[Direct answer]Shares can be inherited. According to Article 90 of the Company Law of the People's Republic of China (amended in 2023 and implemented on July 1, 2024), after the death of a natural person shareholder, his legal heirs may inherit the shareholder status; unless otherwise provided in the company's articles of association. That is to say, the property rights in shares (dividends, distribution of surplus assets, transfer price) belong to the estate and can generally be inherited; the shareholder status (the identity of participating in the operation and management) can also be inherited in principle, but subject to the company's articles of association or other arrangements. Limited companies need to handle the shareholder register and industrial and commercial change registration. For multiple inheritors, the shares shall be distributed according to the inheritance shares through consultation, or one inheritor shall acquire them and compensate the other inheritors.

I. Problem Background and Typical Scenarios

When a shareholder passes away, the family members want to take over the company's equity, but they encounter opposition from other shareholders and clauses in the articles of association such as "the company will repurchase the equity of the deceased shareholder". Some family members just want to get the money and don't want to participate in the operation. Related searches include "can company equity be inherited?", "conditions for inheriting shareholder status", and "what procedures are required for equity inheritance".

II. Key points of contention

First, whether the equity and the shareholder status can be inherited separately; second, the effectiveness of the restrictive clauses in the company's articles of association; third, how to arrange the shares and voting rights when there are multiple inheritors; fourth, how to determine the value of the equity and who the dividends should be allocated to.

III. Professional analysis by Henglue Lawyers

The first layer concerns the distinction between equity and eligibility. Equity combines the attributes of property rights and identity rights: the property rights portion clearly belongs to the estate and can be inherited or distributed at a discounted value; shareholder eligibility involves the human-capital nature of the company, and the law generally allows inheritance, but the company's bylaws may stipulate otherwise, such as requiring other shareholders to acquire the shares, allowing the company to repurchase them, or allowing heirs to obtain only property rights. The second layer emphasizes the precedence of bylaws. If the company's bylaws contain provisions on equity inheritance, those provisions shall prevail. Before handling the inheritance, family members should first review the bylaws and shareholder agreements to determine whether the heir "becomes a direct shareholder" or "only obtains a discounted compensation." If there are no special provisions in the bylaws, the heir may legally inherit shareholder eligibility and proceed with change registration. The third layer addresses multiple heirs and registration. If there are more than one heir, they may negotiate for one to acquire shareholder eligibility while other heirs receive a discounted compensation, or hold shares proportionally. To process the registration, they must submit death certificates, proof of inheritance rights, and change registration materials to the company registration authority. Beijing market supervision authorities review company change registration materials and procedures more rigorously, so early preparation is recommended. The fourth layer concerns equity value and dividends. The equity value can be negotiated, appraised, or determined based on the company's net assets and operating conditions. Dividends generated after the decedent's death generally belong to the heirs or are handled according to company resolutions, which should be assessed in light of the company's resolutions and equity ownership. Henglue Law Firm reminds that equity inheritance requires consideration of both legal provisions and company bylaws and shareholder relationships. Early communication can help reduce disputes. This case is handled by Beijing Henglue Law Firm.Yuan HangAttorney (Practice Certificate No.: 11101202110286151, subject to the certificate issued by the judicial administrative organ) acting as an agent.

IV. Practical suggestions and legal basis

Action list: First, review the inheritance provisions in the company's articles of association and shareholder agreements; Second, inventory the amount of investment, the proportion of equity, and the corresponding rights and interests; Third, negotiate for one person to acquire the shares and provide compensation or distribute them proportionally; Fourth, handle the registration of the shareholder register and industrial and commercial changes. Legal basis: Article 90 of the Company Law of the People's Republic of China (amended in 2023 and implemented on July 1, 2024); Articles 1122 and 1127 of the Civil Code of the People's Republic of China (implemented on January 1, 2021). For matters related to company equity and operational arrangements, please refer to the relevant provisions.Intellectual property protection and corporate lawThe services involving equity disputes and the enforcement of payments can be combined togetherCreditor's rights and debts, and enforcement casesHandle it.

5. Henglu Law Firm's Reminder

There are three key points regarding equity inheritance: property rights can be inherited; shareholder status is generally inherited, unless otherwise stipulated in the articles of association; if there are multiple inheritors, one can accept the inheritance while others receive compensation; first review the articles of association before discussing the distribution; and do not delay the registration of changes. For questions regarding equity and company affairs, please feel free to consult us.Intellectual property protection and corporate lawThe team is involved in the reference of inheriting and confirming ownership rights.\nInheritance of property and division of family assetsFor difficult equity disputes, they can be resolved throughSpecial servicesColumn processing.

VI. Frequently Asked Questions

Q1: Can a company's equity be inherited by children?

Yes. After the death of a natural person shareholder, his legal heirs may inherit his shareholder status, unless otherwise provided for in the company's articles of association. At the same time, the property rights in the equity clearly belong to the estate and can be inherited or distributed at a discounted price.

Q2: Is it valid to stipulate in the articles of association that "the company will repurchase the shares"?

It's generally effective. The Company Law allows the company's articles of association to make other arrangements for the inheritance of equity. If the articles of association stipulate that the equity shall be transferred to other shareholders or repurchased by the company, the inheritor can usually only obtain the corresponding discounted price. Before proceeding, it is necessary to check the articles of association.

Q3: How should the equity be divided among multiple inheritors?

It can be negotiated that one heir inherits the shareholder status, other heirs receive a discounted compensation, or they jointly hold and distribute voting rights and dividends according to their inheritance shares; if the negotiation fails, they can request the court to divide the shares.

Q4: How do I determine the value of my equity stake?

It can be determined through negotiation, or entrust an evaluation agency to evaluate based on the company's net assets, operating conditions, and industry standards; if there are disputes over the evaluation, a party may apply for a judicial appraisal in litigation, which will serve as the basis for the distribution of the discounted payment.

Q5: What procedures are required for inheriting equity shares?

Generally, it is necessary to submit the death certificate, the certificate of inheritance rights, and the materials for company change registration, to handle the change of the shareholder register and to register the change of shareholders with the company registration authority; if it involves amending the articles of association, the voting shall be conducted in accordance with the articles of association and legal procedures.

This article is written based on the common judicial interpretation in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for inheritance·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.