Research On Shareholder Withdrawal System Of The Limited Liability Company

The limited liability company (for abbreviation,”LLC”) is attractive for its personcombination, the shareholders have mutual understanding, and they trust each other. Theyoperate the company carefully with their mutual emotion. While no one is perfect, the"Closure Form" of company often makes it hard for the small shareholders to withdrawalfrom company. In order to save the shareholders in difficulty, and also to abide by the essenceof company, the withdrawal system is established. The company needn’t to dissolute and cancontinue to make profit and avoid damaging the interests of stakeholders. It’s a better way tomake the capital in and out smoothly and also make LLC move forward to a more superiorposition.The Company Law in2005has established dissenting shareholder withdrawal system.We can see that the attitude of the legislators towards the system is from ban to allow and thisis a great progress. However, considering the system may bring in a series of badconsequences, the attitude of the legislators is still too cautious, and this makes the provisionstoo strict to apply and the scope is narrow and there is no program of this system. As a result,the channel for shareholders to get out of the company is still too narrow and can’t secure theshareholder well. We should get rid of the concerns about bad consequences and give theshareholder more freedom in a way from jam to unblocked while establish appropriatemeasures to protect the interests of the creditors.This paper contains four parts:The first part introduces in detail about the shareholder withdraw system of LLC. Firstly,give a brief description of the concept of withdraw. Secondly, give a comparison with otherconcepts as to define the concept clearly. Thirdly, put forward the theoretical basis whichpromotes the development of the system. Finally, point out the value of the system, that is, thesystem is a way urgently needed by the closure form and can make the person combinationmore perfect.The second part is research on the systems of foreign countries. Study systems ofGermany and the USA through historic method and comparative method mainly. And focuseson the special withdraw system of Germany on the basis of major reason and also the assessment right of dissenting shareholder in the USA. Finally, give a comment on entityprovisions and procedure provisions of the two countries and absorb some beneficialexperiences as to perfect our system.The third part is comments on shareholder withdraw system of LLC domestic. Firstly,review the legislative progress domestic and then analysis the provisions and point out theshortage of the system. That are, there is no comprehensive system and the entity provisionsare fuzzy and the scope is too narrow, the procedure provisions is absent, there is nopreceding procedure and procedure in detail is absent either and there is no provisions afterwithdraw.The fourth part put forward proposals to perfect the shareholder withdrawal system ofLLC and this part is the most important part. The proposal is given on the basis of research onforeign systems to overcome the shortage of domestic system. The three principles that ofmaintenance of business subject, exercise right moderately, protect small shareholders are thedirection the system must abide. The proposal contain two aspects, those are suggestionstoward entity provisions and procedure provisions considering protection of interests ofcreditors and point out the direction of the development of the system in a more broad way.