Study On Legal Issues Of Price Assessment In Appraisal Rights

With the development of market economy, companies perfect business models andadjust business strategies to adapt to economic development. The appraisal rightsoriginated from the USA, then many countries set appraisal rights to protect minorityshareholders’ interest which is against the major changes to the company under capitalmajority rule. In order to respect majority shareholder’s decision and to give minorityshareholders right to withdraw from the company as well as recouping investmentunder fair and reasonable condition, Article75、143of Corporation Law stipulateappraisal rights. However, there are shortcomings of appraisal rights, the assessmentstandard of repurchase price and judicial evaluation procedures are unclear whichcannot realize the purpose and function during implementation and operation.Appraisal and confirmation of stock repurchase price is the core of appraisal rightsand the key of fair exit system for minority shareholders. Among these, judicialevaluation is the major part of appraisal rights and final protection for appraisal rightswhich can be used by minority shareholders. The title of this paper is Study on legalissues of price assessment in appraisal rights. It makes comparative study onlegislation and case law of appraisal rights in foreign countries based on presentsituation and shortage of legislation in China to assure the appraisal principles,standards and procedures for protecting minority shareholders’ rights. There are fourparts in this paper. Chapter1summarizes legal issues of price assessment in appraisal rights andclarifies the definition as well as nature of the repurchase price. Also, it discusses thelegal value of appraisal rights and the necessity to assure appraisal rights.Chapter2analyses the legislative purposes and principles of price assessment. Thefinal purpose of appraisal rights is to protect minority shareholders’ rights. The basiclegal principle of price assessment should guide the price appraisal and confirm to thelegislative purposes.Chapter3proposes the assessment standard. It explains the reasonable price andclarifies the importance of the definition. Then, it draws from foreign legislativepractice of reasonable price to propose legislative suggestion under four perspectivesabout appraisal standards of repurchase price in our country.Chapter4disserts the judicial appraisal of repurchase price. The judicial appraisalis significant to the appraisal rights and needs to be discussed independently. Itcompares foreign legislation and case laws, sorts substantive law as well as procedurallaw and proposes legislative suggestions to perfect judicial appraisal procedures inChina.