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In recent years, equity transfer disputes have been increasing year by year. However, the company law was implemented in 1993, and the relative conversion principle of the provisions on equity transfer. Although the company law has been amended several times, it still can not meet the evaluation needs of current equity transfer disputes, resulting in different judgment scales for many equity transfer disputes. By consulting relevant cases, the author summarizes the judgment views on several issues related to equity transfer disputes, with a view to attracting jade.

1、 The subject and jurisdiction of equity transfer disputes.

1. Is the contract subject of the equity transfer agreement concluded between shareholders or between shareholders and the company? The Supreme Court made it clear through the effective judgment document that the transferor and transferee in the equity transfer agreement are the shareholders of the original company who are the new shareholders of the company, and the company itself is not any party to the equity transfer agreement. The effective judgment documents are: first, the Supreme Court (2015) MSZ No. 1342 civil judgment; second, the Supreme Court (2012) MSZ No. 417 civil judgment.

2. Disputes over equity transfer may be settled by agreement in accordance with the provisions of the civil procedure law. The effective judgment document is: Supreme Court's (2016) Supreme Court's No. 81 civil ruling.

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2、 The validity of equity transfer contract.

1. The equity transfer agreement between the two parties in malicious collusion is invalid. The effective judgment document is the Supreme Court's (2014) MTZ No. 22 judgment.

2. In the equity transfer, the terms that the transferee pays the equity transfer money with the company's property are invalid. The effective judgment document is the Supreme Court's (2016) Supreme Court judgment No. 264.

3. The equity transfer contract involving false capital contribution is not necessarily invalid. After a shareholder obtains the equity, he shall be listed in the articles of association, the register of shareholders or be registered in the industry and commerce. He shall be qualified as a shareholder and have the right to dispose of his equity unless his rights are removed through legal procedures. False capital contribution and equity transfer are different legal relations, which are investment disputes within the company. False capital contribution does not necessarily lead to the invalidity of the transfer agreement. The effective judgment document is (2014) min Er Zhong Zi No. 121 judgment of the Supreme Court.

4. The actual investor's transfer of equity is effective. Although it is impossible to go through the change registration with the Administration for Industry and commerce, what the two parties actually transfer is the actual investor's status and investment rights and obligations. The effective judgment document is the Supreme Court's (2016) supreme law min Zhong Zi No. 18 judgment.

5. If the transferee is in good faith, although the equity is not real property or movable property, the system of bona fide acquisition can be applied by analogy. The effective judgment document is (2013) min Er Zhong Zi No. 29 judgment of the Supreme Court.

6. If the promoters of a joint stock limited liability company conclude an equity transfer contract within the lock up period but agree to go through the transfer formalities after the expiration of the lock up period, the contract shall be valid. The effective judgment document is: Jiangsu Provincial High Court (2005) Sumin erchu Zi No. 0009 (Bulletin of the Supreme Court, No. 5, 2007)

7. The agreement that the equity of an employee shall be repurchased by the company after his resignation, removal or death is legal and effective. The effective judgment document is the Supreme Court's (2015) MSZ No. 2819 judgment.

3、 The performance and cancellation of equity transfer contract.

1. The shareholders have agreed on the share repurchase price in advance, and the company's assets have changed significantly. Unless a new agreement is reached, the repurchase price shall not be adjusted. The effective judgment document is the Supreme Court's (2016) supreme law min Zhong Zi No. 34 judgment.

2. The equity transfer agreement stipulates that the price shall be determined by audit. If both parties confirm the amount through reconciliation during performance, the contract shall be changed, and one party shall not claim audit again. The effective judgment document is (2014) min Er Zhong Zi No. 36 judgment of the Supreme Court.

3. The transferor fails to achieve the purpose of the contract due to the delay in paying the equity transfer funds, and meets the conditions for cancellation. The effective judgment document is the Supreme Court's (2016) Supreme Court judgment No. 276.

If most of the transfer money has been paid, the purpose of the contract shall be deemed to have been achieved and the contract shall not be entitled to be terminated. The effective judgment document is the Supreme Court's (2017) Supreme Court judgment No. 919.

4. When the petition containing the request for rescission is served on the defendant, the contract rescinds. The effective judgment document is the Supreme Court's (2017) Supreme Court judgment No. 315.

4、 Other issues.

1. When to acquire equity after equity transfer. The minutes of the Ninth People's Congress stipulates that if the transferee obtains the equity when its name is recorded in the register of shareholders, and has not gone through the change registration, it shall not confront a bona fide third party.

2. If shareholders transfer all or part of their equity to each other, whether other shareholders have the preemptive right. This depends on whether the articles of association or the shareholders' agreement has agreed. If there is no such special agreement, other shareholders do not have the preemptive right.

3. With respect to the security for equity transfer. According to Article 71 of the minutes of the people's Republic of China and articles 68 and 69 of the judicial interpretation of the guarantee system, the creditor's claim that he enjoys the equity shall not be supported, but he may be paid in priority with the proceeds from the auction of the sold equity. If the form of equity is changed to the name of the creditor, the company or the creditor of the company requires it to bear the joint and several liability for making up the capital contribution with the original shareholder.

4. The transfer of equity of one person company. If a shareholder of a one member company cannot prove that the company's property is independent of the shareholder's own property, he shall be jointly and severally liable for the company's debts. Even if the shareholders of a one-man company have transferred their equity, they also need to bear joint and several liabilities for the company's debts in the absence of proof of their property independence. The effective judgment document is: Supreme Court (2020) supreme law min Shen No. 3767 judgment.

5. Equity transfer and marital property. The transfer of equity by one spouse does not require the consent of the other. According to the minutes of the 3rd judge's meeting of the second circuit court of the Supreme People's court in 2020, equity is the rights enjoyed by shareholders in the company based on their identity and status, including the right to benefit from assets, the right to participate in decision-making and the right to choose managers. It is a compound right with both property rights and personal rights. According to the provisions of the company law, it obtains complete and flawless shareholder rights, It should also comply with the substantive requirements of capital contribution or subscription to the company and the formal requirements of being recorded in the register of shareholders, that is, capital contribution is not the only requirement for acquiring equity. It cannot be recognized that the other spouse has equity just because the capital contribution comes from the common property of the husband and wife. If the equity is registered in the spouse, the other spouse has the right to dispose of it. The property rights and interests acquired after equity disposal belong to the joint ownership of the husband and wife, and both parties can divide it. Such cases include: 1. Supreme People's Court (2019) Supreme faminzhong No. 424 case and Supreme People's Court (2014) min Er Zhong Zi No. 48 case; 2. Liaoning High Court (2015) Liao min Er Zhong Zi No. 341 case; 3. Shaanxi High Court (2015) Xi Zhong min Si Zhong Zi No. 473 case.

6. The transfer agreement of defective capital contribution is valid. The equity transfer contract involving false capital contribution is not necessarily invalid. After a shareholder obtains the equity, he shall be listed in the articles of association, the register of shareholders or be registered in the industry and commerce. He shall be qualified as a shareholder and have the right to dispose of his equity unless his rights are removed through legal procedures. False capital contribution and equity transfer are different legal relations, which are investment disputes within the company. False capital contribution does not necessarily lead to the invalidity of the transfer agreement. The effective judgment document is: Supreme Court case (2014) min Er Zhong Zi No. 121