A Study On Legal System Of Share Repurchase Of Listed Companies

The legal system of share repurchasing originated with the rising of capital market in American in 1970s. Share repurchase means that the company repurchases its own stock at certain price, brought by some of the shareholder by using capital with sovereign right or financing of debt. This part of stock is used as treasury stock or is canceled, so the money is reduced or the structure so the capital stock is adjusted. In legal nature, share repurchase is a special transfer of share between the company shareholders and the company itself. Using it correctly can protect investors, prevent manipulating share price and insider dealing. It plays a positive role in the development of security market .At present, the current national legislation on it mainly includes two models, such as "prohibited principle, exception permits", represented by US, and "allowed principle, prohibited exceptions", represented by Germany. These models have played a positive role on protecting the interests of shareholders and creditors, maintaining trade order and solving our own unique problems to the sub-equity in the early development of the market economy of our country. So the system of share repurchase is adopted by the"company law"of our country. However, the legal system of share repurchase is a new phenomenon in our country. We should see the drawback of the system in the practice, and with the further development of the economy, such as the simple legislation and the lack of operational defects increasingly exposed. This system may be the yoke of improving company's administration structure of our country if we using it incorrectly. Therefore, according to the practice of our country, this system should be fully stated to provide some useful advice to the share repurchase system of our country, by using the reference of legislation of foreign countries. As a special form of stock transfer, it often refers to the legal activity of a company (a listed company) to purchase outstanding shares at a specified price and in a particular way. In the end of essay, we focus on the consummation of the system of stock repurchasing in China's Corporation Law & Security Law, hoping to better this system.