The Study Of Mandatory Exclusion Of Minority Shareholders

In order to cope with the fierce market competition, between enterprises and enterprise’s internal structure adjustments are often seen. The realization of the merger and enterprise’s internal management and structure adjustment are associated with the fully control, however, it is not easy to achieve this goal. Shareholder who has already in possession of more than 95% of the shares of the target company, has been in absolute control of the company, and the company as a rational “economic man”, can make any decision, in addition to the exclusion of minority shareholders. In order to improve the efficiency of the companys’ management, strategic integration, unified management, reduce management costs and the acquisition of minority shareholders, the company often fail to find minority shareholders or minority shareholders do not agree to sell its stakes,in this awkward predicament, at this time, major shareholders,to solve the problem of minority shareholders, have to renegotiate with minority shareholders, especially when minority shareholders realize the intention of the major shareholders to acquire all of the shares, even if the purchase price is reasonable, minority shareholders may also be rejected, the purpose is to threaten the major shareholders through their holdings of minority stakes, which will not only bring additional costs to the major shareholders, more important is seriously affect the efficiency of target corporation’s strategic integration and layout. Therefore, whether it is a limited liability company or a company limited by shares, whether listed or unlisted shares Co., Ltd., as long as there is a highly concentrated ownership of the state, there is inducement to set the system of major shareholders forced out the of minority shareholders. Of course, major shareholders should not achieve the ownership requirements only for compulsory eliminate minority shareholders.Through study abroad, the Squeeze out of minority shareholders System is major shareholders holding a majority stakes of the company,(over 90% or 95%) mandatory to purchase the remaining minority shareholders’ shares, the remaining minority shareholders mandatory excluded out of the company, avoiding minority shareholders due to personal reasons unable or unwilling to sell shares, bringing to the major shareholder of the complete control of the target company, so as to realize the total strategic integration difficulties.As a shareholder,investing economic organization, in order to maximize the interests of shareholders, the company must ensure efficient operation, without affecting the fairness under the premise of efficiency, the company is operating a tireless pursuit. The theoretical foundation of the Squeeze out of minority shareholders System is the shareholder’s right of non-permanent and deprivation, its rationality is to prevent the minority shareholders abuse of power and the pursuit of efficiency, but at the same time, we must ensure the pursuit of efficiency is a fair process. Therefore, the minority shareholders be forced to excluded must get a fair price compensation.The securities law provides that the minority shareholders have withdrawal right, the law in protecting minority shareholders at the same time should not ignore the interests of major shareholders, while giving the minority shareholders withdrawal right, at the same time, should also give the major shareholder of compulsory elimination right, the two rights are not in conflict, whether it is minority shareholders to exercise the right to opt out, or major shareholders exercise exclusive right, the result is the minority shareholders acquire fair price compensation to withdraw from the company. To establish the Squeeze out of minority shareholders System to solve the problem of minority shareholders, is a good balancing between 3protection for the interests of minority shareholders and major shareholders cost efficiency. This "charm" system is undoubtedly the strong power of major shareholders in droves.Aside from the preamble and epilogue,this essay is distributed into four chapters.The first chapter is the legal implications of the major shareholder squeeze out of minority shareholders. Mainly to define the system of major shareholder squeeze out of minority shareholders, the major shareholder of compulsory elimination of minority shareholders and minority shareholders to the major shareholder of the forced sale, analyzing the contact between compulsory elimination and active delisting.Finally, an analysis of the practical needs of minority shareholders forced removal system.The second chapter is the theoretical basis of the system of mandatory exclusion of minority shareholders. First of all, analysis of legitimacy of the mandatory elimination system; Secondly, analyze the minority shareholders of compulsory elimination system in accordance with company law, shareholder shall have the absolute right of withdrawal and in the legal sense, shareholders in any case should can withdraw from the company; shareholder’s right of existence does not have permanent and under certain conditions can be deprived of, the above conclusion also applies to the minority of compulsory elimination system; Finally, the minority shareholders of compulsory elimination system of constitutionality is analyzed.The third chapter is the value orientation of minority shareholder’s forced exclusion system. Fairness and efficiency is the basic value of law. Whether introduction of minority shareholders forced exclusion system or not is a value judgment of the choice problem, minority shareholders compulsory elimination system is contrary to the traditional company law, however, the minority shareholders compulsory elimination system reflects the company in the pursuit of efficiency and the attitude of respect for autonomy and property ownership conflict of law makers. Mergers and acquisitions can improve corporate management flexibility and optimize the allocation of resources has become a consensus, the minority shareholders of compulsory elimination system, if large shareholders can complete all and control the target company, it does not take account of the interests of minority shareholders, but from the entire enterprise set group interests of company management, or major shareholders may due to suspected capital most definitely abusing other reasons by minority shareholders filed a lawsuit, affect the company’s normal operation. The efficiency value and the fair value are the value which the system to pursue, the two also can obtain balance in the system concrete operation.The fourth chapter is the construction of the system of compulsory elimination of minority shareholders. First of all, analysis of the scope the system; Secondly, it expounds the minority shareholders forced removal system of prohibition; again, analyzed the starting up conditions of the system; Finally, analysis of the applicable rules of minority shareholders forced removal system, including trigger major shareholders of compulsory elimination of minority ownership boundary points, minority shareholders compensation price and minority shareholders relief measures, hope that it can provide useful reference for our country to establish the Squeeze out of minority shareholders System.