Dispute over Shareholders' Right of First Refusal in a Fujian Technology Company

Case Summary

Plaintiffs Chen and Lin, shareholders of Xiamen-based Tech Company [Company Name], hold 40% and 30% of the company's shares respectively. Defendant Wang holds 30%. In 2024, without notifying plaintiffs Chen and Lin, defendant Wang unilaterally entered into an Equity Transfer Agreement with third party Li, transferring 30% of the company's equity to Li for a price of 150 million yuan. The parties completed the corresponding equity transfer registration with the Administration for Industry and Commerce. Upon learning of this, plaintiffs Chen and Lin filed suit in court, arguing that defendant Wang failed to fulfill the notification obligation and infringed upon their statutory right of first refusal as other shareholders, thereby violating the Company Law and the company's articles of association. Plaintiffs seek a court judgment declaring the Equity Transfer Agreement between defendant Wang and third party Li void and ordering the revocation of the equity transfer registration.

Key Dispute

1.Whether Defendant Wang fulfilled the notification obligation and protected other shareholders' right of first refusal in transferring their equity.

2.Is the "Equity Transfer Contract" signed between Wang and Li legal and valid?

3.Does the plaintiff's claim to revoke the equity registration change comply with legal regulations?

Case Strategy

1.Secure core evidence including the company's business registration details, shareholders' equity stakes, articles of association, "Equity Transfer Agreement," records of equity change registration, and communication logs between both parties.

2.Provide evidence that the Company Law and the company's articles of association explicitly stipulate that a shareholder transferring equity to an outsider must obtain consent from more than half of the other shareholders, notify all other shareholders in writing of the proposed transfer for their consent, and grant such shareholders the right of first refusal under equal conditions.

3.Demonstrate that Defendant Wang failed to provide written notice to Plaintiffs Chen and Lin prior to transferring the equity, failed to seek their consent, and thereby violated their right of first refusal. This transfer action seriously breached applicable laws and the company's articles of association.

4.Produce evidence that the "Equity Transfer Contract" signed by Wang and Li violates mandatory legal provisions and is therefore void; consequently, the equity transfer registration based on this void contract should be revoked.

Processing Result

The court ruled that the "Equity Transfer Agreement" signed by Defendant Wang and Defendant Li is void. Within ten days of the effective date of this judgment, the defendant company shall revoke the business registration change for 2024% equity processed in 2024 year 8 month and restore the equity registration to Defendant Wang's name. The defendant shall bear all litigation costs and preservation fees for this case.

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