The Remedy Of Corporate Intention Flaws In Merger

Merger refers to a behavior that more than one corporate merge into a subject under a contract signed together. Some legal relationship like transfer of property, inheritance of rights and obligations, changes during the process. Therefore, it is regarded as an effective market means to allocate resources, expand business, expand enterprise scale and occupy the market share. However, form the perspective of law, corporate combination is a kind of legal action. True meaning representation is a necessary element to achieve the legal results. With the development of merger and acquisition market recently, lots of M & A disputes come along, and fraud is a main reason of validity of a contract.To study the effect of the meaning of mind to the corporate combination, standing from the merger agreement, the paper analyzes the possible intention flaws, when corporations involved in the merger sign the contract. According to the two different phases of manifestation, it summarizes some of the major flaws of the meaning of that type, and analyzes the effectiveness of various types of meaning of that state under the influence of defects of the merger agreement, and the current ways to seek relief under the system. Drawing legislation and dispute solutions from European Union, Japan, South Korea, etc,which the market development is more mature and law is more sound, the paper aimed at the existing legal system defect, puts forward several proposals from the perspective of "Prior supervision and prevention", “dispute resolutions” and “liability for fault and compensation for damages".The paper can be divided into introduction, body and conclusion three parts.The first chapter describes the company’s intention defects and their impact on the effectiveness of the combined company. Since the merged corporate entity legal relationship of intention is the research subject of the article, it introduces the definition and structure of the company’s intention, which will be divided into internal and foreign intention in two stages. Binding characteristics of the merger transaction, summed up the process of merger of the corporate entity and the meaning of that form. Second, analyze the type of the company’s intention defect. The flaws produced in the interior meaning includes cases that blemishes shareholders’ meeting resolution, the resolution due to flawed individual or all shareholders voting behavior which led to the meaning of blemishes and other circumstances; the defects produced in the foreign intention includes cases that the company’s management forgery, tampering with the resolution of shareholders, or changing the terms of the agreement but not the main consideration of the case by the shareholders’ meeting. At last it discusses around the effectiveness of merger which has defect meaning. Combined with the unique merger of the value of transaction security and efficiency of the pursuit,analyze various types of intention under the influence of defects in which the effectiveness of the combined company will eventually status.The second chapter discusses the legal way can be used for the merger remedy defects in the existing system of China. Remedies under the current legal system mainly includes the resolution "Company Law" special provisions defect litigation and shareholder derivative litigation, Civil Procedure Law annulment, change the contract or invalidate a contract litigation. These litigation, although provide a channel for claiming rights for consolidation and other interested parties to some, many of the deficiencies in judicial practice still exists, which is embodied in the problem that right cannot be exercised after the completion of the merger, the unreasonable limitation period, not unified litigation and so on, which need further supplement and perfection.The third chapter proposes some suggestions directed against problems discussed above.First, the company should focus on the prevention in advance of flaw meaning, including take specific measures to sound supervision mechanism in the formation of meaning and meaning intention stages and protect shareholders’ right to know and address questions about the merger. Second, establishing the merger invalid construction litigation as a unified litigation to confirm the effectiveness of the merger after the completion of merger, to ensure that the main proceedings clear, consistent and reasonable limitations, both to enhance the efficiency of dispute resolution, but also to achieve the goal of Mediating contention. Finally, completing set of fault attributable to the claim and mechanisms to support victims compensation to the innocent party claims, including the merger between the parties and a third person accountable to the legal relationship outside the merger, so that the interests of the injured party access to remedy.The conclusion of the article discusses the purpose and main point briefly.