Research On Judicially Remedial Mechanisms For Corporate Deadlock

Corporation Deadlock is one of the problems faced by the closely held Corporation. When formed and sustained, it will pose damages on the corporate shareholders as well as the overall interests of society.In this paper the writer try to put forward an envision of comparatively perfect mechanisms for closely held corporation deadlock which are suitable to Chinese actual situation,focusing on closely held corporation deadlock and the judicially remedial mechanisms for it and adopting the legislative and judicial experiences of primary countries of the Common Law System and Civil Law System. This paper consists of five chapters besides the introduction and the conclusion.Chapter One:The basic Issues of Corporate Deadlock. At first, the chapter analyses how corporate deadlock is formed. It is the substantial and systematic origins of closely held corporation such as the closed traits, the limit of the Capital Principles, the embarrassment of the decision-making model and so on that result in many particular problems of closely-held corporation. And the deadlock is a typical problem of all. Then the writer reveals the characteristics and classifications of the deadlock and finally points out its harm arising from the deadlock to the corporations, the shareholders and the whole society.Chapter two:The Basic Theories on Judicially Remedial Mechanisms for Corporate Deadlock. This chapter introduces the basic theories on solving mechanisms for corporate deadlock from the predominant states belonging to Common Law System and Civil Law System, which are classified as the theory of reasonable forseeability of minority shareholders, the contract theory of corporation, the trust obligation between the shareholders and the theory of corporate social responsibility. These theories widened the thinking scopes of Chinese scholars concerning the deadlock. China, therefore, can profit from them and practise in dealing the corporation deadlock.Chapter Three:Comparative Analyses of Judicially Remedial Mechanisms for Corporate Deadlock of the Primary Countries of the Two Legal Systems. This chapter takes US,UK,Germany and Japan as examples. It analyses the attitude towards the judicial intervention in the corporate deadlock, the issues of shareholders’asking the court to dissolve the corporation,the impass alternative relief and the onus of proof requirements. Finally it interprets China’s actual problems of the judicially remedial mechanisms for the corporate deadlock from the perspectives of entity law and procedural law. It analyses Article183of COrporarate Law and Judicial Interpretation2of Corporation Law.It points out that China needs as much as relief of corporate deadlock besides the Article183and Judicial Interpretation2, moreover,the provisions of them are too principled to be applied.Although the Judicial Interpretation2makes clear the judgemental criteria of the deadlock and the liquidation procedures, there are still many details to be perfected.Chapter Four: The Envision of How to Perfectly Construct China’s Judicially Remedial Mechanisms for the Corporate Deadlock. In this chapter the writer proposes his own envision of how to construct China’s judidical solving mechanisms for the corporate deadlock on the basis of China’s actual situations and the legal and judicial experiences of foreign countries. In the point of legislation, China should make the current system of judicial dissolution perfect, apply the system of forced buyout right, establish the system of compulsory corporate separation and introduce US provisional directors. In the point of procedures, China should establish a series of systems, such as how to determine the litigants, limit the requirements of prosecution and allocate the burden of proof. At the same time,the writer points out that the shareholders should intensify their own awareness of consultation according to the principle of private law autonomy(the principle of voluntariness in China),and make their efforts to hold up the emergency of the deadlock.