Research On The Legal Protection Of Stakeholders In The Merger

The merger, which can not only decrease the cost of companies and improve the economic benefits of companies but also provide the cost advantages for the whole social economy, establish the economy of scale and improve the whole social economic benefits, has become the common mode of expansion of companies. In the platform of companies, there are the interests of not only stockholders but also creditors, employees, customers, communities and governments; therefore, in the management of companies, both the profit maximization of stockholders and the interests of other stakeholders should be paid attention. In this paper, by the use of the theory of stakeholders and the ideas of balancing of interests, the emphasis is made on the discussion of the interests of creditors, stockholders, governments (tax problems) and employees in the merger. In Chapter 1, the protection of the creditors'interests is mainly dealt with. The theoretic basis of the protection of the creditors'interests in the merger is first discussed, and the rights of the protection of the creditors'interests in the merger are dealt with in details and then the protection of the potential creditors'interests in the merger is discussed. The merger produces the elimination, change, and establishment of companies as well as the legal effect undertaken by the summary of rights and obligations. The theory of dismissal and clearing of companies explains the theoretic basis of the protection of the creditors'interests in the merger from the perspective of the dismissal and clearing of companies. The theory of change of the debtors explains the theoretic basis of the protection of the creditors'interests from the perspective of the change of the debtors caused by the elimination and change of companies in the merger. The theory of the decreasing of the property of the debtors'companies explains the theoretic basis of the creditors'interests from the perspective of the possible direct or indirect decreasing of the property of companies in the merger. In the merger, the creditors enjoy the rights of being informed, questioning and claiming the compensation for the damages. The creditors'right of being informed requires that they should be informed of the obligations in the merger. The creditors enjoying the right of questioning should include the creditors of eliminated companies and the companies continuing to exist. The creditors whose legal rights are produced before and after the announcement of the merger should enjoy the right of questioning. During the right of questioning, the mandatory provisions should not be changed by contracts. When the creditors question, the amalgamated company should pay off the debts for the creditors'rights which expire and provide the guarantee for the creditors'rights which have not expired. The creditors enjoy the right of claiming the compensation for the damages when the damages are brought about to the creditors because the amalgamated company does not carry out the obligations of informing, paying off and guarantee in the merger. In the merger, there exist two potential relations of creditors'rights. The one is the relation of unfound debts in the merger. The other is the relation of the debts that are produced after the merger and should be undertaken by the original amalgamated companies. In the merger, the protection of the two potential creditors should not be neglected. In Chapter 2, the protection of the stockholders'interests in the amalgamation of interests is dealt with. In view of the principle of the determination of most capital bringing about the conflict between the holder of minor stocks and the holder of major stocks, it is necessary that a deep discussion should be made on the stockholders'resolution system and the claiming rights for counter-purchase of stocks of questioning stockholders in the merger. In the amalgamation of companies, the principle of the determination of most capital should be applicable, with a special resolution made in the stockholders'conference of the company. Such a stockholders'resolution system is taken by the company law of all the countries. It is necessary to regulate the shares of the right to vote represented by the stockholders present in the stockholders'conference when the special resolution is made in the stockholders'conference of the Co., Ltd. in the Company Law in China. It is suitable that the asymmetric amalgamation and simple amalgamation shouldbe introduced to decrease the procedures of amalgamation and the transaction cost. In the merger, it is the special measure of protecting stockholders taken by many countries to give the claiming right of counter-purchase of stocks to the questioning stockholders, which gives the relevant compensation and the approach to leave the company to the stockholders of minor stocks who have not got the expected interests, realizing the balancing of interests. There are relevant regulations on the applicable range of companies and stockholders, exercising procedures and exclusive effect of the claiming right of the counter-purchase of shares in US, Japan, South Korea and Taiwan of our country. However, there exist obvious defects in the regulations on the stockholders'claiming right of the counter-purchase in our country; therefore, it is necessary to refer to the regulations of relevant countries and areas for perfection. The applicable range of companies of the claiming right of the counter-purchase of stocks should be expanded. The range of stockholders applicable to the claiming right of the counter-purchase of stocks should be made clear. The exercising procedures of the claiming right of the counter-purchase of stocks should also be made clear. The exclusive effect of the claiming right of the counter-purchase of stocks should be determined. In Chapter 3, the protection of the governmental interests (tax problems) is discussed in the merger, in which the tax, as the concrete representation of the governmental interests, should be paid attention. Owing taxes is one of the important factors influencing the merger and also the important supervising content of the tax authorities. As a matter of fact, owed taxes are the legal debts based on the tax law between the taxpayer and the government. The tax law regulates that the tax authorities should enjoy the right of being informed in the merger, but it is not clear whether the tax authorities enjoys the questioning right. Viewed from the allocation of rights, the tax law allocates the rights of detainment, freezing, mandatory execution, administrative punishment and priority of tax, etc. to the tax authorities. If the tax authorities actively exercises the existed rights and governmental interests in owing taxes can be practically protected, it is unnecessary for the tax authorities to have the questioning right.In the merger, the problem of the value added tax mainly involves the problem of the qualification of the general taxpayer and the problem of the amount of mortgaged tax, with the two problems related to each other. After the merger, the eliminated companies can retain the qualification of the general taxpayer of the value added tax and enjoy the mortgage right of the amount of mortgaged tax. If the eliminated companies cannot retain the qualification of the general taxpayer of the value added tax, they should not enjoy the mortgage right of the amount of mortgaged tax. At this time, if the companies continuing to exist are the general taxpayers of the value added tax, they can inherit the amount of mortgage tax of the eliminated companies. In the amalgamation of the new-built companies, the new companies, of course, cannot inherit the amount of mortgage tax, which cannot be enjoyed by the eliminated companies. The problem of the income tax in the merger involves the agents concerned, including eliminated companies, the stockholders of the eliminated companies, the companies continuing to exist or the new company as well as the stockholders of the companies continuing to exist or the new company. For the income tax in the tax paying amalgamation and the tax-free amalgamation, the required obligations undertaken by the agents concerned are not completely the same. In Chapter 4, the protection of the employees'interests in the merger is mainly dealt with. When the treating modes of the labor contracts in the merger are different, the impacts on the employees'interests are different. The direct inheriting mode is favorable to protect the employees'interests and the indirect inheriting mode can more fully reflect the autonomy of the change of the labor relations. In the protection of the employees'interests of the merger, there exist the problems of low levels of legislation, more concerned rules and regulations as well as contradictions to each other, etc. in China. In legislation, the problem of inheritance of labor amalgamation and the conditions and procedures of the change and dismissal of labor contracts should be made clear. The criteria for cutting down the employees in the merger should be regulated to practically maintain the employees'interests.In the merger, the interests of the stakeholders should be balanced. In this paper, it is concluded that the principle of priority of efficiency and considering equity at the same time should be taken as the value pursuit of the company law and the relevant laws in the current period of our country to give a good disposal to the balancing between the whole interests of the company and the individual interests of the stakeholders and between the interests of the company and the social interests, decrease the transaction costs, encourage transactions and facilitate the merger.