Legal basis: Civil Code of People's Republic of China (PRC).
Article 123 The establishment of a limited liability company shall meet the following conditions: (1) The number of shareholders shall reach a quorum; (2) The capital contribution subscribed by all shareholders conforms to the provisions of the Articles of Association; (3) Shareholders * * * have the same articles of association; (4) Having a company name and establishing an organization meeting the requirements of a limited liability company; (5) Having a company domicile.
Article 171 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 and be deemed to agree to the transfer. Under the same conditions, other shareholders have the priority to purchase the equity transferred with the consent of shareholders. Where 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.