The Study Of The Related Legal Problems Of The Management Buy-outs

Being popular as a model of enterprise buy-outs in the Western countries in the duration of from 1970 to 1980, the management Buy-outs ( hereinafter referred to MBO) is one way for the enterprise management to become the owner of the title with the take-over the capital or share rights of the enterprise run by the management by the loan and the finance. The MBO and the traditional enterprise merger-acquisition differ in the subjects taking part in the take-over and the measures for the finance definitely. The agent cost of the enterprise can be reduced and the business adjustment of the enterprise can be made into reality effectively by the MBO, which simultaneously is an effective measure for clearing the property and making the privatization of the enterprise into reality in the period for the transfer of the economic system in the country with the public-owned system. With the twenty years of the economic reform and development, most enterprises in China have been in the competence with the international enterprises after the establishment of the system of the efficiency and the beneficial result for the economy. With the grown-up of the enterprises in China, many problems of the uncertainty of the ownership, the non-existence of the ownership and the bad management efficiency puzzling the Chinese enterprises (including the state-owned enterprises, the collective enterprises and the private-owned enterprises) have become serious. The above-said problems prohibit the development of our national enterprises in the international market , therefore the property system of the enterprise shall be reformed. As one kind of system creations, the MBO reflects the dramatic reform and change of the corporate governance in the Western nations, it simultaneously brings the helpful idea for the public-owned countries, especially for the property reform and the capital adjustment of our state-owned enterprises.The author in the article illustrates the system of the MBO, and discusses the related legal problems of the MBO with the theory of the economics and law by the comparative analysis and the positive analysis. The article is divided into six sections as follows: The part of the preface introduces the background and the cause in writing the article. Chapter one is for the introductions of the origin of the system of the MBO, the sorts of the MBO and the significant effects on the social life. Chapter two is for the measure and the general performance process of the MBO. Chapter three is for the discussion of the related legal problems of the MBO and the current related laws and regulations on the basis of the introduction of the related laws and regulations for the MBO in the Western nations. Chapter four is for the discussion of the current development, and the current serious problems and the legal prohibition of the MBO in China on the basis of the compare of the Sino-foreign MBO. The author brings the ideas of the reduction of the related legal prohibition of the MBO and the perfection of the legal system of the MBO. In the continued part of the article, the author illustrates the ideas of facing the newborn things dialectically, not imitating blindly the creative systems of the developed nations such as UK and America or repudiating them totally without any analysis on the creative system of the MBO. On the contrary, our nation should establish the related legal system to have the MBO serve the national economy reform much better in relation to our national conditions.