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China Share Transfer

Updated:2018-3-2 17:01:08    Source:www.tannet-group.comViews:300

Shares can be transferred from a shareholder to another person (either a new or existing shareholder). Shares are transferred by way of gift or sale. Typically, shares are transferred to introduce a new shareholder. So long as a company has enough shares, it’s possible to transfer shares in a limited company any time after incorporation.

In China, shares can be transferred from a shareholder to another person. Shares are transferred by way of gift or sale.  Typically, shares are transferred to introduce a new shareholder. As long as a company has enough shares, it’s possible to transfer shares in a limited company any time after incorporation.

Transfer of share by contract
If a shareholder intends to transfer his share to a non-shareholder, certain requirements have to be met. First, the transfer requires approval by more than half of the other shareholders. The shareholder intending to transfer his share must notify the other shareholders in writing. If the other shareholders do not object to the transfer within 30 days of receipt of the notice, their approval is deemed to be given. If at least half of the other shareholders oppose the transfer, they are obliged to purchase the share, otherwise their approval is also deemed to be given.

Transfer of share by people court
According to China Company Law, the people's court may transfer shares on the basis of enforcement proceedings provided for by law. In case of such transfer, the other shareholders have a pre-emption right in respect of the shares. The people's court must notify the company and all shareholders of the transfer and the shareholders may exercise their pre-emption right under the same conditions within 20 days from the court's notice. 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.

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