The practice and strategy of equity transfer under the unpaid registered capital

Mondo Finance Updated on 2024-01-28

Equity transfer is a civil legal act in which a shareholder of a company transfers his shares to others in accordance with the law, so that others become shareholders of the company. According to the Company Law, shareholders of a limited liability company may transfer all or part of their equity to each other. The transfer of equity by a shareholder to a person other than the shareholder shall be subject to the consent of more than half of the other shareholders. Shareholders shall notify other shareholders in writing to solicit consent for their equity transfer, and if other shareholders do not reply within 30 days from the date of receipt of the written notice, they shall be deemed to have agreed to the transfer. For the equity transferred with the consent of the shareholders, other shareholders have the right of first refusal under the same conditions. If two or more shareholders claim to exercise the right of first refusal, they shall negotiate to determine their respective purchase ratios;If the negotiation fails, the right of first refusal shall be exercised in accordance with the proportion of their respective capital contributions at the time of transfer. If the articles of association of the company have other provisions on the transfer of equity, follow those provisions.

However, in practice, there are times when the registered capital is not paid-in. At this time, how to carry out the equity transfer?

First of all, we need to understand the impact of unpaid registered capital on equity transfer. According to the Company Law, the registered capital of a limited liability company is the amount of capital contribution subscribed by all shareholders registered with the company registration authority. Where laws, administrative regulations and decisions have other provisions on the paid-in registered capital and the minimum amount of registered capital of a limited liability company, such provisions shall prevail.

Therefore, in the case that the registered capital is not paid-in, the registered capital of the company is actually "zero yuan". This means that the responsibilities and risks that the transferee needs to bear are relatively small when carrying out the equity transfer. However, this can also have an impact on the company's credibility and image.

So, how to transfer equity without the registered capital being paid?

First, both parties need to sign an equity transfer agreement. The agreement should clearly stipulate the equity transfer, the rights and obligations of the transferor and the transferee, the equity structure of the company after the transfer, and the company's management and decision-making mechanism. At the same time, in order to protect the interests of both parties, some additional terms can also be agreed, such as confidentiality agreements, non-competition, etc.

Secondly, both parties need to perform the procedures for equity transfer in accordance with the law. Specifically, it is necessary to convene a shareholders' meeting or board of directors in accordance with the provisions of the Company Law and the articles of association to review and approve the resolution on equity transferNotify other shareholders in writing of the equity transfer to seek consent;Perform relevant procedures in accordance with the provisions of the company's articles of association;Procedures for changing the registration of the company, etc.

Finally, it should be noted that when the equity transfer is carried out without the registered capital being paid, the transferee should understand the actual situation of the company and carefully assess the value and risk of the company. At the same time, both parties should clearly stipulate the responsibilities and obligations after the transfer in the agreement to protect the interests of both parties.

To sum up, the transfer of equity without the paid-in registered capital needs to comply with the provisions of the Company Law and the articles of association, perform relevant procedures, and clarify the rights and obligations of both parties. Only in this way can the interests of both parties and the normal operation of the company be safeguarded.

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