A Study On Close Corporation Problem And Its Legal Relief

The limited liability company (LLC) created by German in 1892 is known as" legislators'invention". The limited liability company has the paradoxical characteristics of joint capitals and people combination which make the shareholder sink into close corporation problem. The close corporation problem is common and particular to limited liability companies. But in reality, restrictions on the transfer of shares often lead the shareholders to the dilemma--the phenomenon of close corporation problem is undoubtedly the greatest problem in practice. However, in our country, both the statutory and judicial practice had ignored such things for a long time, resulting the great detriment to the interests of shareholders. In the new "Company Law", there are a lot of changes of LLC to a larger extent. It also provides a number of relief for close corporation problem, though still imperfect. In this context, this article, from the perspective of law and economics, through comparative methods, methods of weighing the interests, case analysis methods and theoretical and empirical analysis of the phenomenon, should seek best relief mechanism of close corporation problem. The article includes six parts:The first part is foreword. This part will preliminarily introduce the close corporation problem.The second part focuses on the basic issues of the close corporation problem. This part is divided into four chapters. The first chapter analyses the fundamental characteristic of the LLC and explores the basic manifestations of the plight and their mutual relations, and notes that those manifestations are closely related phenomenon as a direct result of the LLC inevitably, so their settlement mechanism is directly the same.Chapterâ…¡analyses the reasons for the close corporation problem. The illiquidity of shares subject to the closed nature of LLC is the premise of close corporation problem and the lost of its nature of person joint is the essence of factors. The abuse of the majority rule and the conservative concept of the capital credit are the direct causes.Chapterâ…¢points out that the damage of close corporation problem including both internal and external. And it's necessary to solve the problem. The third part analyses the issue of relief mechanism of different countries. We compare the typical national legislation and empirical analysis in both two legal systems, obtaining the basic characteristics of the relief mechanism.The fourth part is the close corporation problem and the status of relief mechanisms in China. The China's social realities, especially the human environment better breed close corporation problem. In this part, we analyze the legislative and judicial resources of repurchase right for dissent shareholders and propose how to improve the law.The fifth part is the analysis of the company dissolution regulations and proposal of how to improve the law.The sixth part is the relief mechanism except for the regulations above, including arbitration and company articles of association.