Study On The Right Of Dissent And Appraisal In Korea

The appraisal right of dissenters is a mechanism which balances the principle of"Capital Majority Decision"and protects the minority shareholders. It provides a way out of the corporation for the dissenting shareholders who have got fair and reasonable remedy which at the same time ensures policy-making mechanism of the corporation for smoothly going on. Corporate Law of our state gives shareholders the right to dissent and to obtain the appraised value of their shares in both the public company and the limited liability company, which correspond to the trend of protecting the interests of the minority shareholders and provides a perfect system for balancing the interests of shareholders. However, whether the market, the intermediary and the court can fairly estimate the value of dissenters'shares determines the effect of the appraisal remedy which targets to protect the minority shareholders. Therefore, it is necessary to fully study the experience of other states and further research on corporate governance so as to establish the share repurchase system.This thesis is divided into four parts. Chapter One introduces the fundamental theory of the right of dissent and appraisal. Chapter Two discusses the applicable scope of the right of dissent in Korea. Chapter Three discusses the exercise of the right of dissent and appraisal in Korea. Chapter Four introduces the estimation of the value of the dissenters'shares in Korea.Chapter One. The Fundamental Theory of the Right of Dissent and Appraisal: In the beginning of this chapter, we discuss the definition of share repurchase in a narrow sense and then we analyze the function and the nature of the right of dissent and appraisal. The right serves to provide a way out of the corporation after the sale of the shares and when the relationship between the majority and the minority shareholders has greatly changed, overcoming the defect of the principle of"Capital Majority Decision"and making the relationship between the majority and the minority shareholders more fair and reasonable. The right of dissent and appraisal is the right of one's own benefit which should not be deprived by articles of incorporation and also the right of taking effect only by the claim of the minority shareholders, not by the agreement of the corporation. Exercising the right means that the corporation and shareholders set up a contract and that the corporation should pay the price in the legal time. The right belongs to the shareholders whose place the creditors cannot take to exercise the right.Chapter Two. The Applicable Scope of the Right of Dissent in Korea: In the beginning, we discuss the factors which determines the application of the right of dissent. On one hand, the conduct of the corporation must be serious which may causes changes in the operation of the corporation. On the other hand, the conduct of the corporation must have a great effect on the relationship of shareholders. On the basis of the two factors, we analyze the scope of the conduct of the corporation in the extensive and intensive ways. The scope should be intensive in view of helping the corporation apt to adjust to the changes of market economy at every moment while it should be extensively considering the protection of the minority shareholders.Chapter Three. The Exercise of the Right of Dissent and Appraisal in Korea: The chapter is divided into three sections which discuss the subject and the object of the right of dissent and appraisal and the procedure to follow. In section one we try to affirm the subject according to"the identity of shareholders"by analyzing the identity of shareholders and the dissenters, shareholders who join the corporation after the decision of the board of the directors, and shareholders who have no voting rights in the unlisted corporation and whether to admit the right of dissent. In section two, we discuss the object by analyzing the time when we decide to affirm the right of dissent. In section three, we study the procedure designed to exercise the right and the way to improve the procedure which the Korean scholars have proposed.Chapter Four. The Estimation of the Value of the Dissenters'shares in Korea: In this chapter, we study the estimation of the value of the dissenters'shares in Korea In section one, we discuss the factors which determine the price of the shares including the consistent value, net capital value, market value and profit value of the corporation, the business of the corporation, the financial situation, the distribution and related comparative value among which net capital value, market value and profit value are the most important. In section two, we discuss the simplification of the procedure of the estimation which includes the time and the cost of applying to the court to estimate the value.