[Direct answer]In the Beijing area, to change the ownership of shares upon inheritance, first confirm the inheritance relationship, then fulfill the obligation to notify the company and other shareholders, and apply to the market supervision and management department for the registration of shareholder changes. According to the Company Law of the People's Republic of China (amended in 2023 and implemented on July 1, 2024) and the Inheritance Chapter of the Civil Code, 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. Action guidance: First, check the articles of association, confirm the will and the heirs, and refer to the details for more information.Legal services for inheritance and family property division.

1. Problem background and typical scenarios

The inheritance of equity is more complex than that of real estate and vehicles, and it involves the company and other shareholders. Typical scenarios include: the founder of the company passes away, and his/her children want to inherit the shareholder status and participate in the operation; the company's articles of association set restrictions on inheritance; other shareholders are concerned that the newcomers will affect the governance; the equity value is high, and the heirs have different opinions. Such cases often involve the review of the company's articles of association, the consent of other shareholders, and industrial and commercial changes. For more information, please refer to the relevant rules.Legal services for inheritance and family property division.

II. Key points of contention

The controversy focuses on four points. Firstly, whether shareholder status can be inherited: in principle, it can be inherited, but the articles of association may stipulate otherwise. Secondly, the scope of the estate: if the shares belong to the couple, the spouse's share must be separated out before inheritance. Thirdly, other shareholder rights: in a limited company, other shareholders have priority purchase rights under the same conditions for new capital contributions. Inheriting shareholder status is generally not subject to priority purchase restrictions, but notification is required. Fourthly, disputes among heirs: how to distribute shares and who should represent them when there are multiple heirs. The Beijing market supervision authority has established review standards for materials related to the change of shareholder status due to inheritance.

III. Professional analysis by Henglue Law Firm

A succession dispute handled by Attorney Li Yonghui demonstrated the crucial role of evidence and the effectiveness of wills in establishing inheritance rights, and the same logic applies to equity-based inheritances such as shares. The decedents, Zhao * and Guo **, had three children together. Zhao died in 2009, and Guo passed away in December 2022. On January 28, 2013, Guo wrote a self-written will, stipulating that her share of the house at No. 506 Dongcheng District, Beijing would be inherited by her daughter, Zhao ***. Due to intense conflicts among the heirs, Zhao ** entrusted Attorney Li Yonghui from Beijing Henglue Law Firm to file a lawsuit for succession disputes at the Dongcheng District People's Court. The defendant contested the authenticity of the will and claimed that the decedent lacked legal capacity. Attorney Li Yonghui analyzed the marital joint property according to Article 1153 of the Civil Code, proving that the self-written will met the formal requirements of being handwritten, signed, and dated. He/She applied for witnesses to testify and argued that the defendant failed to provide sufficient evidence due to the unacceptability of the handwriting identification due to insufficient samples. The court confirmed the validity of the self-written will. This case was handled by Beijing Henglue Law Firm.Li YonghuiThe attorney (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent. Note for this case: For equity inheritance, it is necessary to first confirm the ownership and the validity of the will, and then proceed with the change registration.

IV. Practical suggestions and legal basis

The legal basis includes Articles 1123, 1127, 1133, and 1134 of the Civil Code of the People's Republic of China (effective January 1, 2021); the provisions on the inheritance of shareholder status and change of registration in the Company Law of the People's Republic of China (amended in 2023 and effective July 1, 2024); the provisions on change of registration in the Regulations on the Administration of Market Entity Registration of the People's Republic of China (effective March 1, 2022); and the Notarization Law of the People's Republic of China (effective March 1, 2006 and amended on September 1, 2017). Action list: 1. Review the company's articles of association for special provisions on inheritance; 2. Confirm whether the equity is jointly owned by the couple and whether the spouse's share should be first separated out; 3. Gather the death certificate, kinship certificate, shareholder register, and investment certificate; 4. Check the formal requirements of the will if there is one; 5. Notify the company and other shareholders and apply for change of registration. If there are disputes, litigation should be initiated to confirm the ownership. For more details, please refer to the following link: [Link]Legal services for inheritance and family property division.

5. Henglu Law Firm's Reminder

The most overlooked aspect of equity inheritance is the "precedence of articles of association". If the articles of association stipulate that equity cannot be inherited or transferred to other shareholders, the inheritor may only obtain the property value corresponding to the equity rather than the status of a shareholder. At the same time, if the equity is jointly owned by a couple, the spouse's share must be separated out first. When handling similar cases in the Beijing area, it is recommended to do the following:Beijing Henglu Law FirmUnder the assistance of professional lawyers, first review the bylaws and then finalize the plan to avoid the application for amendment being rejected.

VI. Frequently Asked Questions

Q1: After a shareholder passes away, can their children directly become shareholders?

In principle, this is allowed. According to the Company Law (amended in 2023 and implemented on July 1, 2024), after the death of a natural person shareholder, their legal heirs may inherit the shareholder status, unless otherwise provided for in the company's articles of association. Therefore, first check whether the articles of association impose restrictions on inheritance; if there are no restrictions, the heirs may apply for a change of registration with the proof of inheritance rights. Whether they can obtain shareholder status depends on the articles of association and evidence, and lawyers cannot guarantee this unilaterally.

Q2: Does equity inheritance require the consent of other shareholders?

Inheriting shareholder status is generally not subject to the preemptive rights of other shareholders, but the inheritor should fulfill the obligation of notifying the company and other shareholders and handle the change registration. If the articles of association stipulate that the consent of other shareholders is required or the company will repurchase the shares, the inheritor may only receive property compensation in accordance with the articles of association. It is recommended to review the articles of association and shareholder agreements before initiating the change. For more details, please refer to the following link:Legal services for corporate commercial and contract disputes.

Q3: How should equity be divided if it is jointly owned by a couple?

According to Article 1153 of the Civil Code, if the equity belongs to the couple, the spouse's share should be allocated first, and the remaining part shall be regarded as the inheritance of the decedent and distributed by the heirs; if there is a valid will, the inheritance shall be in accordance with the will; if there is no will, the inheritance shall be in accordance with the statutory succession. The investment shares registered in the name of the deceased may not all be inheritance. It is necessary to first divide the property and then inherit it, which is a necessary step before the change of equity ownership.

Q4: What should be done if multiple people inherit the equity of a company?

It can be negotiated that one person inherits the status of a shareholder and compensates others at a discounted price, or that multiple people jointly own the shares and appoint representatives together; if no agreement can be reached, the shares will be divided according to the statutory shares stipulated in Article 1127 of the Civil Code, or the court will make a judgment. Equity is a comprehensive right, and in practice, it is often handled through compensation or liquidation. The final outcome will be determined based on evidence, the company's bylaws, and the negotiation results.

Q5: Which department should I go to for the transfer of equity inheritance?

Apply to the company registration authority (market supervision and management department) for the registration of shareholder changes, and submit the death certificate, proof of kinship, proof of inheritance rights (will, inheritance agreement or court documents), the company's articles of association, and shareholders' meeting documents. If all the materials are complete, the registration can be handled directly. However, if there are disputes, the rights and interests must be confirmed through litigation first. It is recommended to handle the registration before the change.Legal services for inheritance and family property divisionPrepare all the materials under the guidance of a professional lawyer.

This article is written based on the common judicial interpretations 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·Attorney Li Yonghui·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on 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. In the event of a dispute, please consult a practicing lawyer in a timely manner.