On Company Law's Regulatory Of Acquiring Own Shares

The Company Law of the People's Republic of China, which has been amended and adopted on October 27, 2005, revises relevant regulations about corporation's acquisition of its own shares in Article 75&143. In these articles, the company (amendment) law 2005 augments company's power of acquiring its own shares, and adjust some procedure provisions. To some extent, it proves that the law of 2005 has relaxed the prohibition of company acquiring its own shares. And on the one hand, the development of the law states that Chinese legislators value the company's free operation and self-governing. On the other hand, it manifests that the construction of company system in China has gradually improved, and that the methods of capital operation and government mastered by our companies, are progressively in line with international practice.However, Chinese legislators have habitually taken any system innovation by way of"wading across a stream by feeling the way", for Chinese economy has been transforming into market economy, and this is exemplified by the amendment law 2005. For example, the amendment law 2005 takes a conservative view on absorbing and learning from some abroad company laws'achievements. So is the system of corporation acquiring its own shares. In addition to quiet a few prohibitions and restrictions, there is a legal loophole that is the 2005 law does not provide provisions about purchase own shares in disguised forms, such as subsidiary company acquiring parent company's shares. Meanwhile, the provisions of company law of US, EU, U.K., Germany, Japan and Taiwan are superior to those of the law 2005 by comparative method. Therefore, the article endeavors to resolve two questions: Is there a necessary to take a further step to relax regulations on purchasing own shares in China? And what the company law of China should do may make full use of advantages and do away with bad practice of acquisition own shares.The article is divided into following chapters:Chapter one sums up regulatory of acquisition corporation's own shares: firstly, it introduces briefly the conception and the special characteristic; secondly, it analyses theory reasons resulted in prohibition in traditional company law, of relaxing regulatory in modern company law, and practice importance of relaxing regulatory of purchasing own shares.Chapter two studies on relevant regulatory in US company law, and the latest amendments of purchasing own shares in EU, its major member stats, Japan, and Taiwan in the course of Modernising company law. Then, the article concludes that it is unnecessary to rigidly prohibit acquisition of own shares, that it should promote what is beneficial and abolish what is harmful by properly restraining it in legislation, and that relaxation of purchasing own shares has became a legislative trend.Chapter three generalizes and sums up the regulations in company law of those nations and region, probes what company law should do in regulating acquiring corporation's own shares: firstly, establishing the principle of relaxation; secondly, fixing the scope of lawful acquisition; last, analyzing, from concrete provisions'perspective, constitutive conditions about lawful acquisition, such as the power of making decision, capital, and volume, and effects and responsibilities of illegal acquisition.Chapter four makes a study on the concrete provisions of acquiring own shares in the amended Company law, the amended Securities law of China and Management rules on listed company repurchasing the masses'shares etc., permits that the above regulation and rules make great progress, meanwhile points out that there are still some shortcomings, and then put forward, in China company law's context, some proposals to improve the regulatory of acquiring own shares.