Triggers For Appraisal Right In Limited Liability Company

Under the rule of capital majority,the limited liability company's minority shareholders are often forced to abide by the determents of majority shareholders.To avoid shareholder's reinvestment to totally different companies,the share repurchase regulation of dissent shareholders or appraisal right was designed.The appraisal right was first invented in America.Such a rule means a lot to limited company.In the aspect of regulation value,the appraisal right makes up to the defect of closely-held and mutual trust system of limited company.In the 2005 Amendment of The Company Law,appraisal right was initiatively introduced to China.Three application circumstances or triggers are emulated in this law.The first is when company refuse to distribute profit in a long term.The second is when company merges,divides or transfers the main estate.The third is when company revise its articles to make itself continue to exist.Among them the first and third circumstances is exclusively created by China.Though applied in China for about ten years without any revise,Chinese appraisal right,compared to foreign ones,is far from detailed in its triggers and need eagerly a judicial explanation to get perfect.To make the research more persuasive,we looked up for related casesin three years form the Chinese Arbitrary Document website and made specific statistics.In process of examining the cases,we found a lot of problems in the definition of appraisal right triggers which are exactly the main reason to the weakly implement of appraisal right in Chinese judicial practice.Comparative studies and Case studies are both employed in this paper.A perfection suggestion is finally provided.The paper is divided into 4chapters.Chapter 1 discusses the history and legal principle of appraisal right and explores its significance to limited company.Chapter 2 gives respective examination to several country's triggers for appraisal right.Two triggers i.e.long-term deficiency of profit allocation and amendment of company's article for the purpose of continuing existence are particularly examined for their abroad legal regulation.Chapter 3,through analysis of recent related case,finds out the problems of applying triggers of appraisal right in judicial practice.Chapter 4 gives advisement on perfection.In this chapter we attempted to solve the problems with judicial explanation and suggested that expanded explanation be adopted.