Study On Problems Of Management Buy-Out

This paper has explored the problems and risks in the course of developing Management Buy-Out. The theoretical framework of research based on existed theories helps survey the course of MBO in China and justifies the positive analyses as well as polices application. Then practical solutions are forwarded following careful probe of Management Buy-Out. Holding the methodology of integrating theory study and positive analyses, the paper focused on Management Buy-Out and managed to come up with conclusions as following.To develop MBO can decrease acting cost of enterprises, transform the administrating structure of corporations, rectify the business policy of the corporations, increase the stock price and achievements of corporations, and make the investors to have a good view of the corporations' tendency, realize the entrepreneurs' value which is devaluated for long time. MBO, one of Lever Buy-Out, was found and given a definition by Mike Wright in 1980. The manager of the corporation becomes the owner of the corporation through MBO. MBO stem from western country and get a broaden developing in western countries. In 2001, MBO get a broaden developing in China, especially after December of 2002.MBO has many defects although it has many merits, including legal risks, standardized risks, the problems of purchasing funds, the running off of the state-operated property, and the problems of moving process.Due to the different risks and problems of MBO, there are many disadvantageous influences and offset its contributions to national economy. Study suggests the main constraints of Management Buy-Out: It's groundless to fix a price, the information published not confirm with regular standard, purchase procedure is not transparent, purchase action is not with market law, and also policy restriction. Consequently, the paper put forward solutions to improve management buy-out:1) The policy to evade the inside risk: the main way is to select suitable enterprisesto develop management buy-out;2) To ensure the transparent and the market standard of the purchase procedure: the main point is to guarantee the justification of the purchase price, to strengthen the transparent of the information announcement;3) To consummate the mechanism of supervise government: which the work should be done in the supervise department of government;4) To emancipate the mind, decrease the government action in the enterprises purchasing;5) To care for the latter developing of the MBO, the purpose of MBO is to pursue the biggest profit of the enterprise;6) To consummate the environment of circulating necessary funds;7) To solve the funds and taxes problems of MBO, this is a better way to solve the problems of MBO.8) To accelerate the legal building of Management Buy-Out;9) To augment the circulation way of purchasing funds.