On Some Elements Of The Appraisal Right Of Dissenters In The Limited Liability Company

Theoretically majority rule is executed in a company's policy decision. In practice majority stockholders, with in hands stock holds which give them rights of decision, can easily overtop their own ideas over others. When there is a short of a strong restriction on them, it will leads to the majority's despotic control which will do harm to the interests of the minority stockholders. Against this situation many measures are carried out in the Contract Law in all countries and areas to protect the minority stockholders, including the appraisal right of dissenters.There is a public market for the free exchange of stock holds of a company. When the minority stockholders think their interests are harmed they can sell their shares. But in a limited liability company there is not a public market for the dissentient stockholders to exchange their shares. The holders must get approved from at least half of the others to do their exchange. In many companies it is even contracted to forbid the selling of the stokeholds to the outers to protect their closing and people corporation. Under these conditions the stockholders get into the one-way street when they put their investment in a limited liability company, and they can neither maintain their rights or get out of it which does not exist in the stock company. Item 75 in the Company Law of our country lists the appraisal right of dissenters. But it is too simple and has some unreasonable elements, compared with the advancement in other country's law. This thesis, starting from the basic theory of the appraisal right of dissenters in the limited liability company, with all-round study of item 75 in the Company Law, points out the weakness of this item and puts forward the author's conceiving to perfect it.The thesis consists of four parts as following:The first part gives a brief introduction to the concept of the appraisal right of dissenters in the limited liability company, the demonstration of its justness, the nature of this right and a comparison of it with other relative rights. The appraisal right of dissenters is the right of the victim stockholders to claim for the company to buy back their stocks when their interests are harmed by the decision from the shareholders meeting. It is based on the theories of invalid expectation, balancing, equality between all stockholders, dissociable board and valuable chance for repentance. It is an important right for the stockholders, and belongs to the self-profitable right, the individual stockholder right and the stockholders'inherent right with the quality of statute right in civil law. Compared with the right of claiming for repealing the invaluable board's decision, this right cost lowly in practice and keeps the company running efficiently. And it has less side-effect on the company and the relative stuff than the suit right of dismiss the company. It is also different from the right of transferring stocks.The second part describes the right body and the factual elements of The appraisal right of dissenters in the limited liability company. The author researches the body and the factual elements regulated in the Company Law with the study of semantic analysis, and points out the weakness of the regulation with the study of comparative analysis. According to these the author suggests to amend and explain the Company Law in the future on the standard that whether the stockholders'expectation is valid to confirm the body and the factual elements of this right.The third part introduces the procedure to exert the appraisal right of dissenters. With the method of comparative analysis the author points out the weakness in the exerting procedure of the right regulated in the Company Law, and on the basis of referring other countries'legislation examples, puts forward such project to reconstruct this regulation, as increasing the company's responsibility of noticing its stockholders, the claiming of the dissentient holders to buy back their shares by the company, etc. to protect the interests of the dissentient holders.The fourth part introduces the restriction on the appraisal right of dissenters. The stockholders may bring some side-effect to the company and the creditor when they exert this right. To decrease this side-effect to the lowest level the protecting mechanism for the creditor shall be perfected in the Company Law. The author suggests the immunity of company's responsibility of buying back the stocks and the invalidation of the appraisal right of dissenters.