Research On The System Of Shareholders Losing Their Rights In Limited Liability Companie

The principle of removal of a company’s name as stipulated in item 17 of the "Provisions of the Supreme People’s Court on Certain Issues Concerning the Application of the Company Law of the People’s Republic of China(III)"(hereinafter referred to as "Interpretation of the Company Law(III)")is easily circumvented due to the narrow scope of the system.The introduction of the system of shareholders’ default under Article 51 of the Draft Revision of the Company Law(Second Review Draft)cleverly solves this dilemma.The shareholder default system and the shareholder delisting system are similar in terms of the application of the prerequisites for the application of the provisions on the violation of shareholders’ obligations to make capital contributions,and have a progressive relationship in application.Article 46 of the Company Law(First Review Draft of the Revised Draft)is the first explicit provision of the rule of shareholders’ lapse of rights,and Article 51 of the Company Law(Second Review Draft of the Revised Draft)further improves the system of lapse of rights,and the general system of shareholders’ lapse of rights enters the legislative agenda of the company,and the system of shareholders’ lapse of rights is formally subsumed into the normative system of the Company Law of China in the process of this revision of the Company Law.The board of directors of the company,through the statutory procedures,deprives the shareholders of part of their equity,thus urging the shareholders to complete their capital obligations and pay their capital in time,reflecting the principle of conformity of rights and obligations and the commercial efficiency principle,in order to achieve the effect of guaranteeing the capital enrichment of the company.However,there are some problems at present,because the rule is new,although in the legislative and judicial level to draw on the relevant experience of the shareholder removal rules,but the loss of rights rules itself in the theory and practice has its own special characteristics,still need to further continue to improve the work,so that the shareholders loss of rights system construction and interpretation work more specific and perfect.The first part of this paper focuses on the lapse of power system and illustrates the importance and value of the lapse of power system.The first part starts from the theoretical basis of the shareholder lapse of rights system.This part elaborates the legislative history of the shareholder disenfranchisement system,and explains and argues the necessity of the disenfranchisement system and its functions.By analyzing the similarities and differences between the two systems,the shareholder disenfranchisement system and the shareholder delisting system,and the cascading relationship existing between them,this part strengthens the argument of the necessary value of the existence of the shareholder disenfranchisement system.Since the wording of "lapse of authority" appears for the first time in the draft revised company law,there are still many issues that need to be discussed.The main issues are the scope of the applicable prerequisites,the applicable procedural elements and the legal effects.The second part analyzes and demonstrates the premise of the application of the loss of rights regime.Due to the unique nature of the disenfranchised rule,it is necessary to clarify the manner in which it applies in certain special cases.Specifically,it includes the types of applicable companies,applicable circumstances and applicable methods,and finds the most suitable applicable premise norms for China through combining academic analysis,extraterritorial legislation and judicial practice.In the third part,the procedural elements of the loss of rights system are sorted out and analyzed,and the time nodes set by the rules are analyzed and demonstrated,and the shareholder loss of rights rules can also be applied to the applicable procedures before the establishment of the company.The subject of the resolution on loss of rights was clarified,and the necessity of setting a grace period and the starting time point for loss of rights was also explained.The fourth part elaborates on the legal effect,the consequences of the lapse of rights system to the lapsed shareholders,the company and the remedy for the lapsed shareholders under necessary circumstances.The company should comply with certain rules for the disposal of the corresponding shareholding in order to comply with the principle of maximization of benefits,and the shareholder who loses his rights at this time does not mean that he only loses his corresponding shareholding,and the corresponding legal responsibility is assumed.In the stage of loss of rights,after the company sends a notice of loss of rights to the shareholder who has lost his rights,the disposal of the corresponding equity and the exercise of equity rights within the share of loss of rights should also be clarified.Defective shareholders should bear the corresponding responsibility after obtaining the legal consequences of the loss of rights,and also to protect their own rights under certain circumstances of the remedy.