The Study On The Legal Question Of MBO In China

Management Buy-out (hereinafter referred to as"MBO") refers to the management of the target company purchases shares of the target company by way of funding, thereby changing the shareholding of the target company and further benefiting from the restructure of the target company by themselves. In fact, MBO emerged in American since last 70s has significantly taken effect on solutions of corporate property rights, improvement of corporate governance through over 20 years experience proved. In china it also play an important role in the reform of state- owed companies. For this reason, MBO has been imported to and have developed rapidly in China. In the view of MBO implementation in China so far, however, there are still a few problems and legal drawbacks. In the point of legal view, this paper takes use of positive and comparative research methods to unveil genuine legal meaning of MBO as well as intend to explore a normative MBO implementation with respect to the specific situations of China.This dissertation is composed of preface, text and conclusion. The text has been divided into three parts with as below:Chapter one: It focuses on the summary of management buyout. In this Chapter, It gives a concrete introduction of definition and basic theory of management buyout. This chapter focuses on and well explains the development of MBO in western countries. In addition, it discusses the theoretical base of MBO. This chapter is in order to give an integrated understanding of MBO. Chapter two: It focuses on the current situation of the development of MBO in our China. It introduces the special background of MBO in China and makes a concrete comparison of management buyout between western countries and China.Then this chapter focuses on problems that management buyout faces in China, including unfair price of share sold, violation of rules and regulations in financing, the seriously unstandard information disclosure, the controlling role of top managers, in one word, loss of state-owed asset and damage to minority shareholders as well as legal obstacles in performing management buyout. Only these problems are reasonably resolved, can management buyout have a sound effect in reform of state- owed companies.Chapter three: It points out the countermeasures and advices of how to solve legal problems of management buy-out. Concentrating on problems refered to in chapter Two. The chapter lays out and analyzes various legal drawbacks and potential legal risks raised in the situation of MBO in China, which are based on all chinese rules and regulations involved in MBO. Then it provides countermeasures and suggestions under the present conditions on this basis.