The Case Analysis Of Fuxing Company V.Changye Company,etc. Dispute Of Equity Transfer Contract

The "Company Law" and judicial interpretation does not stipulate the issue of shareholder pre-emptive rights dispute arising from indirect equity transfer.There is no clear legal guidance for such problems in judicial practice,so that judges can only make judgments in accordance with the "Contract Law" and other provisions.Fuxin Company vs.Changye Company and other equity transfer contract disputes are a classic case involving indirect equity transfer and shareholder preemptive rights.There are three main disputes in this case: First of all,whether Fuxin has the right of first refusal.Secondly,whether the framework agreement and its supplementary agreement,the equity transfer agreement are valid.At last,whether it can make an expansion explanation or analogy interpretation of the equity transfer of Article 71 of the Company Law.According to the law,combined with the nature and applicable conditions of the shareholder's right of first refusal,and the actual situation of the case,the following conclusions can be drawn by using the legal interpretation method:Firstly,according to Article 71 of the Company Law,the shareholder's right of first refusal applies.The scope is limited to the company's shareholders,and the indirect transfer of equity should not be applied to Article 71 of the Company Law.Combining the characteristics of legal person independence and balancing the interests of all parties,it is concluded that Fuxin Company does not enjoy the right of first refusal.Secondly,the framework agreement and its supplementary agreement,and the equity transfer agreement are the true meanings of the equity transferor and the transferee.Each party has civil capacity,and the content and purpose of the agreement do not violate the mandatory provisions of laws and administrative regulations and there are no other invalid reasons,so it should be deemed to be valid.At last,the civil law interpretation method has its applicable order,which should be applied first.The explanation of expansion explained that when the meaning of the words cannot be fully explained,other interpretation methods are considered,which is applicable when the legal provisions are too narrow to indicate the true meaning of the legislation.The analogy is applicable when there are legal loopholes.Article 71 of the "Company Law" does not exist in a narrow situation,there is no legal loophole,and the textual interpretation can fully understand the clause,so there is no need for expansion explanation or analogy.Indirect equity transfer greatly challenges the characteristicsof human rights of limited liability companies.When analyzing this problem from the perspective of law and economics,it will be found that its human characteristics are gradually weakened in the context of the company's pursuit of profit.In order to protect such characteristics,when it comes to balancing the interests of companies,between shareholders,and between companies and shareholders,it is a better choice to develop a reasonable and improved company charter or shareholder agreement.