6 In relation to the Company Law of China:
(a) state the conditions to be met for a shareholder of a limited liability company to transfer his equity to a party
other than the shareholders of this company; and (6 marks)
(b) state the procedures and conditions to be complied with when a court orders the transfer of the equity of a
shareholder of a limited liability company under the enforcement procedures of the law. (4 marks)
(10 marks)

6 This question requires candidates to state the conditions for a shareholder of a limited liability company to transfer his equity to a
party other than the shareholders of this company, and state the procedures and conditions to be complied with when the transfer
of the equity of a shareholder is under a court order.
(a) In accordance with Article 72 of the Company Law, where a shareholder intends to transfer his equity to a party other than
the shareholders of the company, the consent of over half of all the shareholders must be secured. Such shareholder shall
notify other shareholders for consent of the matter on the transfer of his equity. If the other shareholders fail to give a reply
within 30 days upon receipt of such notice, they shall be deemed to have consented to such transfer. If over half of the other
shareholders disapprove such transfer, then, those shareholders disapproving the transfer shall purchase the equity to be
transferred. If such shareholders do not make the purchase, they shall be deemed to have consented to the transfer.
(b) In accordance with Article 73 of the Company Law, when a people’s court renders an order to transfer compulsorily the equity
of a shareholder of a limited liability company under the enforcement procedures as stipulated by laws, it shall notify the
company and all of its shareholders. Under such circumstances, other shareholders shall have the priority to purchase the
equity under equal conditions. If other shareholders fail to exercise their priority to purchase within 20 days upon the date of
the notice of the court, they shall be deemed to have waived their priority to purchase.