A joint stock limited company may not buy shares of the company, but there are several exceptions, such as reducing registered capital, repurchase by dissenting shareholders, etc., that is, principle prohibition and exception permission.
For a limited liability company, if the shareholders are dissatisfied with the resolution of the shareholders' meeting, they can ask the company to buy back the shareholders' equity in three situations:
(1) The company has not distributed profits to shareholders for five consecutive years, but the company has made profits for five consecutive years, and the conditions for distributing profits stipulated in this Law are met.
(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, so that the Company can survive.
For a joint stock limited company, shareholders' equity can be repurchased under the following four circumstances:
(1) Reducing the registered capital of the company
(2) Merging with other companies holding shares of the Company.
(3) Reward shares to employees of the company.
(4) Shareholders request the company to purchase their shares because they disagree with the resolution of merger or division made by the shareholders' meeting.
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 adopts 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.