The Legal Study On The System Of Corporation's Acquisition Of Its Own Shares

The system of corporation's acquisition of its own shares has an irreplaceable effect on respects of optimizing the structure of corporate financing, adjusting the total capital, lifting up stock price and stabilizing capital market. Meanwhile, this posed a challenge for maintaining the capital adequacy, protecting small shareholders and creditors. Different countries adopted different models to corporation's acquisition of its own share. Some adopted "prohibition in principle, permit with exception", the other adopted "Permit in principle, prohibition without exception". Item No.143 of The Company Law of the People's Republic of China takes more seriously legislative attitude. This article tries to compare different countries' legislations in order to learn from the advanced legislative content, and combined with the current situation of our country to offer suggestions to perfect the system of corporation's acquisition of its own share to fit with the developing trends of modern international company law.Except for introduction and conclusion, this article is made up of four parts.The first part is mainly analyzing the reasons why company should obtain its' own share system. Firstly, define "company" this article will discuss next, and define the meaning and scope of corporation's acquisition of its own shares, so as to lay foundation for the following expatiation. Secondly, conclude the main reasons of denying corporation's acquisition of its own share from home and abroad legislations, and then come to the conclusion that the denying reasons above are not insufficient to prohibit company from obtaining its' own share through respectively analyzing the denying reasons. Finally, expatiate the legislative value of corporation's acquisition of its own shares.The second part mainly compares the two legislative models. According to different countries' legislative content has different attitudes (loose or strict) towards the system of corporation's acquisition of its own share, they can be generally summed up as "prohibition in principle, permit with exception" and "Permit in principle, prohibition without exception". This article adopted methods of both comparative research and historical research, elaborate on the respects of forming reasons from legislative model, lawfully obtained reasons, access to financial resources, disciplinary consequences, and authorities. Meanwhile, combined with our countries' legislative reality, it educes how to make choice of our countries' legislative model.So the following parts will pave way for our countries' legislative construction. The third part is mainly about the legislative review of the system of corporation's acquisition of its own share in our country. First of all, retrospect the developing process of the system of corporation's acquisition of its own share in our country. And then outline how our country's current legislations regulates on company obtaining its' own share system. Finally, expatiate on the systematical deficiencies of the system of corporation's acquisition of its own share in our country, and explore deficiencies in the respects, such as scope of lawfully obtained its' own shares, disposal of illegally obtained behavior, managing executives' civil liability for compensation and off-law behavior regulation.The fourth part is suggestions to perfect the system of corporation's acquisition of its own share in our country. Firstly, elaborate on how to enlarge the scope of company obtaining its' own shares, focus on analyzing our countries' legislative regulations of obtaining shares on the purpose of stabilizing stock price, and elaborate on the reasons in favor of obtaining own shares for converting financial derivatives into shares. Secondly, discuss the legal effect of obtaining own shares from entity regulation respective to perfect relative regulations concerning access to financial resources, price decision, authorities, quantity obtained. Thirdly, discuss regulations of how to perfect legal effect concerning unlawfully obtaining own shares, disciplinary consequences and managing executives' civil liability for compensation. Focusing on discussing the legal effect of unlawfully obtaining own shares behavior and how to perfect managing executives' civil liability for compensation.