Effectiveness of Equity Gift from the Perspectives of Contract Law and Organizational Law

Adopting a single perspective to determine the effectiveness of equity gift not only causes the contradiction between the Civil Code and the Company Law, but also damages interests of corporations and shareholders. For this reason, it is necessary to use the dual perspective of contract law and organizational law to judge the effectiveness of equity gift. The determination of a gift agreement in an equity gift contract should be added to the consideration of the interests of corporate governance. The equity gift is not subject to the right of preemption and does not disturb members’ personal relationships in closed corporations. Equity gift shall adopt the equity change model of corporation recognition and validity doctrine, whereby the corporation shall conduct a compliance review of the equity gift, and the delivery shall be completed after the recognition. For the abuse of equity gift to circumvent the right of preemption, the legal effect of the gift shall not occur. To prevent shareholders from abusing the equity gift to circumvent investment obligation, the donee shall fulfill the contribution obligation after the equity gift is completed, and the donor shall bear the supplementary contribution responsibility.