The Research On Listed Companies Share Repurchase Issues

Takeover on listed corporate repurchase of its shares, as a special form of stock transfer, refers to the legal activity of a company (a listed company) to purchase outstanding shares at a specified price and in a particular way. It has become a common form of capital operation and corporate financing.Takeover on listed corporate repurchase of its shares has now become common in mature capital markets as a means of corporate functiong and financing mode of operation.This writing implements the method of comparative law, empirical analysis, value analysis and so on, discusses the principles of the system of takeover on listed corporate repurchase of its shares; summarizes the history and trend of the system of takeover on listed corporate repurchase of its shares in the countries of civil law and common law; compares the successful experience of the system of takeover on listed corporate repurchase of its shares in the countries of civil law and common law, analyzes the hitory and differences of the system of takeover on listed corporate repurchase of its shares in China.This paper is a more systematic and comprehensive study of the important legal issues concerned anti-takeover of listed companies and makes its best to bring a full understanding and thus would play a beneficial role in takeover on listed corporate repurchase of its shares, and pays sufficient attention to potential problems because of the implementation of the system of takeover on listed corporate repurchase of its shares, and makes its best to assume some lawful and reasonable, but workable system to reduce the probability of these problems, reducing the disadvantages brought by it, in order to realize the true market values of repurchase shares of listed companies, and offers the author's advice and comments concerned the legislative processing and practical problems in China.This paper analyzes the legal basis of the repurchase of shares of listed companies and analyzes the characteristics , basic model and type of the repurchase of shares of listed companies ,the key point is the motivation hypothesis of listed companies to repurchase shares ,explains the positive value of repurchase shares of listed companies, including substitute dividend distribution, returning capital to shareholders; adjusting the company's share price, stabilizing securities markets; to meet the needs of securities and to facilitate the equity conversion; to promote stock ownership of employees, maintaining control of the company. This article also includes the analysis of the problem inherent in share repurchases, including crimes against the integrity of corporate assets, in particular, the existence of the risk of depriving the creditors of the company; harming the interests of shareholders, including the violation of the principle of equality of shareholders and being abused by the Board to seek personal gains; harming the normal exercise of control over the company and impartiality of securities market transactions.This article focuses on analysis of the relationship between share repurchases, the company's independent personality and capital maintenance, pointing out the possibility and reality of harmony and coexistence.There are two kinds of major legislative mode concerning the legal system of share repurchase in the world, namely: : It's permitted in principal and forbidden in some exceptions; And it's forbidden in principle and permitted in some exceptions. Takeover on listed corporations has been seen a lot in the capital market of China in recent years, and several relevant anti-takeover events had attracted much attention from various groups. But there are many problems in the practice of antitakeover. The regulations on antitakeover is nearly blank, and the academic research makes, at least for recent years, little contribution to it, which results in much puzzlement for the relevant parties, specially for share-holders, thus doing harm to the order of capital market. Corporate repurchase of its shares is a new thing in China at present for the reason of underdevelopment of our stock market, comparing with developed countries. Stipulations in many regulations constituted an embryonic legislation on repurchase but are far away from a full system and cannot follow economic development of China.Under the circumstances, in 2004 legislative body of China issued Corporate Law Modification Draft (for comments), which have made significant modification to Corporate Law, allowing companies to repurchase shares of its own, less than 5% of the total shares, for the purpose of rewarding employees. This movement has been viewed as a historic breakthrough and bears important and profound significance to the operation and development of national economy of China.The safeguards system for takeover on listed corporate repurchase of its shares, is established in order to implement financial flexibility of the company, respect the corporate autonomy, and liberalize the takeover businesses on listed corporate repurchase of its shares has become a legislative trend all over the world, after all, there is certain risk in takeover on listed corporate repurchase of its shares, thus it should be faced pragmatically, and we should draw out and sum up effective ways as many as possible, and design a supporting legal system made of them according to the actual situation, so that they can solve the problems and become part of the entire share repurchase system in order to prevent, detect and solve the problem.After precautious analysis and comparision of share repurchase system overseas, we can see clearly that the safeguards system for takeover on listed corporate repurchase of its shares, includes mainly security mechanisms for purchasing the stock, the pre-protection mechanism of procedures and financial resources.This article contains the comprehensive analysis of the practical significance , the defects and deficiencies of China's current system of takeover on listed corporate repurchase of its shares, the expansion and contraction of listed company's share capital is operational strategies of the capital for the company in different stages of development and external environment, the share repurchase is objectively necessary for the listed company, share repurchase is a common mode of operation and financial management of capital approach in a securities market and would be permissible under certain conditions, and will result in the effective reduction of assets and the weakening of the corporate ability to pay for its debt regardless of what form of repurchase is taken, and would have a great impact on the interests of creditors. Strengthening the protection of creditors should be necessary part of formalizing share repurchase behavior.However, the legal system of China concerning share repurchase is far behind. It's very necessary for the legislative body to make clear many issues in the system, such as applicable scope, time limit, resources of the capital for repurchase and so on. With the continued development of the economy and legislation in China, it's firmly believed that the legal system concerning corporate repurchase of its own shares will be mature in coming future. Because of my limit knowledge,inevitably ,some analysis are not proper please your more criticize.