Perfection Of Judicial Dissolution System On Limited Liability Company Deadlock

The limited liability company’s characteristics of personality and closure are much easier to give rise to the company deadlock in company autonomy, which leads to the company ’s decision-making and management mechanisms paralyzed and great damage to the rights and interest of the company, shareholders, especially minority shareholders, creditors and other stakeholders. In order to solve the problem of company deadlock, Company Law amended in 2005 established the judicial dissolution system, however, the legislation about it was too general, without relevant procedures and regulations as well as in lack of operability. In addition, the remedies of the system were too single. In fact, the judicial dissolution system in 2005 didn’t have a complete mechanism. Although Explained the Companies Act II in 2008 further defined the company deadlock and regulated some specific problems in litigation, it still didn’t essentially fill the legislative shortcomings of this system, and the functions of the system couldn’t play an effective role. Thus, how to perfect the judicial dissolution system has become a hot academic topic in recent years in company law field. This paper will combine with the characteristics of a limited liability company deadlock to have a research on how to solve the company deadlock and perfect the judicial dissolution system. This paper will be divided into four parts.The first part is to raise the specific problems from the practice of the judicial dissolution system. The second part is to state the reasons caused by the limited liability company deadlock and the sorts of the limited liability company deadlock,and to put forward the measures to perfect internal system, conciliation, judicial remedies and so on. Meanwhile, this part will prove the judicial dissolution system is a main way to solve the company deadlock, but not the only way. The third part is to combine with China’s judicial practice to raise some opinions about how to draw lessons from foreign countries’ judicial dissolution systems based on the comparison of some modern nations’ judicial dissolution systems. The forth part is to make some specific suggestions about how to perfect China’s judicial dissolution system of the limited liability company from aspects of the judicial dissolution system’s legislative principles, specific procedures, alternative measures and so on.