A New Way To Break The Company Deadlock

The mandatory acquisition of stock rights is not stipulated in the current company law of China,which is mainly based on the principle of capital maintenance.But in order to resolve the company deadlock,it is necessary to legislate the mandatory acquisition system.In theory,the solution of corporate deadlock can be realized by means of equity transfer.However,based on the personality of a limited liability company,equity transfer is difficult to be realized in a company in deadlock.The company law has set relief measures for judicial dissolution and strict application conditions for company deadlock,but there are many drawbacks in judicial dissolution.Therefore,China's company law can seek other relief measures for company deadlock.Based on the concept of company maintenance,the company can break the deadlock and keep the company alive at the same time.The main text of this paper consists of three parts:The first part elaborates the existing legislation to solve the corporate deadlock and its limitations.Firstly,the paper introduces the basic theory of corporate deadlock,including its meaning,characteristics,classification and causes,and points out the difficulties in solving the problem and the harm to the interests of all parties by illustrating the destructive,persistent and legal characteristics of the corporate deadlock.In view of the company's deadlock predicament,there are mainly two relief measures,equity transfer and judicial dissolution.Equity transfer is easy to be realized in a company with a good running situation,but there are obstacles in a company in a deadlock.In practice,it is rare for a company in a deadlock to resolve the deadlock through equity transfer.In the case of judicial dissolution,although mediation is clearly stipulated by law as the pre-procedure for the dissolution of judgment,the application of mediation principle is not satisfactory,and the dissolution of a company in the deadlock is even contrary to the company's philosophy of maintaining and harmful to its economic interests.The second part demonstrates the theoretical basis of establishing the mandatory acquisition system of stock rights in China.The system is reasonable and feasible in China.In the legal perspective,first of all,the shareholder qualification is not permanent,and the shareholder identity can be deprived under certain conditions.Secondly,although the autonomy of the company should be maintained,the intervention of judicial power in the corporate governance under certain conditions can promote the realization of the autonomy of the company.In addition,this system and the legal capital system that our country USES are not contradictory.From the perspective of economic and social interests,the system is economically efficient and meets the needs of social interests.The third part puts forward the tentative idea of establishing the system of compulsory acquisition of stock rights in China through the comparative study of compulsory acquisition of stock rights.In the main body includes the shareholder and the company as the acquirer two situations.Shareholders have the priority of being the acquisition subject,and the company can be the repurchase subject if the shareholders have no intention to purchase the equity.In determining the equity price,it also provides a qualified third party to evaluate the valuation method and the court-determined equity price method on the basis of the preference of both parties for autonomy.As for the restrictions on the sources of funds for the acquisition of equity,when a company is the subject of buyback,strict restrictions should be imposed on the sources of funds in order to protect the interests of creditors and prevent shareholders from maliciously withdrawing capital.In addition,it also elaborates the situation that the system is not applicable and the relevant procedural provisions.