Dissentient Shareholder Buyback Rights System Study

In the corporation laws of modern countries and regions, the principle of "majority consent" is generally adopted in the decision-making of structural changes of a corporation. This principle embodies the concept of the democracy between shareholders and the equity of capital. But such principle may lead to the impairment to the rights of minority shareholders. In practice, it is easy for majority shareholders to turn their own mind into the decision of company because they hold the majority voting shares of the company. In the case of lacking of forceful restriction, the majority shareholders may take various methods to damage the interest of company and other shareholders. In consideration of it, many countries and regions adopt a series of means to supply remediation to minority shareholders in their corporation laws, and the appraisal right is one of the means mentioned above. Appraisal right refers to the right of dissent shareholders to ask the company to buy-back their shares at a fair and reasonable price when some material changes of company will happen. Appraisal right springs from the case law of USA as a kind of protective measures of minority shareholders during the merger of companies at the early time, and then it is applied in the case of the business transfer of a company, the purchasing of shares, the amending of the articles of association and so on.This system was not stipulated in Chinese Corporation Law until its latest revision in 2005. But there are still some imperfections. This article is to introduce the structure and the significance of the appraisal right system, and the legislation practice of this system of other countries and regions. Meanwhile, this article analyzes the legislation status in our country, and offers some suggestions to the application and amendment of this system in our country.The body of this essay is composed of three chapters. In the first chapter, the author introduces basic principles of appraisal rights; in the second chapter, the author makes a comparative study of appraisal rights in several important company law countries and regions including the USA, Germany, Japan, and Taiwan region, etc.; in the third chapter, the author studies articles 75 and 143 of Company Law of PRC, analyses the imperfections of them, and puts forward some suggestions on how to reform and refine them.