On Cash-option System Of China

As a system innovation of the domestic limited company merger and acquisition market, Cash-option system related cases have emerged 23 times since it was applied during the process of the First General Merchandise merging the Hualian Merchandise Tower in form of absorption. Generally speaking, the system Cash-option does performed positively while protecting the interests of minority shareholders from being infringed. However, it works approximately spontaneously practically, brings about distinguished understandings of its'character, function and value among the theoretical circles and practical circles, accompanying with much disputes since few regulations can be found in current China. Despite the problem revealed above, their still exists plenty of problems with the specific system as well, thus results in the system of reliving the interests of minority shareholders consequently being weakened, nevertheless, practices which violates the origin intention of establishing Cash-option system occurred beyond our prediction.It can be concluded from theoretical analyzing, Cash-option is a special right of shareholder exiting, not only can the system mainly work under the circumstances of preserving the minority shareholders during the process of merging and acquisition, it also functions positively via the improvement of definite system devising to enhance the corporation acquisition and increase investment opportunities for the securities market. Aiming at the specific problems of the current Cash-option system practice, steps can be taken from the following three sectors to rationalize and systematic Cash-option system, like crystallizing its sphere and premise of application, standardizing the procedure and establishing negotiated price system. As to legislation, it would be wisdom for us to rule the system of Cash-option in specialty, as well as crystallizing its special situation and procedure, thus distinguishing from the current corporation law which rules the system of Objection Shareholder Rights. Allowing the two to go hand in hand, and operates respectively, thus play a positive role in protecting the interest of minority shareholders together.