Dissentient Shareholder Buyback Rights System Study

The repurchase right for dissent shareholders refers to such a right owned by the shareholders, who dissent from certain fundamental changes of the corporation, to present their dissentient and withdraw from the corporation by asking for the corporation to buyback their shares on fair prices. It originated from the United States and was extended as a typical system design in modern corporation law to protect minority shareholders under the principle of capital majority decision. The system of appraisal right of dissenters was first established in"Corporation Law"revised in 2005 in our country.The dissertation analyses the system of appraisal right of dissenters. Based on the background review, substantial application and procedural application, the dissertation discusses and analyses the relevant provisions in our corporation law faced by legal application.The body of the dissertation includes four parts:The first part is a background review of appraisal right of dissenters. Using traditional normative analyzing mode, this part analyses the origin of appraisal right of dissenters. The dissertation suggests that the appraisal right of dissenters is the result of the development of corporation voting mechanism. The intention of the system is protecting the benefit of minority shareholders, which is the essential requirement to control the fiduciary duty of shareholders, and representing the democratic character of corporation. Among various remedy for the benefit of minority shareholders, the appraisal right of dissenters have particular advantages which can't be substituted.The second part is about the substantial application of the system. The dissertation enumerates and compares the relevant provisions of substantial application in different important countries (areas), and adequately analyses the issues of substantial application. Based on comparative analyses, the author gives the follow viewpoints. During the process of modern corporation management, the applicable category of corporation to the system of appraisal right of dissenters should be extended, not only including limited liability corporation, but also including public limited corporation. The responsible entities to repurchase stocks are controlling shareholders. The system will force them to exert their voting power with more responsible and prudential attitude. The appraisal right should be endowed to non-voting power shareholders and imperfect shareholders. The applicable matters of appraisal right of dissenters should be broadened. The rule for confirming fair price should be developed based on the situation of our country.The third part is about the procedural application of the system. As the origin of the system, the corporation law in the United States had the most detailed and well-rounded rule about the design in exerting the appraisal right of dissenters. Based on"Revised Model Business Corporation Act"in the United States, Delaware Corporation Act, and the advices from American Bar Association, this part reviews and analyses the procedural application of the system. On the basis of affirming general process, the author suggest that, during the process of voting on dissenting matter, the voting power should be endowed to those dissenters who dissent hastily from certain fundamental changes. Through actively exerting voting power, it will give them chance to remedy their improper decision after deep consideration.Finally, the dissertation analyses and evaluates the"Corporation Law"revised in 2005 of our country. Focused on the legal application, referenced with the experience of different countries (areas), this part analyses and discusses in detail the substantial application and procedural application of the system in China, and boldly gives suggestion about improving the system of appraisal right of dissenters in our country, including the applicable scope of shareholders, the entity of repurchasing shares, the legal matters of repurchasing, the applicable process and the condition of void.