Research On The Effectiveness Of Restricting Equity Transfer Clauses In Limited Liability Company’s Articles Of Association

Since the amendment of the Company Law in 2005,the law has allowed the shareholders of limited liability companies to carry out independent restrictions on the transfer of equity through the articles of association,but it has not clearly defined the degree of permitted restrictions,nor has it made supporting institutional arrangements in respect of the autonomy of the articles of association and the protection of the balance of shareholders’ equity and property rights.This situation not only leads to different opinions among scholars on the boundary of restriction of equity transfer in the articles of association,but also makes the judges lack of standards in dealing with the relevant disputes in the process of adjudicating cases.No conclusion has been reached so far,but in the process of studying,there are not only voices calling for drawing lessons from foreign systems,but also advocates who simply identify the effective path by the dichotomy of the initial regulation and the revised regulation.Based on empirical studies,sorting and discussion of foreign practice,this paper tries to respond to the referee bifurcation in practice,and solve the problem of clarifying the border of the limited equity transfer clauses in the articles of association and solving the fuzzy identification standard of its effectiveness,from the perspectives of " path of validity identification" and "complementary system building".In the part of "Path of Validity Identification",the company’s articles of association are clearly divided into unanimously agreed articles of association and non-unanimously agreed revised ones.The former can be regarded as a contract due to the existence of consensus basis,and the transfer of shares can be prohibited in addition to general restrictions on the transfer of shares.Since there is no consensus basis for the latter,it is more like the act of resolution,which cannot provide for the extreme restriction of the shareholder’s equity property rights,such as the prohibition of equity transfer.However,considering that the amendment of the articles of association is the natural result after the corporation development to a new stage,the dissident shareholders should be given right to withdraw when recognizing their right to prohibit the equity transfer.Secondly,in view of the fuzzy qualifying clauses concerning transfer clause of general restricted equity and prohibition of equity transfer clause,this paper introduces the standards of rationality,namely,exploring the recognition path of restricted equity transfer clause from the perspective of whether the setting of transfer standards of equity rights is reasonable or whether the approaches taken are necessary for the realization.The "complementary system building" proposes to establish the "fair price" principle of share buyback on the basis of improving the mechanism against shareholder withdrawal.In addition to the introduction,this paper contains four other chapters.The second chapter combs the theoretical basis of the articles of association restricting the transfer of shares,clarifies the contractual nature of "consensus articles" and the autonomous nature of "non-consensus articles",and clarifies the relationship between Clause 4,Article 71 of the Company Law and relevant articles.The third chapter makes an empirical analysis of the disputes in practice about the articles of association restricting the transfer of stock rights.Chapter four introduces relevant systems and adjudication experiences of representative countries with different extraterritorial legal systems.Chapter Five,on the basis of the discussion on the choice and rejection of the foreign experience,discusses the way to review the effectiveness of the articles of association restricting the transfer of shares according to the problems concluded in the empirical analysis,and puts forward some suggestions to improve the relevant complementary legal systems.