Restructuring Of The Share Exchange Legal System

With the globalization of the economy, international acquisitions spring up continuously, China is also involved in it actively. But the majority of our acquisitions use the cash as the payment of the price, the Financing arrangements and methods of payments are extremely simple. Due to financial bottlenecks constraints, the form of corporate restructuring is greatly restricted. In contrast, the foreign country have extensive means to comply their corporate restructuring, especially since the20th century, the development of the Share Exchange is particularly brisk. As a new means of mergers and acquisitions, Share Exchange pays the price by the issue of new shares, in this way, the corporation’s financial pressure can be reduced, At the same time, the target company’s legal personality is preserved, the two companies established controlling relationship by shares.In recent years, our explore of Share Exchange has Increased, at the end of2004, A message says that Lenovo Group, China’s largest computer manufacturer takes over the IBM’s global desktop and notebook business by a total of＄1.75billion in cash and stock. However, the law also does not provide shares as payment, According to Article27and Article28of the "Provisions on Merger and Acquisition of Domestic Enterprises by Foreign Investors", Merger and Acquisition of a domestic company by a foreign investor using equity as a means of payment referred to in this chapter shall mean acquisition of equity of the shareholders of the domestic company or new shares issued by the domestic company by the shareholders of an overseas company using the equity of the overseas company held by the shareholders as a means of payment or by the overseas company using its new shares issued as a means of payment. Shares have been recognized as a special means of payment. But the scope of the Provision is narrow; the foreign investors must be Listed Companies, this rule can not be compared with Share Exchange.For this reason, some Chinese scholars began to study Share Exchange, in order to make some efforts for the introduction of Share Exchange This article also expect to do some research on the basis of our predecessors. The first part of this article discusses the concept and value of share exchange. Mainly, on one hand, I introduce Triangular merger and Inverted Triangular merger in the United States, on the other hand, Japan’s stock exchange and share transfer are very representative, at the same time, the development of Taiwan district’s stock exchange is far more than the mainland, we can learn from them, on this basis, I come to my own conclusions. To consolidate the theoretical basis of the Share Exchange, The later content followed discusses the value of the Share Exchange, the nature and legal basis.The second part of the essay is to build the Share Exchange system, Mainly related to how to legislate, I think that the Share Exchange mainly contains production of the Share Exchange contract the special resolution of the shareholders’ meeting, Share Exchange’ information disclosure, The entry into force of the Share Exchange. In order to improve the efficiency of the mergers and acquisitions practice, this paper, modeled on the United States and Japan, sets up a simple Share Exchange program and slightly-Share Exchange program. The third part is the protection of minority shareholders in Share Exchange, The protection of minority shareholders has always been a major theoretical issues in the Companies Law, Stock Exchange is to force the minority shareholders to exchange shares. So I set up of specific measures, measures include protection of the right of information obtaining, Giving dissenting shareholders buyback rights of shares, Recognition of Share Exchange is invalid. The fourth part is the protection of creditors, To make a distinction between general creditors and special creditors, measures include the protection of the right to know, Recognition of Share Exchange is invalid and piercing the corporate veil to investigate the responsibility of the holding company. The last part is the conclusion, pointing out of the view of the article and inadequacies.