Restrictions On The Equity Transfer Of Limited Liability Company

Restrictions on equity interest transfer of limited companies is arranged by restricted by corporate law and corporate charter. Restriction rules in law is not mandatory so corporate charter can set up various of codes that differ from legal provisions and both have binding force. Internal and external restrictions are different since they have different impacts on limited companies. The structure of this paper distinguishes internal transfer from external transfer. After showing restriction phenomenon it analyzes theoretically,including the present situation and its improvement.Except the introduction and the conclusion,this paper consists of five chapters.Chapter one shows the phenomenon of restrictions on internal and external transfer by corporate law and corporate charter.Chapter two analyzes the nature of equity transfer. In order to explorer nature we should go back to the source. The nature of company is connected with the nature of shareholder and chapter,leading to different understandings of equity and equity transfer. So here I analysis the nature of company,charter,equity and rules of equity transfer limitations.The third chapter examines the legitimacy bases of the limitations set by law and charter. Limitations in law is supported by Coase Theorem, the seal of the limited company and the externality of equity transfer. Legitimacy bases of the limitations in charter can be unfolded from two aspects:the authorization of company law and autonomy spirit of corporate.Chapter four is about the specified requirement in terms of law and charter. The legal constraints include consent right and pre-emption right. The requirements in charter is based on the corporation itself, it might be more stringent or looser than law term. Only in the balance of state force and the company autonomy can we define the connotation of the restrictions accurately.The last chapter provides some advices on the improvement of equity transfer system. Limitations set by the original charter and subsection should be suitable different rules. It also suggests that a reasonable time is needed for the fulfillment of compulsory purchase obligation. Making clear the meaning of under the same condition and setting a period of exercising the right of pre-emption is also helpful measure.