Research On The Legal Effect Of Shareholders Of Limited Liability Company Exercising The Preemptive Right

The "Company Law" establishes a system of pre-emption rights,that is,the shareholders of a company can obtain the right of the transfer of equity over a third party in the procedure of external equity transfer.However,its regulations are too principled,so the operation is not strong in judicial practice,leading to a large number of "different judgments in the same case" in judicial practice.In response to this situation,the Supreme People’s Court has issued the "Company Law Interpretation(4)",which provides a more detailed interpretation of the system in order to improve its operability,unify judicial decisions,and settle disputes.The latest judicial interpretation has made detailed provisions on the period of exercise of the right of pre-emption and the confirmation of "equal conditions",but the determination of the legal effect of the exercise of the right of pre-emption by shareholders is still blank.In areas with high incidence of judicial disputes and academic discussions,the author believes that in the context of the latest judicial interpretations,it is necessary to conduct further research and discussion on the legal effect of the exercise of the right of first refusal.Therefore,this article starts from combing the existing judgment documents and analyzes the different determinations of the legal effect of the exercise of the right of preemption by the courts.On this basis,the legal effect is mainly divided into internal and external aspects.By combing the opinions of court judgments,it is found that the main reason for different judgments in the same case" is that different courts have different judgments on the nature of rights.Therefore,in order to further study the legal effect of shareholders’ exercise of pre-emption rights,it is necessary to characterize their legal nature.Since the birth of the pre-emption right system,the debate about its nature has never stopped.Before the"Judicial Interpretation of the Company Law(4)" came into effect,the "right to form theory" became the mainstream view.However,the "Judicial Interpretation of the Company Law(4)" newly added transfer shareholders to enjoy the "right to repent",once again aroused intense academic discussion.Many scholars regard it as supporting evidence for the right to claim theory." Starting from the legal basis of the right of preemption,the author investigates the legislative purpose and value pursuit of its system design,analyzes the two theories and derives the application,and draws the conclusion that "the right of formation" is more in line with the essence of the preemptive right.The right of first refusal is defined as the right of formation.Based on this premise,the legal effect of its exercise is divided into internal and external aspects.The internal effect is manifested in the outward transfer procedure,when other shareholders exercise the right of first refusal to conclude an equity transfer contract with the transferring shareholder on "equal conditions".The external effect is mainly manifested in two aspects:on the one hand,whether the effectiveness of the equity transfer contract between the transferring shareholder and a third party will be affected by the exercise of the preemptive right by other shareholders;on the other hand,the issue of the ownership of the transferred equity after the exercise of the preemptive right.Although the right of first refusal is the right of formation,its exercise will not affect the effectiveness of the equity transfer contract that has been reached between the transferring shareholder and the third party.The transfer contract concluded between the two is an expression of the true intentions between the parties.The parties have the freedom to conclude a contract.If there is no invalidity provided by the law,it shall be deemed valid.Confirming the assignment contract as valid is also conducive to the protection of the interests of third parties.After the shareholder exercises the right of first refusal,the transferring shareholder shall establish two effective equity transfer contracts with other shareholders and a third party.How will the equity be vested based on this?Under normal circumstances,the contract between the transferring shareholder and other shareholders should be performed first,and other shareholders obtain the transferred equity.For the losses caused by the third party,the shareholder can claim the liability for breach of contract and claim damages in accordance with the effective equity transfer contract.The exercise of any right is not borderless,so the author proposes that the exercise of pre-emption rights should be reasonably restricted,and the boundaries of its exercise should be clarified,so as to balance the interests of the transferring shareholder,other shareholders of the company,and third parties.The legitimate rights and interests of the three can be better protected.