What are the legal conditions for equity pledge?

Where the shares of a limited liability company or a joint stock limited company are pledged, the relevant provisions of the Company Law on equity transfer shall apply. At the same time, the equity pledge should satisfy the actor's corresponding civil capacity; Meaning is truth; Do not violate the mandatory provisions of laws and administrative regulations, and do not violate the effective elements of public order and good customs.

legal ground

Article 71 of the Company Law of People's Republic of China (PRC)

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.