Shareholders To Exit The Legal System

The article focuses on exit mechnismen of shareholders, in detail on initiative exit and passive exit ways and relevant systems. The article includes three parts. The first part is theory study on exit mechnismen of shareholders, the second part is on initiative exit mechnismen and the third part is on passive exit mechnismen.In the first part we know that the exit mechnismen of shareholders is result of balancing between contrary factors. The contrary factors include contradiction between personal characteristic and capital characteristic of company, contradiction between protection of shareholders and protection of creditors, contradiction between fair and efficiency, contradiction between company autonomy and national enforcement. The competition between personal characteristic and capital characteristic influences the exit ways of companies with different form, the competition between protection of shareholders and protection of creditors influences the construction space of exit mechnismen of shareholders, the contradiction between fair and efficiency influences the process and target of exit mechnismen of shareholders, the contradiction between company autonomy and national enforcement influcences the change ability of exit mechnismen of shareholders.The second part is on initiative exit mechnismen of shareholders. This part inclues share transfer of closed company, appraisal right and judicial dissolve. In share transfer the restrictive conditions and efficacy of transfer contract and transfer activity are central items. According to this text the restrictive conditions have no influence on transfer contract, but real influence on transfer activity. The appraisal right has more functions, but the basics function is to provide an exit way for shareholders. Our company law has stipulated appraisal right, but the ruls have many defects. When deadlock occurs, company can not regular operate. Shareholders can not exit from company through other ways, judicial dissolve provides shareholders in deadloci an exit way.The third part is on passive exit mechnismen of shareholders. This part includes forcible redemption of shares, cash out merger, squeeze out of minority shareholders, forcible transfer of shares for employment and judicial execution of shares. The passive exit means that perhaps the shareholder do not want to exit, but must exit from company because the for passive specially stipulated reasons and conditions happen. The forcible redemption of shares means that company may forcibly obtain and write off shares when the in company contract stipulated reasons occur. Cash out merger means that the majority shareholder can freeze out minority shareholder through cash payment in merger between majority shareholder and company. The squeezing out of minority shareholders means that the majority shareholder with overwhelming shares has the right to buy the rest shares of minority shareholders and the minority shareholders must sell their shares. The forcible transfer of shares for employment means that shareholder obtains the shares because of employment, when the shareholder loses employment he has no longer reasons to continue holding the shares. So the shareholder must sell out his shares for employment. The judicial execution of shares means that the shareholder must exit from company because of his creditor. Although the reason leading to exit has nothing with company and other shareholders, but for closed company the interest of company and other shareholders must been taken into consideration.