Judicial Application Ofthe Bona Fide Acquisition InEquity Transfer

It has been three years that article26and article28in "Provisions of the Supreme People’s Court on issuesconceming the application of Company Law of the People’s Republic of China" as the form of judicial interpretation to introduce the bona fide acquisition in "Real Right Law" article106into Equity Transfer. It is only a principle regulations, the fact that the institutional innovation could be applied or effectively solve the equity transfer in daily life should to be verified.Empirical statistics based on quantitative analysis proof that the continued existence of bona fide acquisition in equity transfer is necessary. Meanwhile, refining standards of the bona fide acquisition in equity transfer based on doctrine or judicial practice and making a induction from identified standards of typical cases in statistical sample to provide data to support to change the principle into rules. The paper is divided into four parts.The first part:the reasonable and necessary foundation of the bona fide acquisition in equity transfer. On one hand, the principle of shareholders’limited liability and equity torsion with low cost and high yield meet the claims of the rational investors in economic life concerning the safety investment and the pursuit of maximizing the benefits. On the other hand, the equity properties and legal representation of the equity owner can explain its theoretical feasibility.The second part:Legal requirements of Judicial Application of the bona fide acquisition in Equity Transfer combining doctrine and judicial practice. Four requirements are:transferor is the legal registration rights holders without the right of disposal actually; the transferee is a third person with bona fide; reasonable consideration; completed the change of registration. Then combing the legal consequences.The third part:induct and collate typical cases in the statistical sample to expand the content of identified standards of legal requirements. how does the judge chose when there is a conflict between the efficiency of equity transfer and the shareholders’ pre-emptive right, efficiency or equity.The fourth part:summarize and restate significance of the topic...