Should the company be the defendant or the plaintiff in the dispute over invalid equity transfer?

Legal subjectivity:

A company can be the defendant in a dispute over equity transfer, but there are several situations. (1) Disputes between the parties to the equity transfer contract, such as requesting the performance of the transfer contract, requesting the payment of equity transfer money and compensation for losses or payment of liquidated damages, or requesting the dissolution of the transfer contract, requesting the determination that the transfer contract is invalid, etc. Such disputes are mainly handled in accordance with the relevant provisions of the contract law. The counterpart of the contract should be listed as the defendant, and those involved in the interests of the company should be listed as the third party. (2) Litigation disputes involving other shareholders' preemptive rights need to be handled in combination with the relevant provisions of the Company Law and the Civil Code. The shareholder who transferred the equity shall be listed as the defendant, the company as the third party, and if the interests of other shareholders are involved, the third party shall be added. (3) Disputes arising from bona fide acquisition of equity, which are mostly caused by other shareholders' objections to equity transfer. Generally, other shareholders are plaintiffs, and third parties and companies acquired in good faith are defendants. (IV) In the dispute over equity transfer, the company's resolution is invalid or revoked, and if the parties sue to confirm that the resolution of the shareholders' meeting or the shareholders' meeting or the board of directors is invalid or revoked, the company shall be listed as the defendant, and the relative stakeholders involved in the resolution may be listed as the * * * co-defendant or the third party. The applicable law of equity transfer disputes is Company Law, and the Supreme People's Court's Provisions on the Cause of Action of Civil Cases lists a three-level cause of action "248. Equity transfer disputes. " Disputes related to the company. " Specifically, equity transfer disputes refer to disputes between shareholders and between shareholders and non-shareholders, including equity transfer disputes of limited liability companies and equity transfer disputes of joint stock limited companies. A limited liability company is both a person and a capital, and the company law has made relevant mandatory provisions on its equity transfer. A joint stock limited company is a typical joint venture company, and its equity is characterized by free transfer. In practice, there are more and more disputes about the equity transfer, especially the external equity transfer of limited liability companies, because the company law has made more restrictive provisions on it, such as the consent of more than half of other shareholders and the preemptive right of other shareholders, which leads to more and more disputes about the effectiveness of the equity transfer contract and the preemptive right in practice. In addition, the company law also stipulates that a company should buy the shares of shareholders under certain circumstances, and such disputes are also increasing. Therefore, the "Provisions on the Cause of Action of Civil Cases" lists the equity transfer dispute as the third-level cause of action. The indictment of equity transfer dispute must meet the basic requirements of general civil indictment: First, there must be a clear defendant. What is clear here is that if a company needs to have its full name and industrial and commercial registration information, the cancelled enterprise cannot be listed as the defendant. If the defendant is a natural person, he needs to have his identity information. In practice, it is mainly a copy of ID card, a copy of household registration book or identity information printed by public security organs. Secondly, the claim must be clear. The essence of equity transfer dispute is equity sale contract dispute. The general litigation request requires to continue to perform the contractual obligations, cooperate with the equity transfer procedures, or claim to investigate the other party's liability for breach of contract for failing to perform the contractual obligations. Finally, the company involved in the equity transfer dispute can be listed as a third party as needed, because there will be traces of company cooperation or participation in the transfer process, which will help the court to find out the facts.

Legal objectivity:

Company Law of the People's Republic of China

Article 71

Shareholders of a limited liability company may transfer all or part of their shares to each other. Shareholders' transfer of equity to persons other than shareholders shall be approved by more than half of other shareholders. Shareholders shall notify other shareholders in writing to agree to the transfer of their shares. If other shareholders fail to reply within 30 days from the date of receiving the written notice, they shall be deemed to have agreed to the transfer. If more than half of the other shareholders do not agree to the transfer, the shareholders who do not agree shall purchase the transferred equity;

Do not buy, as agreed to transfer. Under the same conditions, other shareholders have the priority to purchase the equity transferred with the consent of shareholders. If two or more shareholders claim to exercise the preemptive right, their respective purchase proportions shall be determined through consultation;

If negotiation fails, the preemptive right shall be exercised in accordance with their respective investment proportions at the time of transfer. Where there are other provisions on equity transfer in the articles of association, such provisions shall prevail.