On Share Transfer Restrictions

In order to maintain People Combination in Limited LiabilityCompany, most countries and regions set up pre-emptive right to limitthe equity transfer to the third person outside shareholders. Aboutthere was no clear regulation that defined such kind of the Bund landdispute in the Corporate Law. This paper takes the Bund land dispute forexample to research On Share Transfer Restrictions by the Bund LandDispute as follows.Chapter1raises two questions from the Bund land dispute by a briefintroduction to the case, the focus of controversy and the first trial. Ispre-emptive right the optimal Share Transfer Restriction rule? How toanalyze the pre-emptive right in the Multi-level Share Transfer?Chapter2analyzes the Share Transfer Restriction rules to provideevidence in order to solve the above questions by making a contrastivestudy on continental law system and Anglo-American law system.Pre-emptive right rule of China is analyzed, including the definition andlegal qualitative, produce condition and inadequacies. For the issue “pre-emptive right infringement elements and effectiveness”, there areseveral opinions such as inactive opinion, invalid opinion, conditionalopinion, revocable opinion, effective opinion and pending validityopinion. This paper agrees with the pending validity opinion. Inactiveopinion ruled out the autonomy between the parties. Invalid opinionexcluded the right of articles of association. Conditional opinion takingthe statutory conditions as the attached conditions shall be deemed to benot qualified for that it cannot affect the effectiveness of the legal act.Revocable opinion is lack of theoretical basis. Effective opinion does notmeet the requirements of People Combination in Limited LiabilityCompany.Chapter3analyzes pre-emptive right in the Multi-level Share Transferon the perspectives of law application, the legal theory and economicimpacts. On the basis of above analysis, make a comment on the firsttrial of the Bund land dispute. This paper insists on that the first trial islack of exact legal basis. The shares transfer contract should be effective.Chapter4puts forward some perfect suggestion about share transferrestrictions. First, it is necessary to clear the legislation attitude toindirect share transfer contract effectiveness. This paper thinks that itshould be recognized but can be prescribed or authorized by theshareholders or articles of association to exclude its effectiveness.Secondly, it is necessary to specify a period for exercising ofpre-emptive right and an abolition of the shareholders agreement rule.Finally, this paper suggests making a clear a regulation to judge theeffectiveness of the contracts which are violated of pre-emptive rightwith pending validity opinion.