is the counterpart of the LTD. in the continental nations , and there is also restriction for the transfer of the stock rights , which is the most characteristic nature of the private corporations of the Anglo-American nations. The specified restriction condition is always the important content of the private corporation's articles. In UK. there are two main methods of the restriction : first one is that the corporation authorizes the board of the directors to refuse the registration of the transferee and the other shareholders' option to purchase. In USA, the corporation imposesthe restriction on the transfer by authorizing the corporation or the other shareholders the right of denial , the right of option , the right of the consent and the purchase contract between the shareholders and the corporation. As long as there is no frustration for the due expectation of the shareholders esp. the minor shareholders, the courts incline to admit the legal effect of the transfer's restriction conditions created by the corporations themselves.Contrasting with the relevant regulations from the other countries, there are no doubt the visible defects in the regulations of our country .The most obvious problem both in the theory and in the practices is that: there is no rule concerning with the legal effect of the agreed transfer condition in the company article or shareholders' contract. , since there is no relevant regulation in the company law or agreed transfer condition is contrary to the regulations of the company law. On that point , by analyzing the structure of the company law , the author intends to indicate that the transfer condition should be some sort of authorizing norm or supplemental norm which acts as instructive or exemplary norm in the regulation if there is some in the company law. As long as there is no violation to the compulsive law principle, the agreed condition should be valid.On all the theory above, what is the legal effect if the shareholder doesn't be consistent with the transfer condition. It is a controversial question for both theoretical and practical area. The author here gives some representative opinions nowadays including the theory of the invalid legal act, the theory of the revocable act, the theory of the conditioned legal act and the theory of the no-fixed legal effect act. In the author's opinion , the transfer inconsistent with the transfer condition is the kind of the no-fixed legal effect act, which is similar to the unauthorized disposal .But there is one difference here between them that the2transfer inconsistent with the transfer condition is lack of the consent of the other shareholders.The second part...