On The Appraisal Rights By Dissenter Shareholder

The system of derivative lawsuits, appraisal rights and cumulative voting, which are adopted by the new company law, constitute fundaments of the protection of minority shareholders. Appraisal rights projects much in these three arrangements. Article 75 and 143 provide for appraisal rights concerning respectively limited liability corporations and stock Corporation, Ltd. When a corporation does not prosecute a cause of action itself, corporate shareholders may assert a claim on the entity's behalf. These claims, usually initiated against a director, officer, or third party, are termed "derivative lawsuits". However, for lack of terms on operating this system, judges can hardly be given on the same scale in practice. So Supreme People's Court ranked it as an important research project, and let Guangdong High People's Court work at it in 2005. Nevertheless, it failed to get a judicial interpretation or a summary. So it's necessary to make a further study on the practical requirements, theoretical foundation and aspects need perfection of this system.This article consists of following parts:Preface gives a brief introduction on the adaptation and historic background of the system of derivative lawsuits. This system was embodied as a result of benefit conflict aroused by the separation of ownership and right of management. The new Company Law comes into force on January 1st 2006, but judges can hardly be given on the same scale in practice. To perfect the terms on operating the system of derivative lawsuits, so as to make it more practical, is the direct cause for author to study on this project.The first part deals with the objection of the rights of shareholder appraisal rights properties, the system in the system determine and development process. the article from the system theory of historical reasons and based on two aspects of the system to adjust the size of the conflict of interest, to the interests of the company balanced and implementation of internal dscourses the benefit conflicts between controlling shareholdersandminorityones,aswellashowtoprotectthelegaladvantagesofminorityshareholdersbykeepingthecompanyrunningnormally.Thoughauthorelaboratesthefeasibilityofderivativelawsuits,itisimpossibletooperateforlackofdetailedtermsonthissystem.Thesecondpartofcorporategovernancemodefromtheanglebroughtupinourcountryfromtheshareholderappraisalrightssystemofnecessity,andanalysisourcompanylawoftherelevantregulationsandprovisionsofthedefectspointedout.Theobjectionoftheshareholderappraisalrightssystemtobalancetheinterestsofconflict,thesmallshareholders'relief,butbecauseofthelawofthegeneral,inpracticeitunified.Thethirdpartgivesageneraloverviewontheoperationofthissystemofderivativelawsuitsinforeigncountries,suchasKorea,Japan,theUnitedStates,andTaiwanDistrictbyintroducingtheapplicationofcorporationsandshareholders,procedures,determineofrepurchaseprice,etc,fromourcompanypolicytodevelophistoricalprocessandcharacteristicsofthisobjectionshareholdersappraisalrightssysteminourcompanysystemintheinevitabilityandthesystembyourcompanylawexplicitlystipulatesthat,buttherearestilloperateontheflaw.fromseveralaspectstoanalyzetheexistinglawthesystemofabuses.Thefifthpartputsfocusonthedifficultiesthatappearinjudicialpracticeofthissysteminourcountry,existingintheapplication,proceduresofthesystemanddeterminationofrepurchaseprice.Thenauthorputsforwardthesuggestionsofsolutionsfromthesethreeaspects.Theepilogueputsforwardthattheprovisionofderivativelawsuitsshouldbeinlinewiththeeconomicgrowth.Asthissystemisembodiedbylaw,thedegreeofapplicationofitshallbeunified.Authorwishedthesystemofderivativelawsuitstobeimprovedbydrawinglessonsfromforeigncountries.