Corporate Deadlock And Its Judicial Intervention Institution Analysis

As one of the greatest inventions of the modern society, corporate is an important pushing force of the social development. But corporate deadlock is a frequent obstacle in business running which is not only harmful to the corporate itself, but also affects the shareholders, creditors of the corporate and even the public. Article 183 of the amended Corporate Law of PRC has established judicial dissolution and provided a legal basis of judicial intervention for the deadlock situation. But we should not simply associate the corporate deadlock with judicial dissolution, because corporate deadlock is only one cause of action for judicial dissolution, and judicial dissolution is not the only way of breaking the deadlock. Such remedy is to some extent poison rather than medicine to the corporate and the shareholder who does not want to end the business. This one single provision of the amended Corporate law is too general and principle, which is in lack of feasibility. For the above mentioned reasons, this article is focused on the realistic task of analyzing the concept of corporate deadlock and seeking plural judicial remedies for it.This article is constituted by the following four chapters:Chapter I The Basic Issues of Corporate Deadlock. This chapter deals with the basic legal issues of corporate deadlock such as the definition of the corporate deadlock and its characteristics, as well as its environment, causes, classifications and its harmful results. The analysis of definition and characteristics gives us a clearer picture of what deadlock is, and we further limit the discussion in the closely held corporation. The causes lead to the deadlock consists of the outer factor, inner factor and the effect of the culture in our country. Last two part of this chapter discussed on the classification of corporate deadlock according to different standards, and the harmful result it will does to the corporate, its shareholder, other interest-related person and society.Chapter II The Theoretical Discussion on the Judicial Intervention into Corporate Deadlock. This discussion mainly focuses on the rationality of judicial intervention into the inner management of a corporate and the legal basis (fiduciary duty, reasonable expectation and nexus of contract theory) for intervention into the corporate deadlock.Chapter III The Comparison and Analysis on the Means of Judicial Intervention into Corporate Deadlock. These means of judicial intervention includes involuntary dissolution, forced buyout and third-party alternatives, which are already very mature in America corporate laws or judicial precedent. And analysis is made on the advantages and disadvantages of each means.Chapter IV The Suggestions on Perfecting the Deadlock Judicial Intervention Institution of China. Firstly, interpretation is made sentence by sentence on the Article 183 of the Corporate Law so as to enhance its feasibility in judicial reality. Secondly, details are given when discussing the"forced buyout"as an alternative to the involuntary dissolution and the means of figuring out the buyer and the fair price.This paper is only a primary investigation on corporate deadlock and its judicial intervention institution, and better productions will come out in the near future to establish a perfect mechanism in breaking the corporate deadlock in China.