Research On The Mechanism Of Shareholder's Withdrawal Of The Limited Liability Company

Limited Liability Company is widely used around the world because of the little legal control, the flexibility of the organizational structure, the limited shareholders and so on. Most of our country's small and medium-sized enterprises also choose the form of the limited liability company. But because of the characteristic of its closeness, when the shareholder's right of the expectation fails to be carried out and the shareholder is treated unfairly, the shareholder can not withdraw from the limited liability company through transferring shares, and their investment in the company is easily locked. Many countries have stipulated the mechanism of the shareholders withdrawing from the limited liability company. The mechanism of shareholder's withdrawing can realize the fairness and justice between shareholders, give shareholders more fully protection, eliminate their worries and stimulate their investment enthusiasm. The Company Law of the People's Republic of China amended in 2005 stipulates the mechanism of shareholder's withdrawal of the limited liability company. But there are some questions that the system has little operatibility and shareholders in some other situations can not be rescued.On the basis of the results of previous research and the experience of foreign advanced system, this article puts forward some suggestions for improving the mechanism of shareholder's withdrawal of the limited liability company. Because the application of the repurchase rights for dissent shareholders is limited and the cost of the judicial dissolution is high, we need to set up new system to give the shareholders more sufficient remedy and at the same time to avoid dissolving the company. This paper agrees the proposal to set up 'the right to request to buy shares', to provide remedy for the shareholders who can not withdraw from the company through the present system. Moreover, for these systems can actually play a part in practice, there are some proposal for improving the system of the right of repurchase for dissent shareholders and judicial dissolution.This article contains four parts besides the introduction and conclusion, about 34000 characters.Part one: The basic theory of mechanism of shareholder's withdrawal of the limited liability company. At first, this part introduces the necessity of these systems. The role of the system is providing harmonious atmosphere for the company. The harmonious atmosphere between the shareholders is the basis of the limited liability company. If the atmosphere is destroyed, the company can not run well. It can provide remedy for the characteristic of the closeness of the limited liability company. It can reduce the negative effects of the shareholders participating in management. It can overcome the harm of abusing the Capital Majority Rule. Then it introduces the Legal Principle Basis of these systems, namely the theory of expecting right failing and benefit balance. Finally, analyze the reason of the agreed withdrawal and statutory withdrawal simply.Part two: The analysis and compare of the corresponding systems in abroad. This article chooses the system of the United States, England, Germany and Japan as object. The mechanism of withdrawal of the United States includes methods of agreed withdrawal, appraisal right, judicial dissolution and its substitute measures. The mechanisms of withdrawal of Germany are methods of agreed withdrawal, withdrawal right, expulsion right and judicial dissolution. We can find that the basis of remedy for shareholders in the United States is fiduciary duties and protecting benefits of small stockholders and in Germany is the basic relationship between shareholders. We should adopt the Germany's basis of remedy, because this takes the shareholders' own reason into account and provides more adequate remedies for shareholders.Part three: The analysis of the exiting system in our country. First of all, it introduces the mechanism of shareholder's withdrawal of the limited liability company, and admits the positive effect of it. Then it analyses the insufficiency of the existing system, that mainly contains four factors: first, the basis of the existing system is undefined; Second, the application of right of the repurchase for dissent shareholders is not reasonable, the procedural requirements are unclear or incomplete; Third, the application of the judicial dissolution is ambiguous and the way of remedy is unitary; Fourth, remedy can not be achieved in many situations.Part four: The suggestions of improving the mechanism of shareholder's withdrawal of the limited liability company in our country. Concerning the methods of agreed withdrawal, this paper suggests that we may stipulate the provisions through the model of the articles of association to make it play a greater role. The statutory withdrawal manner includes repurchase rights for dissent shareholders, the right to request to buy shares and the judicial dissolution. This paper suggests that repurchase rights for dissent shareholders are applicable to the big change of the company which make the shareholders' expectation fail. The right to request to buy shares is applicable to the shareholders' own reasons which need to exit from the company and that the shareholders are unfairly treated .The judicial dissolution is applicable where the company can not remain in business situations. Moreover, this paper provides some suggestions on the procedure of them.