In recent years, the development of a market economy boosted the frequency of the transfer of shares and caused many problems in relative juridical practice in China. Indeed, such judicial disputes mainly have occurred in cases concerned with the transfer of shares to a limited liability company. Although the new Company Act released in 2005 made revisions to improve the existing system, there are still remaining problems. The people-combined feature of limited liability companies is the root for the problems caused by transfer of shares. The Chinese Company Act prescribes a restriction on the transfer of shares and the procedure to amend the record of the shareholder in the limited liability company. Where a shareholder transfers his shares to a person other than a shareholder, the consent of more than half of all shareholders shall be required. Where the shareholders consent to the share transfer, other shareholders shall have the preemptive right to purchase the shares to be transferred on equal terms and conditions. After the share transfer is completed, the company shall cancel the capital contribution certificate of the original shareholder and issue a new certificate to the new shareholder, and also amend the record of the shareholder and his capital contribution in the articles of company and the list of shareholders, such amendments to the articles of company need not be voted for by shareholders meetings. Moreover, where laws, administrative rules, and regulations provide that incorporation of companies must be subject to examination and approval, the procedures of examination and approval shall be completed according to law prior to the registration of such companies. Therefore, where the transfer of shares needs the consent of other shareholders, or the approval of the examination and approval authority, it shall be effective when such conditions are met. It is very meaningful that the provisions related to the validation of transfer of shares are newly established in 2005. Firstly, the share holders recorded in the list of shareholders may claim and exercise the right of shareholders on the strength of the list of shareholders. Secondly, the company shall register the names of shareholders and the amount of capital contributions of the shareholders with the company registration authority and, in the case of any change thereof, apply for alteration registration, unless duly registered the above-mentioned items and any changes thereof shall not be a defense against a third party. This provision means that it is a criterion to identify the qualification of shareholders, to record in the list of shareholders in the relationship with the company, and to register with the company registration authority in the relationship with a third party. But there are still numerous problems to be considered, especially in regards to the preemptive right to purchase the shares, the responsibility to purchase the shares to be transferred, and the effect of the record in the list of shareholders and the alteration registration of a company.