The Defect Of The Theory Of Equity Transfer

It’s an important kind of investment to buy share, and the share transfer is also an effective management to a corporation. In the process of share transfer, if the transferor, at the dominant position of share and corporate information, hides the information, it will restrict the purpose of share transfer contract. The dispute that transferor fraud transferee has become hard case in the court, so it’s necessary to research the topic. Meanwhile, the conclusions about the research could supply a better legal safeguard to the invest market and the corporate governance.This paper studies the limited corporation share transferred to outside of its shareholder. The thesis contains five parts except exordium.Part1is the concept of the defect share transfer. It mainly explains transferor doesn’t finish the duty of performance in the process of share transfer, and it causes transferee suffer deception and trapped in mistake. It gets rid of the behavior that the transferee doesn’t fall in mistake and make wrong acts.Part2introduces the content of defect behaviors about share transfer. The transferor does not finish its duty of performance and has faults in their mind, so transferee is trapped into mistake. It’s indispensability for the concept in these facts.Part3is the legal effect about defect behaviors about share transfer. I think it is avoidable act and could be annulled only by transferee on that basis of autonomy of private law.The fourth part introduces the duty of defect behaviors on share transfer. The author thinks the transferor is the real person who should take the responsibility. At the same time, the defect behavior from transferor is act of nonperfomiance in the debt law general mle debt of law system. So the transferee has right of rescission, defense, and compensation for damage in obligatory right, and so on.In the end, I think the Supreme People’s Court of PRC should issue guiding case about defect share transferring. Because it’s more difficult to deal with this legal problem by legislation which has to go through strict procedure and bring immense to the existing social order, guiding cases would avoid it. Meanwhile the advantages from guiding cases could fill loopholes in the law of motion and uniform law applicable standards, and to guide the lower court in trials.