On The Conditions For The Exercise Of The Appraisal Right Of Dissent Shareholders

In corporation practice, the major shareholders often invade the rights and interest of minor shareholders. In order to correct the shortcomings of the "Majority Rules" and protect the rights and interest of minor shareholders, the appraisal right (hereinafter referred to as "This Right") of dissent shareholders was invented. However, This Right, in our Corporation Law, is not fully explained and there are many difficulties in exercising it. And there exists the need to perfect its explanations so as to sharpen it for a better application in reality. This is the purpose for which this article is written. The methods of comparative study and case study are used in this article for detailed analyses on This Right.Firstly, I introduce the meaning, history, theoretical basis, value and defects of This Right. I begin with the analyses on the concept of the minor shareholders and the rights of the minor shareholders and make clear the key points of the concept and the characteristics of This Right with the references to those related academic views. Then I deal with the history of the right for a better understanding of its purposes and carry on to introduce its theoretical basis and analyze its significance; at the end of this part, I make analyses in depth on the value and defects of the rule and make my way into the conclusion that it is necessary to set up This Right and restrict it.Secondly, I carry out detailed investigations upon the legislative cases on the body conditions, situations, procedures, the repurchase prices and restriction conditions in other regions and countries. In this part, I start with analyzing the exercise scope of This Right and what kinds of companies and shareholders are within the scope and especially discuss the matter of whether some special shareholders shall be allowed to exercise the right or not. Then I introduce the legislative cases of the exercise situations, principles and standards and several widely-accepted situations and further analyze the design ideas for the right’s exercise procedures, the non-litigation procedures and litigation procedures and in the end bring in the determination methods of repurchase price used in the United States, Japan and other countries, and the restrictions of Canada and other countries on the exercise of This Right.Thirdly, I analyze the present situations of the legislation practice for This Right in our country and This Right’s defects. I walk with first the analyses on the laws and regulations related to the bodies, conditions, situations, procedures and the repurchase prices confirmed by This Right; then with those on the defects of This Right in our country, such as unreasonable body conditions, situations and procedures, lack of the repurchase price and relevant restrictions etc..Lastly, I refer to the legislation practices in other regions and countries, and put forward the suggestions for the perfection of This Right:first, make clear the body conditions; second, perfect the situations where This Right is allowed to be exercised; third, perfect the procedures for the exercise of This Right; fourth, define more clearly the repurchase prices; fifth, add more necessary restrictions to the exercise of This Right.