The Appraisal Right Of Dissenters

The appraisal right of dissenters is a newly-established system during themodification of corporation law which allowing those shareholders who object toresolution regarding fundamental changes to secede from the corporation. It isestablished to make a balance of interests between corporation and dissentingshareholders. It’s of great significance in improving corporate governance structureand protecting the interest of minority shareholders. The paper examines the relatedtheories concerning the appraisal right of dissenters and puts forward somesuggestions based on the current situation of the right performing in the law system.Chapter one: firstly, gives the brief introduction of the right including thedefinition and the legal nature, then compares with the related rights; secondly,describes its history and discusses the legitimacy of its existence, despite the disputebetween positive view and negative view, this paper firmly holds that theestablishment of the appraisal right of dissenters has its strong legitimate base.Besides, it further explains the theoretical base of the right, contract expectation righttheory, shareholders’ equality theory and company dismissal theory all agree theexistence of appraisal right of dissenters, finally discusses the functions of thissystem.Chapter two: reveals the evolution and current situation of the right, pointing outthe disadvantages of over simplifying provisions of the right in Corporation law. Then it illustrates the existing problems concerning six respects, including the scope ofapplication, shareholder kinds, right execution proceeding, buy-back price, sources offunds and appropriate restrictions.Chapter three: the paper offers some advice on the right based on my thoughtsand successful experience of its legislation in other countries and regions.Improvement of substantive rules: extending the scope of application, refining thekinds of shareholder, making the sources of funds clear and restricting on theexecution of the right. Improvement of procedural rules: firstly, reconstructing theright execution proceeding; secondly, setting up price evaluation mechanisms.