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Q&A Regarding New Company Law of 2024 (15)

Answer
Q:
How do shareholders of a limited liability company transfer their equity?
A:
The shareholders of a limited liability company may transfer all or part of their equity to each other.
Where a shareholder transfers the equity to a person other than a shareholder, it shall notify the other shareholders in writing of such matters as the quantity, price, payment method and time limit of the equity transfer, and other shareholders shall have the right of pre-emption under the same conditions. If the shareholder fails to reply within 30 days from the date of receipt of the written notice, it shall be deemed to have waived the pre-emptive right. If two or more shareholders exercise the pre-emptive right, the respective purchase ratio shall be determined through consultation; If no agreement can be reached through negotiation, the pre-emption right shall be exercised according to the respective proportion of investment at the time of transfer.
Where the articles of association provide otherwise for the transfer of equity, such provisions shall prevail.

Q:
What do shareholders need to do to transfer equity?
A:
If a shareholder transfers their equity, they shall notify the company in writing and request a change in the shareholder register; Those who need to apply for change registration shall request the company to apply for change registration with the company registration authority.

Q:
When can the transferee of equity transfer exercise their shareholder rights?
A:
In the case of equity transfer, the transferee may claim the exercise of shareholders' rights against the Company from the time it is recorded in the register of shareholders.

Q:
What does the company need to do after the equity transfer is completed?
A: After transferring equity in accordance with the Company Law, the company shall promptly cancel the capital contribution certificate of the original shareholder, issue the capital contribution certificate to the new shareholder, and modify the records of shareholders and their capital contribution in the articles of association and the register of shareholders accordingly. The amendment to the articles of association shall not be subject to the vote of the shareholders.

Q:
What should the transferee do when it obtains the unpaid-in equity?
A: Where a shareholder transfers an equity that has subscribed for capital contribution but has not expired, the transferee shall bear the obligation to pay the capital contribution; If the assignee fails to pay the capital contribution in full on time, the assignor shall bear supplementary liability for the capital contribution that the assignee fails to pay on time.

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