The Legal Analysis On Inheritance Of Shareholder’s Rights In The Limited Liability Of Company

Since the implem entation of the comm ercial registration reform, newly registered enterprises have seen a stea dy growth, and small and m edium-sized enterprises account for the m ost. As most of SMEs are limited liability companies, the solution to shareholder ’ rights transfer caused by inheritance has becom e a hot issue involving Company Law and Succession Law. Despite the definition of the inheritance of shareholder’s rights in Article 75 of th e Company Law of the PRC, cases in this field still tend to increase for recent years. Meanwhile, some new issues keep emerging in the judicial practice, such as the inheritance of shareholder’s rights of dormant shareholders, the shareholder ’s rights disposal for can celed institutional shareholders and the tim ing of s hareholder’s rights inh eritance. All this has weakened the implementing effect of the current laws and regulations to some extent. Then, what’s the root cause for so many di sputes on stock rights? What’s the nature of the inheritance of the shareho lder’s rights? Why do provisions related to shareholder’s rights inheritance in the Company Law have less implementing effect? How to push limited liability companies to deal with issues on shareholder ’s rights inheritance more efficiently?With these questions, this paper, in the context of increasing disputes on shareholder’s rights inheritance, systematically analyzed the rationality of the current provisions on shareholder’s rights inheritance in the Company Law, including academic analysis, comparison of related Chinese and foreign laws andanalysis of actual case. Based on thorough analysis, the author answered the above questions and find the root cause for more efficient shareholder’s rights inheritance and more rapid development of enterprises in the capital market.This thesis falls into five parts:In the first part, the paper analyzed the background of the subject and the significance of this research, with the focus on the current researches on the inheritance of stock rights in limited liability enterprises within and beyond China. Besides, the structure of the thesis and the research methods adopted were introduced.The second part referred to the current opinion of some scholars that “the root cause for disputes” on shareholder’s rights inheritance was the incomprehensive definition of “ shareholder’s rights”, resulting in two different opinions in China on inheritance of shareholder’s rights(pros and cons). Thus, this thesis introduced and interpreted the definition and nature of shareholder’s rights, and distinguish definitions of shareholder’s rights, shareholders and shareholder qualifications and explained the relations among them. Then, this thesis further revealed that the nature of stock rights inheritance was the balance of interests. Specifically, only the stock rights inheritance based on the balance of all parties’ interests could generate best efficiency. And the above-mentioned pros and cons actually implied the different attitudes of scholars towards the balance of interests in face of shareholder’s rights inheritance, and elaborated the valid choice in the shareholder’s rights inheritance.The third part focused on the investigation on the legislation of the shareholder’s rights inheritance in LLCs. On the one hand, the lateral investigation presented regulations in this regard in the civil law and common law system and analyzed the difference of related regulations in the Law of Company of the PRC and the two law systems. On the other hand, the vertical investigation introduced and analyzed the attempts and status quo in China on legislation related to stock rights inheritance, finding that Chinese regulations in this respect kept evolving with the time.The fourth part prioritized on cases of shareholder’s rights inheritance in LLCsfrom the perspective of judicial practice. This thesis first analyzed verdicts of such cases as a whole for recent five years in China, and then sorted difficult problems in the cases and summarized the root causes.The fifth part m anaged to provide som e suggestions for and solutions to problems in legislation and judicial practice mentioned in the previous parts.The last part, as the conclusion, containe d the summary of this thesis and the prospect for the future research in this regard.