Share Repurchase Legal System

Stock Repurchase means limited company repurchases its stock which has distributed. It is one of ways that the company gets its stock. There are two legal systems of stock repurchase :one is "permission in priciple with the exception of prohibition, such as America; the other is "prohibition in principle with the exception of permission, "eg. Germany, France, England, Europe Union. Japan and our Twain. This thesis states on stock repurchase from analyzing in legal theory, comparing study on foreign countries' and frields' legislations,then criticizing our legislationand givingsome concrect suggestions.There are thirty thousand words in this thesis. With the exception of introduction and conclusion, it includes three parts.Part One: analyzing in legal theory. on stock repurchase.Many countries prohibite stock repurchase in principle .Becase if company buys its stock issued, it becomes the stockholder of itself. This violates legal logic. And also stock repurchase will produce many defects easily. It will disobey capital preserving principle, share holders equal principle, fair transaction, arranging share rights fairly, and will damage creditor'benifit. But stock repurchase is necessary and has positive functions includes reducing capital; merging;adjusting capital structure and keeping credit of company;implementing stock option;protecting a few disagreeing shareholders'rights; realizing obligatory right and defending unkinding mergement. So many countries relax restrictions now.Part Two: comparing legislation of stock repurchaseMany countries has complete legislation of stock repurchase .It can be concluded sevem aspects :limits, number, resourse, process, preserving and managing,information prevealing ,defending the illegality and evading. America has no limits in contrary to the others. Mary countries provide 10% in number in stock repurchase except America and England.Nearly all except our Twain stipulate surplus as resource in stock repurchase. America and our Twain give rights of stock repurchase to board of directors, and the others give it to board of shareholders. The purchase process should keep stockholders equal principle. Ifthe repurchase stock has shareholders' right, it's an important problem .Our Twain thinks that the information should preveal before repurchasing At last all countries and fields provide civil and criminal obligations. And America also has "safehabor".Part Three: criticizing and perfecting our legislationOur country has no stock repurchase system. The statute narrows the limits of permissing stock repurchase strictly. Stock repurchase is permissed only reducing capital and emerging. Along with the developing of economy, our statutes on stock repurchase cannot accord with demands. Using the experience of other countries and fields for reference ,the author gives suggestions on our legislation of stock repurchase :permission properly; keeping the number of stock repurchase in 10 %;surplus as resource; the board of shareholders keep rights in stock repurchase; obeying shareholders equal priciple; the stock keeping has right of buying new stock in stock option etc; the repurchase stock cannot be preserving too long; the creditors have strong obligation in prevealing information; and there are civil and criminal obligation for illegality;at last,evading is invalid.