Legal Application Of Shareholders’ Preemptive Rights In Limited Liability Companies

The unification of human joining and capital cooperation is an important feature of limited liability company,which is different from the partnership enterprise and the joint stock company.This feature is also the decisive factor of restricting the foreign transfer of shares of limited liability company in our company law.The system of shareholder’s preemptive right is a kind of legal system of restricting the foreign transfer of shares in our company law.As a kind of right with property attribute,the transferability of equity is no doubt the absolute truth,but the influence of the transfer of equity on the human joining compatibility of limited liability company can not be ignored.The preemptive right of shareholders is the product of the trade-off between the two legal interests.On the one hand,the system should guarantee the smooth transfer of equity,on the other hand,the system should protect the trust relationship between the internal shareholders not be easily reversed.The plurality of the purpose and function of the system results in the complexity of the preemptive right system.Therefore,there are many disputes about the subject of shareholder’s preemptive right,the exercise procedure and the legal effect in judicial practice.Based on the specific disputes arising from the preemptive right in judicial practice and the background of the promulgation of the Fourth Interpretation of the Company Law,this paper sorts out the problems arising from the application of the preemptive right of shareholders,and proposes solutions to relevant problems based on existing legal norms.The main contents of this paper are as follows:The first part discusses the interest structure and system function of shareholder’s preemptive right,which provides theoretical guidance for the specific application of the system of shareholder’s preemptive right.The shareholders’ preemptive right system originates from the protection of the contractual nature of limited liability companies,but its interest structure and institutional functions are by no means limited to this.The contractual nature of limited liability companies is equally important.Ensuring the transfer interests of transferred shareholders and the liquidity of equity,providing a reasonable competitive mechanism for external shareholders to enter the company,and providing an optimal way to form a price for the transfer of equity are the proper meanings of the shareholders’ preemptive right system.The second part discusses the realization path of shareholder’s preemptive right system function.This paper holds that the effectiveness of the equity transfer contract is not a sufficient condition for the equity change.The parties to the equity transfer should take the restrictions on the external transfer of the equity as a necessary condition for the equity change,take the time when the equity transfer contract takes effect and the completion of the restrictive procedures of the equity transfer as the point of equity change,and take the shareholders’ preemptive right directly acting on the equity change link to protect the company’s human contract,and should not negate the effectiveness of the equity transfer contract.The third part discusses the triggering premise of shareholder’s preemptive right.Shareholder’s preemptive right only occurs when the shareholder transfers the company’s equity to a third person other than the shareholder.In the absence of other provisions in the articles of association,the transfer of equity in Article 71 of the Company Law should not be limited to the sale of shares.The transfer of equity is carried out by means of non-consideration such as gift,bequest and legacy support agreements.Other shareholders may also claim the preemptive right.At the same time,it is inappropriate to extend the effect of legal shareholder’s preemptive right to indirect acquisition by over protecting company’s personal compatibility.Companies with special requirements for corporate compatibility can make the indirect acquisition of equity subject to the limitation of preemptive right through the design of articles of association,but it is inappropriate to exist as the content of legal preemptive right.The fourth part teases out the micro-controversial issues in the exercise of the right of preemption.Combining with the specific cases of courts,this paper discusses the transfer notice,exercising subject,equal conditions,exercising period,right of repentance and the effect of non-bona fide equity transfer in the implementation of the shareholder’s preemptive right system,in order to analyze the progress and shortcomings of the Fourth Interpretation of the Company Law.