Article 72 Shareholders of a limited liability company may transfer in whole or part their respective shares amongst themselves.
Where a shareholder transfers his shares to a person other than a shareholder, the consent of more than half of all shareholders shall be required. The shareholder who intends to transfer his shares shall notify the other shareholders in writing and seek their approval. Failure by those shareholders to make any response within thirty (30) days of the receipt of the written notice shall be deemed to be their consent to such transfer. Where more than half of the other shareholders do not consent to the transfer, such shareholders shall purchase the shares to be transferred. Failure by those shareholders to make such purchase shall be deemed to be their consent to such transfer. Where the shareholders consent to the share transfer, other shareholders shall have the preemptive right to purchase the shares to be transferred on equal terms and conditions. Two or more of the shareholders exercising the preemptive right of purchase shall negotiate and determine the proportion of the shares to be purchased respectively. Failing such, the shares shall be purchased in proportion to their capital contributions at the time of such transfer.
Where the articles of association stipulate otherwise, such stipulations shall apply.
Article 73
The people’s court, where the shares held by a shareholder is transferred through enforcement procedures prescribed by law, shall inform the company and all of its shareholders. Other shareholders shall have the preemptive right to purchase such shares on equal terms and conditions. Failure by those shareholders to exercise the right of first refusal within twenty (20) days of the date of court notice shall be deemed to be a waiver of the preemptive right of purchase.
Article 74
The company, after the share transfer is completed pursuant to Article 72 and Article 73 hereof, shall cancel the capital contribution certificate of the original shareholder, issue new certificate to the new shareholder and, amend the record of the shareholder and his capital contribution in the articles of association and the roster of shareholders. Such amendments to the articles of association need not be voted for by shareholders meetings.
Article 75
The shareholder voting against the decision of the shareholders meeting in respect of any one of the following circumstances may request the company to purchase his shares at reasonable prices:
(1) the company will not distribute dividends for five consecutive years though the company has made profit over these years and has met the distribution requirements prescribed in this Law;
(2) in the event of merger, division or assignment of the company’s major assets;
(3) in the event of expiry of the company or any other causes for dissolution prescribed in the articles of association, the shareholders meeting has adopted a resolution to amend the articles of association to renew the company.
Where the shareholder cannot reach a share purchase agreement with the company within sixty (60) days of the date of the resolution, the shareholder may file suit to the people’s court within ninety (90) days of the date of the resolution.
Article 76 Where a natural person shareholder deceases, his shareholder’s status may be inherited by his legal heir unless otherwise stipulated in the articles of association.
