Research On Restriction Of Equity Transfer In The Articles Of Association Of Limited Liability Company

Paragraph 4 of article 71 of the company with limited liability company rules limiting the powers of the equity transfer,from the articles of association of the autonomy of attribute,personality of limited liability company as well as the company’s independent legal status in three respects,the legislative design has a solid legal foundation,fully considering the actual needs of companies in the development process,in accordance with the company autonomy legislation trend.However,due to the lack of supporting judicial interpretation or official legislative reasons to clarify and fully explain the content of the provisions,the connotation of the legal provisions is in a general and vague state,therefore,the validity of the articles of association of limited liability companies to restrict the transfer of equity has been controversial both in theory and in practice.At the beginning of the article,based on listing the three common types of articles of association of limited liability companies to restrict the transfer of shares in practice,the author draws out the biggest problem of the articles of association to restrict the transfer of shares in the system--the validity dispute.Whether in theory or in practice,the validity of these clauses has not been settled.Analyzing the reasons behind the problem is beneficial to solve the dilemma better,and it is also the first step to conduct effectiveness analysis.The second part of this paper is a preliminary study of the reasons for the dispute on the effectiveness of the articles of association.Theoretically,the causes of effective dispute mainly have three,one is the conflict between the free transfer of equity principle and the personality of the limited liability company,the other is the conflict between to buy or sell the free will of shareholders and respect the company’s articles of association autonomy,the third is about the effectiveness of the original articles of association and articles of association amendment space profession long-term lack of consensus.From the perspective of practice,effectiveness conflicts mainly come from the lack of uniform effectiveness standards in judicial adjudication.A few laws cannot provide comprehensive and accurate guidance for judicial adjudication.At the same time,the common capital majority resolution method leads to the minority shareholders in an embarrassing situation and unfair treatment,which is also one of the reasons for the effectiveness of the articles of association restrictions.Although there is no clear judgment system and relief system for the effect of restriction of share transfer in the articles of association in China,there are abundant experiences about restriction of share transfer outside China.Germany,the United States and Japan,as not only economically developed,have a lot of research on the regulation of restriction on equity transfer.The "reasonableness" standard in America,the core interests principle of shareholders in Germany,and the company buyback and designated purchase system in Japan are all based on the experience of countless practices,which will be of great benefit to the study of the autonomous boundary and the validity judgment standard of the articles of association restricting the transfer of shares.The last part of the article is the author of the articles of association to limit the equity transfer system put forward some suggestions to improve.First of all,according to the articles of association,the prohibition of equity transfer,compulsory equity transfer and other aspects of the restriction of equity transfer should be three categories to construct a specific discretionary benchmark.For the prohibited category,it is necessary to examine whether the articles of association reserve exit channels for restricted shareholders;for the compulsory category,it is necessary to examine whether the share transfer price is reasonable;for the review of the amendment limits of the articles of association,it is necessary to examine whether the revised terms are in good faith for the purpose of the overall interests of the company.Finally,the application scope of the voting right avoidance system and improvement the exit mechanism of minority shareholders can be moderately expanded to protect the vulnerable shareholders with limited rights and alleviate the shareholder suppression caused by the capital majority voting rule.