Research On Legel Issues Of The Defective Equity Transfer Of Limited Liability Corporation

With the rapid development of market economy, the company organizationis playing an increasingly important role in the commercial sphere, andequity has gradually become an important carrier of social wealth. Thelegal issues caused by equity transfer are becoming increasingly complex,since it involves so many parties’ interests, including but not limitedto the interests of company itself, shareholders, equity transferee, andcreditors outside the company. One of the most important features oflimited liability company is the it combined both of capital and persons,and the design of the equity transfer related system is more elaborateand complex. As a result, the practical problems caused by this is morediverse and difficult. Faced with many problems caused by defective equitytransfer, such as substantive defects and procedural defects of equitytransfer, the existing company law is not clearly specified, and this kindof problems triggers constant dispute in the theory and practice.The full text contains introduction, body and conclusion. The bodypart is divided into five chapters:Chapter one puts forward two core issues which is to be researchedin this paper from one typical case. The two core issues are the contracteffectiveness of defective equity transfer and the liability of defective equity transfer. And this part organizes the discussing outlines in thefollowing text. Chapter two firstly defines the legal concept andconnotation of defective equity transfer, and divided defective equitytransfer into substantive defects and procedural defects. Chapter threeaffirms defective investors still contain shareholder qualificationswhen it registers according to company laws. And after analyzing thetheories and practical approach, and combining with the commercial lawrules and civil law rules, the author sums up the method to identify thecontract effectiveness. Chapter four studies on how the three kinds ofprocedural defects influence the equity transfer contract effectiveness,which are the register defects, equity transfer without more than halfof the other shareholders’ agreement, and not meeting the shareholders’preemptive rights, and comes up with the points of this paper. Chapterfive sums up the method to identify the responsible party of substantivedefective equity transfer after review of the related views in theory andpractice, and discusses four ways to bear the responsibility: liabilityto fill the company capital, liability to creditors outside the company,liability to the non-breach original shareholders, liability when companypersonality is denied. In the same time, this chapter analyzes the legalconsequences when the equity transfer contract is invalid or revoked, fromthe perspective of whether the assignees participate in the company.