Research On The Legal Issues Of The Pricing Of Share Repurchase Of Dissenting Shareholders In Limited Liability Companies

With the continuous development of China’s economy,limited companies need to constantly adjust their business decisions and corporate strategies to achieve profitability.However,in the process of adjusting the company’s operating decisions,the shareholders may have divergences in the process of operating decisions due to their different acceptances of the company’s risks.In addition,due to the existence of "capital majority" mechanism,small and medium-sized shareholders usually belong to the vulnerable group in the process of business decision-making and management of the company,and their appeals are difficult to be directly adopted.In response to the above-mentioned problems,our country has set up the objection system of shareholders’ share repurchase request right.The starting point of this system is to protect minority shareholders.However,due to the lack of a repurchase pricing mechanism,the rights and interests of minority shareholders cannot be effectively protected.It mainly includes two major problems in entity and procedure: at the entity level,first,the definition of reasonable price in the law itself has not been refined.Secondly,as for the two main bodies of the legal relationship of equity repurchase entities,for limited companies,especially start-up and growth companies,there may be unclear asset ownership,resulting in the uncertainty of equity repurchase price;For minority shareholders,there may be disputes over the cost allocation caused by repurchase pricing due to the weak economic ability of minority shareholders.At the procedural level,according to the distribution of the burden of proof in the civil procedure law,dissenting shareholders bear a heavier burden of proof for the proof of equity repurchase value;And there is a lack of procedural relief for objections to the evaluation and pricing of appraisal institutions.These legal issues will lead to the interests of minority shareholders can not be better protected.The overseas legal system for the pricing of equity repurchase of limited companies is relatively perfect.Taking the United States and Japan as examples,they have more detailed provisions on the "reasonable price" of equity repurchase,the confirmation of repurchase time point,cost sharing and so on.However,the two countries adopt very different approaches on some issues.For example,the United States uses the value calculation at the moment before the realization of the proposed transaction for a reasonable price,but Japan needs to consider the impact of corporate decisions on enterprises to calculate the value of equity repurchase.These legal problems in pricing standardization will lead to different protection for minority shareholders.Therefore,according to the actual situation in China,we can absorb and learn from relevant foreign practices,take the pricing mechanism as a means,and from the perspective of entity and procedure,through the reasonable price of equity repurchase of limited liability companies,the time point of equity repurchase price,the principle of sharing the cost of equity repurchase,the burden of proof borne by minority shareholders and the relief of objection to repurchase price,Put forward corresponding suggestions,and finally better safeguard the interests of minority shareholders.