The Research On Appraisal Rights Of Dissenting Shareholders

Dissenter's appraisal rights provide dissenting shareholders a means of cash out at a fair price when they disagree with fundamental changes to their companies approved by majority shareholders. They avoid the disadvantages of majority consent rule and protect minority shareholders from fraudulence and exploitation of majority shareholders. Such fundamental changes as M&A, separation, and sale of major assets usually only protect the interests of majority shareholders while the interests of minority shareholders are legally overlooked and injured. It is widely accepted to protect the interests of minority shareholders properly, and establishment of appraisal rights can meet this need. New Company Law has taken effect since January lst,2006, provisions 75 and 143 of which provide for appraisal rights for dissenting shareholders. The establishment of this system in China systematically safeguards the interests of minority shareholders, but it is far from satisfactory. In this essay, the author introduces the institutional value, scope of application, procedure of exercise of appraisal rights in certain countries and regions, analyses provisions 75 and 143 of Company Law and presents several suggestions.