On The Corporate Deadlock And Its Legal Strategy

From the perspective of market-oriented economy, corporations are overwhelming in the modem society, and they play an important role in the market-oriented economy as the progress of our nation's construction of market-oriented economy speeding up. It's obvious that some kinds of closely held corporations, such as limited liability corporations ,meet the requirement of the market-oriented economy and the development demands of some middle-scale or small-scale companies. However ,because of the closed traits ,and the related legal and capital system, the decision-making model of corporations, and the way to protect the right of minority shareholders, closely held corporations emerge many disadvantages in the course of operation .The corporate deadlock is a typical problem among the disadvantages.In practice, the corporate deadlock is not rare, but because lack of the related legislation and the conservative judicial attitude, many courts have no idea how to redress the shareholders in the corporations which trapped into deadlock. In order to solve this problem, the Corporation Law which was put in force on January the 1st in 2006 paid attention to corporate deadlock and provided some new articles about the judicial dissolution of a corporation in deadlock and the withdrawal mechanism of the shareholders in such circumstances. However, that is not enough to deal with all the trouble arising out of the deadlock. This paper, basing on the analyzing the reason why deadlock emerges and the fundamental theories of judicial redress, is aiming at establishing plural system to redress the interest-related parties in the deadlock so as to perfect the related provisions in the Corporation Law in our country.This paper discusses this problem from four parts:Part I: A general introduction of the corporate deadlock. In this part, some basic legal issues of corporate deadlock, such as the definition of the corporate deadlock and its characteristics, as well as its classification according to different standards, are discussed.Part II: The causes lead to corporate deadlock and the harm of corporate deadlock. The emergence of the deadlock has its substantial and systematic origins.