Study Of Management Buyouts (mbo), The Legal System

Based on a discussion of the implications and theoretical basis of management buy-out (MBO), this paper makes a positive analysis of the status quo and characteristics of China's MBO, highlighting the legal system of MBO subjects, the legal system of MBO financing, and the legal issues of the pricing of the transfer of state-owned assets. There are seven chapters in this paper. The following is a briefing on the content of each chapter: Chapter One: Introduction. It is a brief account on the selection of the topic, the major issues of study, the status quo of the research in this field both at home and abroad, the research methodologies, and the structure of the paper. Chapter Two: The implications and theoretical basis of MBO. This chapter accounts for the concept and features of MBO, its origin, its development in foreign countries and its theoretical basis. The chapter starts with an understanding of the implications of MBO and its relationship with other concepts that are closely associated with it. Then it goes on to supply a systematic introduction and analysis of the development abroad and theoretical basis of MBO. This paper points out that the most essential jurisprudential basis of MBO should be the theory of agency cost. To comprehend this point accurately, it needs a mastery of the objective nature of enterprises as productive organizations. In addition, it is pointed out in the paper that the post-MBO performance improvement of the target enterprises may be a result from the transfer of wealth or the creation of new values, or a combination of the two. Chapter Three: Analysis of the status quo of MBO in China. This chapter, based on a summary and analysis of the three stages in MBO development in China, explores the MBO features in China and their causes, and the major differences between China's and foreign MBO. It is pointed out that the "indigenous" significance of MBO in Chinese enterprises lies in the reform of the property right and improvement of the governance structure of state-owned and collective-owned enterprises in China. Through the analysis, it is believed that the preliminary conditions are there for MBO in Chinese enterprises. Chapter Four: Study of the legal system concerning MBO subjects in enterprises of China. As to MBO subjects, this paper summarizes the types of China's MBO subjects and points out that all the currently existing MBO subjects have obvious limitations. As a major type of MBO subject in the future, trust organizations need to strengthen their power and credit; the improper legal restrictions imposed upon them need be eliminated as soon as possible; and a system of taxes and fees needs be established for them. In terms of the scope of MBO target enterprises, it is believed that the scope of MBO target enterprises should not be pre-established by laws or policies, and that it is detrimental to the further reform of the state-owned enterprises (SOEs) to exclude the large SOEs, the state-owned holding enterprises, and the listed companies from MBO. Chapter Five: Study of the legal system of China's MBO financing. After systematically studying and comparing the major financing patterns and their respective features of foreign MBO with the financing status quo and major patterns and their limitations of China's MBO, this paper points out that a breakthrough in China's MBO financing plight depends on the improvement of trust legislation and the deregulation of enterprise financing. Enterprises should be given more freedom and more alternatives in financing. Chapter Six: Study of the legal issues concerning the pricing of the state-owned assets transfer in MBO. This chapter, based on a systematic analysis of the status quo of the pricing of China's state-owned assets transfer, makes a differentiation between the concepts of the value of stat-owned assets and the drain of state-owned assets and explores such practices as net assets pricing of state-owned assets in MBO. It is believed that the method of net assets pricing has a reasonableness and positiveness...