How does the company buy shareholders' shares?

Legal analysis: A company can buy shares of shareholders by reaching an equity purchase agreement. After the company purchases the shareholders' shares, it shall transfer or cancel them within six months. In principle, a company may not buy its shares. However, if a shareholder disagrees with the resolution of merger or division made by the shareholders' meeting and asks the company to purchase its shares, the company may purchase its shares at a reasonable price.

Legal basis: Under any of the following circumstances in Article 74 of the Company Law of People's Republic of China (PRC), the shareholders who voted against the resolution of the shareholders' meeting may request the company to purchase its equity at a reasonable price:

(a) the company has not distributed profits to shareholders for five consecutive years, but the company has made profits for five consecutive years and meets the conditions for distributing profits as stipulated in this Law;

(2) The merger, division or transfer of the company's main property;

(3) Upon the expiration of the business term stipulated in the Articles of Association or other reasons for dissolution stipulated in the Articles of Association, the shareholders' meeting will adopt a resolution to amend the Articles of Association to make the Company survive.

If the shareholders and the company fail to reach an equity purchase agreement within 60 days from the date of adoption of the resolution of the general meeting of shareholders, the shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the general meeting of shareholders.