Research On China’s Shareholder Expulsion System Of Limited Liability Company

The System of Shareholder Expulsion is a method adopted by trustworthy shareholders in Limited Liability Company in order to resolve intra-corporate disputes.By utilizing voting right,they strive to expel the shareholder who is responsible for bringing the company detrimental impact.Compared with other methods,the System of Expulsion is an extreme and complete way to cut the links between the default shareholder and other shareholders as well as the company.For s:hareholders who perform their duties,this system gives them their initiatives back since there is no need for them to withdraw from the company to avoid further losses.The System of Expulsion is showing its advantages in foreign practice,while unfortunately;our"Law of Corporation" does not include this system.At present,we can only refer to the regulations from "Interpretation of Corporate Law 3",of which Rule 17 confirms the effectiveness of expulsion resolution.However,it sets a narrow scope for preconditions,and thus leaves few procedural details to be clarified.The rough design of "Interpretation of Corporate Law 3" causes much confusion when shareholders who are complying this system.Disputes are often seen in judicial rulings.China’s System of Shareholder Expulsion in Limited Liability Company is mixed in nature.When drawing strengths from foreign experiences,realities in judicial practices should be taken into consideration.The nature of this system should also be determined.