On The Deadlock And Relief Measures Of Limited Liability Company

Recently, the corporation deadlock happens frequently, and therefore, more eyes have been put on the research of corporation deadlock. In order to make research easily, this article limits the subject to the corporation deadlock of limited liability company based on the premise that it happens deadlock easily in limited liability company. Chapter one of this article describes the basic issues of corporation deadlock, including its definition, characteristics, external behavior, causes and adverse effect which happens inside the corporation, and affect the benefits of various interested parties outside the corporation and break the social harmony as well. Chapter three of this article describes various relief measures, including precautions and subsequent relives and introduces some measures taken by the foreign counties (mainly refers to USA and German). In addition, this article emphasizes that except for resolving the corporation deadlock by using judicial dissolution, other alternative measures, including mandatory transfer of equity interest, mandatory spin off, appointing temporary directors, etc. can be taken to deal with the corporation deadlock. I introduce a progressive system to handle the corporation deadlock, i.e. mediate as pre-treatment process, judicial dissolution as final solution, and the mandatory transfer of equity interest and mandatory spin off as supplement through the above analyses.This article gives the definition of corporation deadlock thought theoretical analyses, comparative analysis and case analysis, i.e. corporation deadlock is the extramalization outcome inflecting internal conflict of the company and a stalemate situation which causes the operation of the company to enter into a paralysis condition. We understand that the deadlock happens easily in limited liability corporation, of which the fundamental reason is the broken relationship between investors and the restriction on the stock transfer, all of the shareholders can get ride of the stalemate situation by self-help hardly. In order to deal with such situation, this article emphasizes that the importance of precaution. The function of articles of association shall be put into full play and the precaution shall be designed for the foreseeable deadlock. Besides, I think the judicial dissolution shall be the final measure to deal with the corporation deadlock and shall be used directly when this are another relief measures which can be taken by complying with the priority principal of self-help, principle of interest balancing and the circumspect principle on judicial dissolution and by sufficiently considering the consolidating of legal effect and social effect. In sum, if some relief measures can be used to deal with the corporation deadlock rather than the judicial dissolution, such measures shall be deemed as a priority.