Study On Share Repurchase System Of Limited Liability Company

In 2005,the corporate law of our country was revised.It was first stipulated in article 75.It is the first stipulation of shareholder who opposing the resolution of the board of shareholders ask the limited liability company to repurchase their shareholding.This stipulation is called “the repurchase rights”.Obviously,the right of this single item is not sufficient to protect the interests of minority shareholders in the company.That's because the three legal repurchase cases have less space to implement and the right to vote against the resolution of the general meeting of shareholders shall be solidified.What's more,the specific operation process is not complete as well.Not only that,the standard of repurchase prices is also unclear.These will constrain the scope of this article in judicial practice.The legal effect of protecting the legitimate rights and interests of minority shareholders cannot be effectively guaranteed.This paper will focus on the establishment of the share repurchase system in China limited liability company,through this way,the legitimate rights and interests of minority shareholders can be effectively guaranteed.And make the system of our corporate law become more comprehensive.This paper is divided into four parts:The first part mainly wrote the theoretical basis for establishing the share repurchase system in the limited liability company.This part mainly introduce the concept and the nature and type of stock right.The stock right in the right of share buyback claim in article 74 of the company law of our country belongs to the right of self-improvement,inherent right and minority shareholder right.The stock right in the equity repurchase system is a more generalized concept.This paper also analyze whether the share repurchase system can meet the requirement of the company's ability and the essential attributes of the company or not,and distinguished the difference between share repurchase and stock repurchase.And find out the legal basis for the construction of limited liability company share buyback system.Such as the firm contract theory,capital maintenance theory and the theory of balancing of interests in the company,these theories make the foundation of the system.The second part mainly describes the current situation and existing problems of the share repurchase system of China's limited liability companies.This section first describes the specific provisions on the share repurchase in article 74 of the company law of our country.And expound the essential difference between the objection shareholder's share repurchase request system and the share repurchase system of thelimited liability company,then this part analyzes the three legal repurchase situations stipulated in article 74 of the company and analyzes the reasons and the reality of the three cases as shareholders exercising the right of claim.Then we introduce the specific judicial case,analysis of the current situation and points out the existing problems in the application of article 74(In 2013,it was revised in article 74)of the company law.These lay the foundation for complete the share repurchase system.The third part mainly introduces the legislative experience of the United States and Germany.Delaware general company law adopts the market exception principle.This principle defines the types of companies applicable to the right of assessment.The application of the right of assessment is also limited to the absorbed or newly incorporated company.And in the MBCA,the applicable situations of the appraisal right also includes the revision of the company's articles of association,the handling of the company's stock or shares,and the handling of the company's assets.In terms of repurchase price determination,the United States has mainly used the Delaware weighted average method,discounted cash flow method and capital cash flow method,each of which has its own characteristics.The Delaware weighted average method uses the market value of the stock,the value of the company's assets,and the profitability of the company as an evaluation factor of the fair price.Discounted cash flow is an assessment of the value of cash flow generated by the company for a period of time.The capital cash flow method is an algorithm which improvement based on discounted cash flow.The legislation of German is more technical than others,their logic is more rigorous.Germany has fully proved the foundation of the share repurchase system of the limited liability company is existent and sufficient.The main provisions are in articles 30,33,34 and 46 of the company law of limited liability.The fourth part introduces the completeness of the share repurchase system of China's limited liability company.This part is mainly about the three aspects,the first is the determination of reasonable prices,the second is the process of share repurchase,the third part is the disposal of the share of the purchased shares.We can use the buyback price calculation method used by shareholders in the current stage to determine the reasonable price,and we can also use the American DCF or CCF method to calculate the fair price of share repurchase.At the same time,it should also increase the company's written notice to shareholders in the resolution of shareholders' general meeting,and express the company's objection to the resolution of the general meeting of shareholders as a procedural stipulation in the sharerepurchase system.Last one,the shares should also be dealt with in a timely manner,such as cancellation or transfer.