The Legal Remedy For Corporate Deadlock That Caused By Mergers AND Acquisitions

Corporate deadlock means that the company cannot function properly and falls into paralyzing situation. It happens among the company’s daily business activities, caused by the conflicts between shareholder and shareholder, shareholder and director, or between the director and the director, which result the failure of decision-making bodies which including the shareholders’ meeting and the board of directors that unable to make an effective resolution. The causes of corporate deadlock is relatively complex, each deadlock is also not identical, but it can cause the same harm results, so it can be regulated by general provisions, but this is not equivalent to that general provisions apply to all of the deadlock situation. At present, the corporate deadlock provisions of The Company Law of the Peoples Republic of China belongs to this general rule, which the74th article is the share repurchase of dissenting shareholder, the142rd article is the right of claim for the dissenting shareholder to repurchase the share, the182rd article is the judicature forced dissolution of the deadlock company. It described the law that may be applicable for deadlock by the relevant provisions of the principle, For example, giving shareholders voting rights in the shareholders’ meeting and resolution rights to choose the mode and voting procedures for shareholders’ meeting by the articles of the company, formulating the produce method of directors, supervisors and senior management personnel, formulating the operation method for the board of directors, giving a certain degree of certainty to the total guiding ideology for the company autonomy.This article is based on company law of the People’s Republic of China, which tries to remedy the defects of Chinese company law in building and prolonging rules. In chapter one, this article arranges the reasons of company deadlock and distinguishes the different reasons in general company deadlock and company deadlock in corporate merger and acquisition as well as puts the point that company deadlock in corporate merger and acquisition is becoming the main trend in company deadlock. In chapter two, this article specifically researches the company deadlock in corporate merger and acquisition. The harms of the company deadlock in corporate merger and acquisition get exposure by distinguishing the reasons of company deadlock in corporate merger and acquisition from the results of it. In chapter three, some specific proposals are brought out, which bases on analyzing the defects on recent company law system. It is concluded that company deadlock is neglected in judicial by contrasting Chinese company law. For example, involuntary dissolution is a main passive judicial relief in company deadlock. This article puts forward to some proposals including prevention with conventions in the beginning and administrating in the middle as well as judicial relief in the end to remedy recent matters in company deadlock while recent Chinese company law cannot satisfy with market’s need because of its abstractness.The corporate law of Britain and America and other countries, although most of the general provisions of corporate deadlock is explained, but because of the existence of case law tradition accordingly, the judge in the practical problems facing the corporate deadlock, through the existing legal and historical precedents for reasonable, in line with the current actual situation judgment. And this, it is the lack of our corporate law and corporate law practice in the process of. After all, corporate deadlock is often accompanied with many complex situations, and the general provisions in the face of these circumstances, and the lack of truly means to solve this problem, if only to the dissolution of the corporate as the corporate deadlock, so for those who hope to profit the shareholders and the relevant personnel, is undoubtedly a great loss. So, if it can been made up the system of the blind spot through the corresponding measures, establishment of remedy channel between a law and practice, thus forming a buffer zone of theory and practice, for the parties, should be willing to see. In this paper, for this purpose, focus on the corporate and the corporate deadlock caused by the corporate deadlock form, and that the board of directors deadlock is a major cause of the impasse, the provisions of the corporate law board members, further discussion of corporate law reasonableness of judicial mandatory dissolution, and based on this analysis. Based on the relevant provisions of the corporate law with the United Kingdom on the corporate deadlock and processing methods, the articles of association can play the role of the corporate deadlock, and further on the application form of questioning, trying to promote the constitution restructuring, so that it can become a universal real effective autonomy regulations. In dealing with the specific equity mergers and acquisitions the corporate deadlock, through a combination of articles can be applicable to start building contains the agreement on gambling, the emergency relief system of corporate deadlock. In the hope that through to the corporate including shareholders, directors and the creditors of the various stakeholders thirst for profit as incentives, to resolve the conflict situation against each other, activate the corporate deadlock, the corporate mergers and acquisitions lead to corporate deadlock can get full relief and solve.