On The Expulsion Of Shareholder Of The Limited Liability Company

It is a blank of shareholder expulsion system in Limited Liability Company in legislation. In order to standardize the judgment standard of court to shareholder expulsion case, the Supreme People’s Court published Regulations Applicable to Several Problems in Company Law of the People’s Republic of China (February 16,2011)(Hereinafter referred to the Interpretation). According to the Interpretation, the shareholder will be expulsed when the shareholder in Limited Liability Company fails to perform all contributions or draws out all contributions illegally. Due to narrow application scope, the Interpretation is easily to be evaded and its effect is discounted heavily. The paper intends to research whether the application scope of expulsion system may be enlarged, expulsion procedures and preventing abuse of expulsion right, etc.The paper discusses from four aspects:overview of shareholder expulsion system in Limited Liability Company; expanding the application scope of shareholder expulsion system; shareholder expulsion procedures; how to prevent the abuse of shareholder expulsion system. The paper draws the conclusions that the scope of shareholder expulsion causes may be expanded to:1. The shareholder only performs a part of contribution obligations; 2. The shareholder loses the qualifications or identity stipulated in the company constitution; 3. The shareholder abuses the rights and causes material damages to other shareholders; 4. The shareholder invests in other company competing with the company in the form of hindering the company; 5. Other material causes stipulated in the resolution of board of shareholders or company constitution.Part one introduces the concept of shareholder expulsion system, current legislation situation, existing problems and legal consequences after expulsion. Part two researches the expansion of application scope of shareholder expulsion system by summarizing shareholder expulsion judicial practice and referring to the similar expulsion rule domestic and abroad, draws a conclusion that the expansion of application scope of shareholder expulsion system is feasible, and preliminarily discusses the legislation of shareholder expulsion system. Part three introduces the design of shareholder expulsion procedures. The risks in expulsion randomness will be reduced and the expulsed shareholder will obtain fair shake upon the design of expulsion initiation, voting and effect. Part four discusses the prevention of abuse in shareholder expulsion system from the necessity, interpellation, defense and lawsuit...