A Study On Legal Issues Of Shareholder’s Withdrawal From Limited Liability Company

The limited liability company is one of the existence of companies, which occupies huge proportion among our countries’ enterprise categories. This kind of company can find favor in most investors’ eyes. However, it is a difficult problem to solve: how to back out of this company operation legally with little damage to the shareholders’interests. At the same time, most scholars are interested in exploring the topic: how shareholders withdrawing shares in the limited liability company.The limited liability company has its own features, capital joining and human joining.To human joining, it usually has few shareholders with inseparable ties and higher degree of trust. But there has closure of itself,different from the openness of limited company.In addition, share options in Ltd. cannot be free flow in the market, or trade publicly. In current law practice, large shareholders in Ltd. would have more rights to say according to the Majority Rule, influencing the corporate behaviors, so as to gain their strategies. While the interest of shareholders who have less rights to say would be damaged. Therefore, it is desperately necessary to provide relief for them. At present,there is regulation about shareholder withdrawal in legislation of many countries, also creating the directive precedents during the process of the practice and exploration in the common law legal system. "Company Law",enforced by our country in 2005, was added new regulation about shareholders withdrawal in Ltd. with only one legal provision, the 75th. The situation is very complicated about shareholders withdrawal in the actual operation process. However, "Company Law" is general on the corresponding procedures, lacking of substantive provisions. Accordingly, this paper analyzes from the concept and theoretical basis of shareholder withdrawal, through the legislation and practical experience of Germany, Japan and the United States, reviewing the current defects of the domestic limited liability companies’ shareholders withdrawal, putting forward the corresponding improvement measures so as to protect double benefits of the company and shareholders who withdraw share. All in all. this paper is divided into four parts:Firstly, overview of shareholder withdrawal. On the one hand, from the concept and characteristics, it makes a specific meaning of withdrawal clearly through comparing with other similar concepts. On the other hand.the paper introduces the theory of withdrawal’s legal basis and provides theoretical guidance for the solution of shareholders’ withdrawal problems in the Ltd.Secondly, analysis of relevant regulations in foreign countries and the concrete measures can be used for reference in China. It mainly analyzes the rules of shareholders’ withdrawal in America,Germany and Japan. These three countries have each own characteristics in withdrawal provisions, while there are a lot problems in China’s current regulations. Therefore, China can draw lessons from the specific measures of these three countries.Thirdly, the legislative status and defects of shareholder withdrawal in our country.Combining with the specific provisions of the current "Company Law",starting from the present situation, this paper finds the defects in the provisions, and provides suggestions to guide the problems of shareholders withdrawal resolved successfully according to the balanced need of shareholders, company and creditors.At last, conclusion. This part summarizes the main content and options of this paper comprehensively. On the basis of emphasizing the important function of shareholders, it further clarifies the concrete measures to solve the legal problem of the shareholders’withdrawal from the limited liability company.