On The Exercise Of The Pre-emptive Right Of Shareholders Of Limited Liability Companies

The system of the pre-emptive right of shareholders of limited liability companies is an important system of equity transfer set out in Article 71 of the "Company Law",and for articles issued in practice,the contents of share transfer notifications in the course of exercise of the pre-emptive right of shareholders are the same conditions.There is no clear rule on the issue of the determination and the transfer of shares by shareholders.Relevant issues are often seen in judicial practice.The lack of legislation has also caused local courts to make different judgments in the face of similar problems,which not only harms the interest of the parties,but also is not conducive to the formation of a stable judicial order.In 2017,the "Judicial Interpretation of Company Law(?)" was promulgated,and the issue of notification of equity transfer,determination of equivalent conditions,etc.were refined,and for the first time,it was clear that shareholders had the right to waive the transfer of shares.This article starts with the judicial practice,and mainly discusses the issues related to the exercise of the right of preemption of shareholders in the Judicial Interpretation of Company Law(?),mainly through the comparison of case studies and literature analysis.In addition to the introduction and conclusions,this article is divided into four chapters.The first chapter of this paper first briefly describes the typical cases involving the pre-emptive right of shareholders in judicial practice,evoking the issue of transferring shareholders' notice obligations and the issue of shareholders abandoning transfer.In this chapter,the author also studies the function of the shareholder's preemptive right system at the value level.This paper analyzes the "human fitness"function of the preemptive right system maintenance company under the coexistence of "human fitness" and "equal investment" of the limited company,and proposes that the limited liability company should be "funded" based on the " "Human cooperation"is not only to respect the human will and the closeness of the company,but also to arbitrarily expand it.In addition,in the context of the new legislation,attention should be paid to the preemptive right system in addition to maintaining the “human fit” of the limited company,which has the benefits of balancing the assignor,the transferee that intends to collect the purchase rights,and other shareholders.Relationships to form a function of the reasonable price of equity transfer.In the second chapter,the article discusses the issue of notification of share transfer and the exercise of the right of preemption.With respect to the method of notification of equity transfer,other reasonable notification methods should be respected on the basis of the principle of “written notice”.The content of the notification of equity transfer shall include the price,the payment method,and the transferee status,etc.Substantive changes in the contents of the transfer notice shall be notified separately.However,there is no need to impose mandatory rules on the time limit for the transfer of shareholders' performance of notice of equity transfer.The preconditions for the exercise of the right of preemption have been summarized through cases.Regarding the issue of "identical conditions",the proposal of other shareholders for the transfer of equity can only be accepted or not accepted,and no other conditions can be added,and the same conditions should not include conditions of the nature of the person.As for the exercise of the right of preemption in the special case of equity auction,this article first affirmed its legitimacy,and proposed that an auction should not beused as an example?The role of the “Letter Inquiry” should be emphasized,and based on the actual situation,explore more appropriate ways.The third chapter of this paper discusses the transferee's "right of repentance".This problem directly relates to the determination of the nature of the shareholders' right of preemption.Therefore,this chapter first discusses the nature of the right of preemption.The author believes that from the actual point of view,it is not appropriate to adopt the "right to expectation." The "claim right" seems reasonable,but there is a conflict with the definition of the pre-emptive right of shareholders.In contrast,the "formation rights theory" better reflects the nature of the pre-emptive right of shareholders.The author then analyzed the significance of the “right to repent” and pointed out that on the basis of maintaining human rights of the company,it respected the freedom of transfer of shareholders.At the same time,it is also proposed that the "registration right" may be restricted through the company's articles of incorporation or agreement design to prevent the abuse of power.With regard to the legal responsibility of shareholder exercising "the power of repentance",the author believes that the shareholder's waiver of the transfer only excludes the application of the "continuing duty" of the breach of contract under the "Contract Law" on the basis of the "formation right theory",without excluding damages.Such as breach of contract responsibility,which can increase the cost of destroying the shareholders of the contract,balance the protection of the transfer of shareholders and other shareholders.In the fourth chapter of this article,combining the foregoing cases,the author believes that in the event that the transferring shareholder clearly defines the content of the equity transfer transaction price,setting the bidding conditions in the transfer notice does not infringe on the other party's preemptive right,and other shareholders want to exercise the pre-emptive right of shareholders.Should be clearly stated within a reasonable period of time.Finally,combining with judicial interpretation and theoretical theory,this paper analyzes the value orientation of the preemptive right system.