Study On The Issues Concerning The Exercise Of The Preemptive Right Of The Shareholders Of Limited Liability Companies

With the continuous development of the market economy,the frequency of equity transfer is increasing,and equity disputes occur frequently in judicial practice.A perfect and sound equity transfer system is conducive to the healthy development and perfection of the company system,to shareholders’ recovery of investment costs,and to improve the efficiency of capital operation.A complete and perfect system of shareholders’ preemptive right is an indispensable part of the system of equity transfer.As limited liability companies have the characteristics of coexistence of people and capital,shareholders’ preemptive right is often used in practice to balance it.Article 71 of the Company Law of China stipulates that the equity transferred with the consent of shareholders shall be preempted by other shareholders under the same conditions.This is the formal provisions on the shareholders preemptive right of the Company Law,but this provision is too general,lack of standards on specific implementation.Although the judicial interpretation Ⅳ of the Company Law was issued to solve the conditions and procedures for the exercise of the pre-emption right of shareholders to a certain extent,it did not cover the aspects that the judicial practice pays more attention to,such as the exercise of regulations and restrictive conditions.This article starts from the Company Law and the judicial interpretation Ⅳ of the Company Law,discusses the nature,restriction and regulation of shareholders’ preemptive right in limited liability companies.by comparing the different academic point of view,analysis our country current law provisions on shareholder’s preemptive right deficiency,and put forward own viewpoint to the way of seeking solutions and improvement.This paper is divided into three parts to discuss the legal issues of shareholders’ preemptive right.First of all,this article discusses the basic concept,legal nature,participants and value of the shareholder’s preemptive right,and demonstrates the characteristics of the shareholder’s preemptive right and the attributes of the formation right.Secondly,it discusses that the scope of identification of "other shareholders" should not include the shareholder without objection from the perspective of the exercising subject of the shareholder’s preemptive right and the actual problems such as defective capital contribution and hidden capital contribution.combined with the provisions of the judicial interpretation Ⅳ of the Company Law,this paper discusses the controversial issues in the judicial practice,such as notice obligation,exercise period,and equal conditions,and concludes that the view of "relative equality" is more suitable for practical operation.Finally,this article starts from the problem of limits of priority right of shareholders,concrete analysis of the company’s articles of association autonomy and right to renege on the exercise of shareholders’ right of first refusal,figuring out the right of autonomy boundary and go back on our word limit the use of point,and targeted on the solutions of the limit shareholder’s preemptive right.