Research On The System Of The Appraisal Right Of Dissenters

The modern corporations make decisions usually by the shareholders who possess the most stocks, this principle embodies the maxim of shareholders' democracy and capital's equality, and this principle can help corporation's propitious management. But if the corporation's change which bring the significant effect to the shareholders, how to protect the fewness dissenters' benefit and the corporation's development at the same time needs to be resolved stringently. So the appraisal rights of dissenters brought out.China has also adopted this remedy in its newly revised edition of Corporate Law in 2005 by adding two articles. Of course, this is a big step for our country's corporation law- However at present, the appraisal rights should be developed further more. We should establish the supporting system to develop the appraisal rights of dissenters in China.The paper starts from the introduce to the theoretic bases of appraisal right, including the theoretical base, legislative purpose and then makes a elaborate discussion on the system in the corporation laws of various country, and final presents the suggestions to revise and perfect the system in corporation law according to our background. With a focus on the procedures of the appraisal of the shares, carries out a comparative study on the appraisal statutes of various countries. According to the extensive analysis of the remedy, the author points out it is introduce and propose the appraisal right in China and it is useful for the development of Chinese corporate law.This paper contains three parts. Here the author just elaborates every part briefly. Part One: The basic theory to the appraisal right of dissenters. The first part talks about the conception, the characteristics, the basis theoretic and the value of the appraisal right. The appraisal rights of dissenters provides shareholders who are dissatisfied with certain fundamental changes of the corporation the option of having their shares repurchased by their corporation with fair value for cash. It originated from the United States and was provided by relevant laws in many other countries as a typical protection for minority shareholders under the notion of majority control. Above all, the creation to appraisal right of dissenters is the result which confines the abuse of majority shareholders'right. It provides a way to settle the conflict of interest between the majority shareholders and the minority shareholders when great changes would be take place in the company's structure. The following value tendency was contained by this system: the primary value target is to protect the majority shareholders'rights who seeking the company's structural changes. On the contrary, as a compensation for protecting the minority shareholders' anticipates interest, the corporation law confers the appraisal right of dissenters to them. In other words, it can settle the conflict of interest between the majority and the minority and achieve the balance.Part Two: In this part, I expatiate the running of the appraisal rights in practice: The content to the right of claim for stock repurchases held by the dissenters. The thesis makes a contrastive study on the system in the corporation laws of various countries and discusses it on the legislative styles ,which the companies applies to, the resolution proceedings, which the shareholders applies to, the procedure brought into effect and so on. Considering this system had been founded in America and it has developed about one more century, so that more discussion and introduction had been focus on America legislation.Part Three: The third part talks about the current situation of our legislation,This part is the end-result that making suggestions on the establishment of the appraisal rights in China Corporate Law for me to write this paper. And defect of the appraisal right of the dissentient shareholders and points out the system in effect in our country is too blurred to carry on. And, this part also gives advices on how to establish assorted regulations which will help the operation of the right more efficiently.Conclusion: The author thinks that the legislation was pressed for maneuverability and its scope of application was rigorously confined in China. Above all, the author thinks it is very necessary to protect the right of minority shareholders who enjoy the appraisal right of dissenters in our country .In this and that the appraisal part, rights I think that it should be a long term to appraise a system, is not the exception. Because the appraisal remedy is just one measure to protect the minorities, China should use legislations of all the countries for reference and perfects the system of protecting the minorities' interests.