Functional Orientation and Systematic Application of Forfeiture of SharesCentered on Article 46 of the Company Law (Revised Draft)

Article 46 of the Company Law (Revised Draft) stipulates the rule of forfeiture of shares for the first time, which is different from the delisting system, which aims to expel shareholders who violate major obligations or no longer have the required qualifications, thus threatening the survival of the company’s personality. Forfeiture of shares does not directly point to the identity of shareholders, but aims to urge shareholders to fulfill their obligations of capital contribution, The withdrawal of shareholders’ rights corresponding to the unpaid capital contribution of shareholders and the loss of shareholders’ identity are the incidental results of shareholders’ complete failure to fulfill their capital contribution obligations. The advantage of forfeiture of shares is that the company does not have to passively wait for the performance of shareholders in the position of debtor, but can take the initiative to recover equity and absorb and enrich the company’s capital. The clear positioning of the function of forfeiture of shares directly determines the specific design and implementation of the legal norm. From the perspective of elements and judicial practice, Article 17 of the third judicial interpretation of the Company Law generally points to the rule of delisting shareholders, which has a progressive relationship with Article 46. There are not only quantitative differences between partial non performance of capital contribution obligations and complete non performance of capital contribution obligations, but also qualitative differences in the application of different rules of forfeiture of shares and shareholder delisting. They play different normative functions under the company law system.