China Based Company Share Transfer Service
Hotline: 86-755-82148419, Email: susiehu@citilinkia.com, Wechat: 13823131503
The transfer of ownership of shares in a Chinese limited liability company is a common source of disputes in China as the Chinese Company Law does not clearly set out the mechanism for such transfer.
As per COVID-19, there are shareholders who consider to transfer some shares to other party for better co-operation.
Purchase of own shares
Pursuant to Article 75 PRC Company Law the shareholder of a Chinese LLC is entitled to request the Chinese LLC to purchase his share in the company if he opposes a shareholders' resolution on any of the following matters:
that there will be no distribution of profits to the shareholders, provided that the Chinese LLC has not distributed any profits to the shareholders for five consecutive years despite having made profits during such period and provided that the profit distribution requirements set out in the PRC Company Law are met;
a merger, de-merger or transfer of main assets of the Chinese LLC;
an amendment of the Chinese LLC's articles of association to continue the Chinese LLC (e.g. because the duration of the Chinese LLC as set out in the articles of association has expired).
The Chinese LLC must pay a reasonable purchase price for the share. The shareholder and the Chinese LLC have to agree on the terms and conditions of the transfer of the share within 60 days from the passing of the shareholders' resolution. If they do not, the shareholder has another 30 days to refer to the people's court for a decision.
The PRC Company Law does not state when the purchaser acquires ownership of the share. Hence, in China the transfer of shares in a Chinese LLC is a common source for disputes.
If you have company for sale or share transfer or you need form a new company ,please contact us anytime .
Contact Us
If you have further interest on China company service and the queries, don’t hesitate to contact us at 86-755-82148419 or emailing to susiehu@citilinkia.com.