On The Repurchase Reason Of The Listed Company In China

The share repurchase, which is a very popular operation in foreign stock markets, has neither been discussed deeply nor practiced actively in China. This thesis, which focuses on the reasons of share repurchase, basing on the concept definition of share repurchase and the reason of share repurchase, the position of share repurchase reason and the evolution of legislation, are trying to interpret and review the predicaments of the four repurchase reasons when legislating, practicing and studying. Besides, this thesis also puts forward valuable modification suggestions to repurchase reason.This thesis indicates the source of problem consciousness in the introduction of the paper: This thesis studies the legislation issues when solving one kind of these difficult cases.The first part is about some basic problems of the theme. Such as the concept of repurchase reason, the concept of share repurchase, the position of share repurchase reason and the evolution of legislation. The share repurchase of listed company, refers that the listed company, through the method of offer, publicly trade or agreement, takes cash or other property as consideration to repurchase its own issued shares, as part of the treasury stock or to cancel. The repurchase reason, playing the foundational status, is the starting point and the center of the share repurchase theme. The repurchase reason also directly decides the economic benefits of share repurchase, and indirect decides the financial resources, price, quantity, procedures and consequence of share repurchase. In 1992, there is only one reason of repurchase in China, while four ones in Company Law nowadays.The second part reflects the four repurchase reasons in The Company Law. The four repurchase reasons in The Company Law is: (1) To decrease the registered capital of the company; (2) To merge another company holding shares of this company; (3) To award the employees of this company with shares; or (4) It is requested by any shareholder to purchase his shares because this shareholder objects to the company's resolution on merger or split-up made by the assembly of shareholders. In legislation, the four repurchase reasons have played an important role in shareholder structure reform; in practice, the four repurchase reasons may not satisfy the practical needs; in theory, there is two categories regarding to the increase of the repurchase reasons.The third part discusses the possible choice of repurchase. Firstly, this thesis analyzes the characteristics of China's listed companies, as the background of discussion; and introduces the evolution of legislation in Japan and Taiwan as a possible choice. Secondly, this thesis studies the reason according to court verdicts, the reason for financial institution to obtain its own shares, and the reason based on the temporary license of CSRC, and discloses that The Company Law of China should take the mentioned four reasons into account. Thirdly, this thesis discusses other repurchase reasons, such as reason to regulate the stock price, to anti-takeover, and reasons under the resolution of general meeting of shareholders, and indicates that such reasons should not be added to The Company Law of China.The new Company Law doesn't mean the end but a new beginning. Especially in the capital market, how to establish on the special situation of the Chinese security market and to comply with the development of our country required the company practice will be the significant subject deserved study.