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Key points of the referee: Shareholders transfer equity to externally . If other shareholders exercise the right of first refusal, although the request of the equity transferee other than the shareholder to continue to perform the equity transfer contract cannot be supported, it does not affect his request to transfer the shareholder to bear the corresponding breach of contract liability as required by the contract. ; , that is, the exercise of shareholders' right of first refusal is not necessarily related to the determination of the validity of the equity transfer contract. Regardless of whether the company's shareholders' external transfer of equity damages the priority refusal of other shareholders of the company, if the equity transfer contract itself does not have the invalid circumstances stipulated in Articles 146, 153 and 154 of the " Civil Code ", it should be determined that it is legal and valid.
——Case Index: " Civil Judgment of Civil 2nd Instance for Equity Transfer Disputes in Henan Zhongzhou Railway Holdings Co., Ltd., Shandong Haidun Investment Management Co., Ltd., etc.", (2020) Supreme Court Civil Final No. 1253, ruling date: 2020-12-29
Excerpt of Document: Regarding the relationship between the validity of the "Property Transaction Contract" and the shareholders' right of first refusal. Article 21, paragraph 1 and paragraph 2 of the "Interpretation of the Company Law IV" stipulate that "If a shareholder of a limited liability company transfers equity to a person other than a shareholder, fails to solicit other shareholders' opinions on the transfer of equity, or uses fraud, malicious collusion and other means to damage other shareholders' right of first refusal, and other shareholders claim to purchase the transferred equity in accordance with the same conditions, the people's court shall support it, but other shareholders know or should know the same articles on exercising the right of first refusal. If no claim is made within 30 days from the date of the document, or more than one year from the date of registration of equity change. other shareholders specified in the preceding paragraph only make requests to confirm the equity transfer contract and the validity of equity changes, and fail to claim to purchase and transfer equity according to the same conditions at the same time, the People's Court will not support it, but other shareholders are unable to exercise the right of first refusal due to their own reasons, except for those who request compensation for damages. ” To accurately understand this article, we must pay attention to protecting the right of first refusal of other shareholders, and also protecting the legitimate rights and interests of equity transfer contracts concluded between shareholders of a limited liability company and equity transferees other than shareholders. On the one hand, other shareholders enjoy the right of first refusal according to law. When they claim to purchase equity according to the same conditions as agreed in the equity transfer contract, they should support their litigation request unless the expiration of the right stipulated in the first paragraph of this article occurs. On the other hand, in order to protect the legitimate rights and interests of equity transferees other than shareholders, if the equity transfer contract does not have the reasons for fraud, malicious collusion, etc. that affect the validity of the contract as stipulated in the first paragraph of this article, it should be determined that is valid. If other shareholders exercise the right of first refusal, although the request of the equity transferee other than the shareholder to continue to perform the equity transfer contract cannot be supported, it will not affect the shareholder's request to transfer the shares in accordance with the contract to bear the corresponding liability for breach of contract. That is, the exercise of shareholders' right of first refusal has no necessary relationship with the determination of the validity of the equity transfer contract. In this case, due to the absence of fraud, malicious collusion, etc., which affect the validity of the "Property Transaction Contract", the first-instance judgment on the first-instance legal remedy of shareholders of Zhongzhou Holding Company is not an improper determination on the premise of confirming the invalidity of the "Property Transaction Contract".
To sum up, Regardless of whether the company's shareholders' external transfer of equity damages the priority refusal of other shareholders of the company, if the equity transfer contract itself does not have the invalid circumstances stipulated in Article 52 of of , it should be determined that it is legal and valid .
extended reading:
1. The Civil Code’s relevant provisions on the invalidity of civil legal acts
Article 146 The perpetrator and the counterparty use false intentions to indicate that the civil legal acts implemented by are invalid.
The validity of hidden civil legal acts with false intentions shall be handled in accordance with relevant laws and regulations.
Article 153 Civil legal acts that violate the mandatory provisions of laws and administrative regulations are invalid. However, this mandatory provision does not result in the invalidity of the civil legal act.
Civil legal acts that violate public order and good customs are invalid.
Article 154 The civil legal act of the perpetrator maliciously colluding with the counterparty to damage the legitimate rights and interests of others is invalid.
2. "Covering illegal purposes in legal form" is no longer a reason to determine that the contract is invalid. Such contracts can be determined to be invalid because they violate the mandatory provisions of the effectiveness of laws and administrative regulations.
——"Understanding and Application of General Provisions of the Civil Code of the People's Republic of China" (Part 2), published by People's Court Press, published on July 1, 2020, Author: Leading Group for Implementing the Civil Code of the Supreme People's Court.
4For details, please click : → ""Concealing illegal purposes in legal form" is no longer a reason for invalidity of the contract, and it can be determined to be invalid according to the mandatory provisions for the effectiveness of laws and administrative regulations"
Source: The highest case
