A Study On Legal System Of Share Repurchase Of Quoted Companies In China

Share repurchase refers to a company buying back its own shares that were issued to the public before and writing off them or holding them as treasury stock. In legal nature, share repurchase is a special transfer of share between the company shareholders and the company itself.Regarding the reasons of the producing and the long-term development of share repurchase, the western theory think that it may be used in saving the dividend or individual taxes, adjusting corporate finance lever, issuing the information or the signal to the investor, defending external taking over, shifting the wealth between the shareholders and influencing the creditor's equity of the possessor and so on. At present, listed companies repurchase the stock mainly by using several ways such as, the open market to repurchase, the contract repurchase, the batch repurchase in private as well as the contract exchanges in the practice.As the development and maturity of every country's capital market, share repurchase were widely used gradually as a means of capital operating and enterprise strategy through its multiple economic functions by states companies. However, many countries strictly limited the system of it due to certain limitations of the traditional theoretical understanding of Company Law and the reality of many drawbacks in the operational process. At present, the current national legislation on it mainly includes two models, such as"prohibited principle, exception permits", represented by US, and"allowed principle, prohibited exceptions", represented by Germany and France. This model has played a positive role on protecting the interests of shareholders and creditors, maintaining trade order and solving our own unique problems to the sub-equity in the early development of the market economy of our country. However, we should see the drawback of the system in the practice, and with the further development of the economy, such as the simple legislation and the lack of operational defects increasingly exposed. Therefore, how to identify the specific legislative principles and the leak detection system to improve the system, and make efforts to remove obstacles to the healthy development of capital markets become imminent.