An Empirical Study On The System Of Appraisal Right For Dissenting Shareholders

The appraisal right,as a constituent part of the shareholder withdrawal system,is an important mechanism for the interests of the equity objection shareholders,the company,other shareholders and the creditors of the company.Dissenting shareholders use this system to value their shares and request the company to buy them at a more“fair”value.Nowadays,this system has been adopted and developed by many countries in the world,which has given new life to it.Under the protection of the dissenting shareholder’s right to repurchase shares,the legitimate interests of small and medium-sized shareholders have been protected to a certain extent,which has played a positive role in the overall development and operation of the company.China’s current Company Law has undergone a number of amendments since2005 when it first introduced the system of the appraisal right.In December 2021,The Company Law of the People’s Republic of China（Draft Revision）,which was considered by the Thirty-second Meeting of the Standing Committee of the Thirteenth National People’s Congress,was formally made available to the public for comments.From the content of the draft,although the shareholder objection repurchase system is covered,there are no significant changes to the core issues such as the subject scope,applicable procedures and price determination of the objection shareholder’s right to request for share repurchase.Through the empirical data analysis of a large number of relevant cases,in recent years,the number of judicial cases involving the right to repurchase the shares of dissenting shareholders has been increasing year by year in judicial practice.In these cases,shareholders face a series of difficulties in claiming the right to request the company to repurchase their shares,which are manifested in the narrow scope of the subject of the exercise of the right and the objective trigger,the simplicity of the applicable procedural provisions,and the vague criteria for determining the price.Because of the above problems,it is often difficult for dissenting shareholders to claim their rights,and their legitimate rights and interests are difficult to be protected.Moreover,in specific cases,there are differences in the interpretation of the scope of the subject matter,triggering grounds,applicable procedures and criteria of the repurchase price of the shareholder’s right to repurchase by dissenting shareholders in different courts,and there are many cases of different judgments in the same case.It can be seen that,under the current legal regulation,the right to repurchase shares of dissenting shareholders still faces many problems in the process of exercising the right to repurchase shares,which needs to be solved.In order to protect the rights and interests of shareholders and promote the healthy development of the company,we can find the improvement path of the system of share repurchase right of dissenting shareholders in China by combining the relevant theoretical and practical research at home and abroad,while referring to the foreign legislation and the problems exposed in the domestic judicial practice.The scope of application of the subject matter and the scope of the objective triggering cause of the right to repurchase the shareholding of dissenting shareholders can be appropriately expanded.In terms of the scope of the subject matter,the rights of hidden shareholders and preferred shareholders should be conditionally granted with reference to those of ordinary shareholders.In terms of objective triggers,the amendment of the articles of incorporation should be added as an objective cause,and the validity of the repurchase agreement between shareholders and the company should be explicitly recognized in the legislation.At the same time,the specific criteria for determining the objective cause should be further clarified in the legal provisions to prevent the problem of different court decisions due to the lack of specific criteria.As for the applicable procedures of the appraisal right,we can integrate foreign legislation for reference and refine the procedures to prevent dissenting shareholders from claiming their rights due to procedural problems.As for the issue of the price standard of the appraisal right,it is also possible to refer to foreign legislation to clarify the existing vague standard and weigh the interests between the company’s creditors and shareholders,in order to maintain the good operation of the company and to escort the optimization of China’s business environment.