How to quit the company's shares

After the establishment of a limited company with capital contribution, due to the practice of economic life, shareholders are required to withdraw their shares. There are many reasons: (1) The operating risk of the company is too high, which exceeds the investment expectation of shareholders. (2) the death of shareholders. Shareholders have the right to share the inheritance according to law. If the heir is unwilling or unfit to become a shareholder of the company, the investment of the deceased shareholder must be separated from the company. (3) Shareholders divorce. When shareholders divorce, it is difficult for spouses of non-shareholders to participate in limited companies with high requirements for human nature. Non-shareholder spouses often have to withdraw half of the shareholders' equity from the company for cash delivery. (4) The minority shareholders are squeezed by the controlling shareholders and want to withdraw their shares. (5) The company is deadlocked. (6) Shareholders' capital contribution shall be enforced by law. (7) Other circumstances, such as shareholders' long-term illness, inability to participate in the management of the company, shareholders' request to quit the company due to moving abroad or abroad, and shareholders' urgent need for funds due to major changes in economic conditions. . Article 36 of the Company Law stipulates that after the establishment of the company, shareholders shall not withdraw their capital contribution. Compared with the company law before the amendment in 2005, the new company law only changed the original "withdrawing capital contribution" to "withdrawing capital contribution", but established a new legal system. In line with the provisions of Article 75 of the new Company Law on the repurchase of shareholders' shares by the company, it has found a way for shareholders of limited companies to quit the company. However, on the whole, China's legislation on the withdrawal of shares by shareholders of limited liability companies is not perfect. Due to the nature of joint venture and joint venture, the establishment and operation of a limited liability company is based on mutual trust and cooperation among shareholders. In practice, if the relationship between shareholders deteriorates extremely, it is quite difficult for shareholders to quit. First, due to the lack of cooperation between shareholders, it is difficult to form a resolution of shareholders' meeting to dissolve the company, or even to convene a shareholders' meeting. Second, when transferring equity to the outside world, it is faced with the inability to obtain the consent of more than half of all shareholders or the intention of the original shareholders not to accept or unite with the new shareholders, so that no one is willing to accept equity. When transferring the equity to the internal shareholders of the company, the original shareholders may take advantage of holding the company, so that the withdrawing shareholders are in a state of information asymmetry in finance and assets, thus damaging their rights and interests. Shareholders' withdrawal when the company is dissolved: (1) The business term stipulated in the articles of association expires or other circumstances that should terminate the business occur. In this case, the company is dissolved and cancelled after liquidation; (2) The shareholders' meeting decides to dissolve the company. (3) The company goes bankrupt. (4) The company is ordered to close down in violation of laws and administrative regulations. There are two main ways for laws and regulations to stipulate this aspect: one is to directly stipulate the suspension of business or closure. For example, Article 39 of the Environmental Protection Law stipulates: Second, it stipulates that the business license shall be revoked. For example, as stipulated in Article 37 of the Product Quality Law and Article 68 of the Regulations on the Administration of Company Registration, if the company fails to accept the annual inspection as required, its business license shall be revoked. According to Article 192 of the Company Law, if a company is ordered to close down according to law, it shall be dissolved, and the relevant competent authorities shall organize shareholders, relevant authorities and relevant professionals to set up a liquidation group to carry out liquidation. When the company exists, shareholders can choose to transfer their capital contribution or force the company to buy shares when they quit the company (also known as company share repurchase). The transfer of capital contribution (that is, equity transfer) is divided into internal transfer and external transfer. 1. Internal transfer refers to the transfer between the original shareholders of the company, as long as the shareholders reach an agreement on price, price delivery and shareholder registration change; 2. External transfer refers to the transfer to the buyer other than the original shareholder of the company. One transfer must be approved by more than half of all shareholders; The second is to protect the transferor's right to transfer, and the law stipulates that shareholders who do not agree to the transfer should buy this part of the shares. Do not buy, as agreed to transfer. Third, other shareholders have the preemptive right to the capital contribution that shareholders agree to transfer under the same conditions. In addition, according to the amount of transfer, it can be divided into total transfer and partial transfer. Forcing the company to buy the shares of the withdrawing shareholders also involves the important issue of the purchase price. If the price is too low, it will harm the interests of the shareholders who withdraw their shares, while if the price is too high, it will harm the interests of the company. Therefore, how to determine the purchase price has become the core issue of concern to both parties. Generally, the following methods can be considered to determine the purchase price: (1) bargaining. (2) the price or calculation method agreed in advance in the articles of association. The company's articles of association may stipulate in advance the price of the company's share purchase as the price when the share purchase may occur in the future. For example, it can be agreed that the purchase price is calculated according to the book value of the company when shareholders withdraw their shares, or the original capital contribution of shareholders can be returned, or a professional institution can be invited to evaluate it. (3) Judicial evaluation price. When withdrawing shareholders choose to withdraw their shares through litigation, they can apply to the people's court for judicial evaluation, and the court will entrust a professional evaluation agency to conduct the evaluation. The classification of shareholder withdrawal can be divided into two categories: negotiated withdrawal. There are two situations. One is that shareholders withdraw their shares in advance in the contract or articles of association concluded at the beginning of the company's establishment. Another situation is that in the course of the company's operation, one shareholder proposes to withdraw his shares and other shareholders agree to withdraw their shares. The second is unilateral withdrawal, which means that shareholders are unable, unwilling or unsuitable to continue to participate in the company's operation and withdraw from the company, such as forcing the company to buy back shares. So, how to realize the shareholders' right to quit and let them quit the company? 1. We suggest that shareholders establish a preventive mechanism in advance. The shareholders of a limited liability company stipulate the conditions and procedures for withdrawing shares in the articles of association. Considering the possible contradictions in the future, the advance clause should be as detailed as possible. For example, (1) stipulates that when the controlling shareholder controls the company and restricts other shareholders' participation in management, the infringed shareholder can quit the company and other shareholders must liquidate their rights and interests; (2) It is stipulated that when a shareholder conflicts with other shareholders and is unwilling to continue to cooperate with other shareholders to operate the company, the shareholder can withdraw, which is deemed to have obtained the permission to transfer the equity, and other shareholders shall purchase their equity, and bear joint and several liability for the purchase money and related owners' rights and interests; (3) It is stipulated that when the profit of the company cannot reach 5% of its net assets for two consecutive fiscal years, as long as a shareholder proposes to dissolve the company, it is deemed that the shareholders' meeting to dissolve the company has been established and the company can be liquidated according to law. According to the specific situation of the company's industry and shareholders, there are various situations that can be preset, and shareholders can make full use of this skill to protect their opportunities and rights to withdraw their shares. Shareholders should not stipulate the conditions and procedures for shareholders to quit the company in the cooperation agreement. We suggest that the articles of association stipulate the specific conditions and procedures for shareholders to quit the company. Professor Zhao Xudong of China University of Political Science and Law believes that after the establishment of the company, the original cooperation agreement will be invalid, and shareholders may not file a lawsuit against the established company according to the agreement. 2. In order to effectively protect the rights of minority shareholders with different opinions and effectively restrict the abuse of rights by major shareholders, the new Company Law stipulates the withdrawal mechanism of shareholders, and Article 75 of the new Company Law stipulates the share repurchase right of dissenting shareholders. The company has not distributed profits to shareholders for five consecutive years, but it has made profits for five consecutive years and met the conditions for profit distribution stipulated in this Law; The merger, division or transfer of the company's main property; Upon the expiration of the business term stipulated in the Articles of Association or other dissolution reasons stipulated in the Articles of Association, the shareholders' meeting will adopt a resolution to amend the Articles of Association to make the Company survive. Shareholders who vote against the resolution of the shareholders' general meeting may ask the company to buy their shares at a reasonable price. Withdrawal of shares is the right given to shareholders by law. In order to ensure that shareholders really enjoy the right to withdraw their shares, the second paragraph of Article 75 of the new Company Law stipulates: "If shareholders and the company cannot reach an equity purchase agreement within 60 days from the date of adoption of the resolution of the shareholders' meeting, shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the shareholders' meeting." The restriction of shareholders' withdrawal and the protection of the interests of the third party. The withdrawal of shareholders will have the objective consequence of reducing the company's capital, reduce the company's solvency, and thus affect the repayment of the company's creditors. The new "Company Law" does not make necessary restrictions on shareholders' withdrawal. The author thinks that shareholders should be restricted from withdrawing shares: (1) When the company's liabilities are greater than its assets, the withdrawing shareholders should provide guarantees. (2) The purchase price of the company cannot exceed the company's net assets, otherwise, the interests of the company's creditors may suffer losses. (3) Shareholders should go through publicity procedures when withdrawing shares, and notify or announce the company's creditors according to the capital reduction procedures. If the creditor does not agree to withdraw the shares, the company shall continue to withdraw the shares after paying off the debts.