On The Right Of Repurchase Of Shareholders In Limited Liability Company

The so-called “appraisal right of dissenters” is also known as “dissent appraisal right of minority shareholders” or “minority shareholders’ right to ask the company to buy back”, which means that under the particular circumstances, the shareholders who dissent with shareholder resolutions would enjoy rights of fair and reasonable price of shares to be repurchased by the company. The appraisal right of dissenters is inherent right, common right, individual shareholder right and right of formation, which is owned when the shareholders have the legal situation. Appraisal right system originated in the United States, and was adopted by many countries. Our current “Company Law” established the system. The regime is based on expectant right theory, equitable right theory and benefit theory. The appraisal right system in civil law countries and Anglo-American law countries have their own advantages, and our company law might refer accordingly considering the reality of our country. Our current “Company Law” Article 74 established the appraisal right of dissenters of the limited liability companies and made it made it clear. However, there are some problems between the appraisal right as a transplant from the “alien regime” and China’s legal environment due to China’s more stringent statutory capital system tradition of “Company Law”. Therefore, in judicial practice the legislation does not fully achieve the desired purpose. Under the provisions of Article 74 of China’s current “Company Law”, there are some shortcomings such as vague subject of right, stringent and narrow right functioning, different understanding of related concepts, poor operability of procedures, unclear standard to ensure fairness of share price, and lack of effective protection of creditors and so forth. Therefore, the papers propose to the subject of right should distinguish non-voting shareholders, successor shareholders, invest flawed shareholders, dormant shareholders, shareholders who are false and so forth. And we should determine whether shareholders enjoy the appraisal right, broaden shareholder rights scope and express explicitly related repurchase requests to avoid ambiguity. Also, we should improve the operating procedures in order to operate well, in the meantime to ensure fairness of the system and improve and strengthen the protection for creditors.