| Share repurchase is a financial instrument commonly used in the capital market and is one of the important system in Company Law.In our country’s commercial market,share repurchases can be used as an instrument for managing a company’s market value,preventing hostile takeover and realizing dividend policies,besides cooperating with employees holding and as an instrument to reduce capital.However,as a kind of ever-innovative financial instrument,the market practice of share repurchases also brings severe challenges to traditional Company Law theory and practice.Combining the trend of previous amendments to Company Law and the latest draft revision of the Company Law,it is easy to see that the main purpose of the legislation is to maintain the stability of the market and the attitude towards share repurchases is relatively lenient,resulting in the poor consideration of risk prevention.Along with the rapid growth of repurchase scale,problems such as repurchase performance,information disclosure and transfer of interests are common in practice,reflecting the interests balance problem between the repo system and the protection of corporate shareholders and creditors.Based on an in-depth understanding of the legislative system and judicial thinking of share repurchase,this paper uses the structuralism research method to clarify the economic essence of share repurchases and sort out the system positioning of share repurchases,in order to provide suggestions for the improvement of legislative regulation and judicial application of share repurchases.This paper discusses the regulation of share repurchases in the following four chapters.The first chapter “Deficiencies in the Legislation and Application of Share Repurchase” identifies the logical errors in the judicial application of share repurchases by sorting out the three points of judgements in recent years in cases of share repurchase performance disputes.In the actual performance of share repurchase,the court examined whether the target company had completed the capital reduction procedure,as the basis for determining that “shareholders shall not withdraw their capital contribution” and the mandatory provision of Article 142 of the Company Law.This adjudication rule is unified in the Minutes of the National Court’s Civil and Commercial Trial Work Conference,however,the principle of reviewing the pre-capital reduction procedure misplaces the relationship between share repurchase and capital reduction.This chapter takes the structuralist approach to examine the system positioning of share repurchase in the Company Law,adopts the perspective of large distribution to identify the economic essence of share repurchase as distribution,thus deducing that the current regulatory path of share repurchases is logically flawed.The second chapter “Analysis of the Value of Share Repurchases and Historical Changes of Regulation” affirms the value incentives brought by share repurchase as an instrument to companies,shareholders and employees,and it provides a theoretical basis for the study of the value of share repurchase.At present,the main regulation of share repurchase is in the Company Law.Summary of the previous amendments to the Company Law reveals that the changes made to the share repurchase system show a lenient trend.On this basis,I rationalize the current regulation system of share repurchase,which lays the legal foundation for the system reform proposal of share repurchase in future.The third chapter “Theoretical Proof of Company Law on the Modification of Share Repurchase Regulation” analyzes the current regulation of share repurchases from the perspective of the capital maintenance principle of Company Law and creditor protection.The regulation of share repurchase has been relaxed with the revision of the Company Law,but the subsequent risk regulation has not kept pace with it,which is contrary to the capital maintenance principle and does not help protect creditors’ interests.In particular,the deletion of restrictions on the source of repurchase funds and the absence of a treasury stock system challenge the company’s asset maintenance and solvency,raising the issue of protection of creditors’ interests.The fourth chapter “Improving the Regulatory Path of Share Repurchase”.As the issues raised in the above three chapters,it is advisable to adopt a large distribution concept,incorporate share repurchases into the regulatory system of distribution,and redefine the positioning of share repurchases in the system under Company Law.In terms of the return of financial resources restrictions,we shall learn from the experience of overseas legislation,introduce solvency tests and business judgment rules,and improve the financial resources constraints of share repurchase system.It is prudent to treat the disposal of shares after repurchasing,design the system of treasury shares,clarify the nature of treasury shares,and trade regulation in the implementation subject,procedure and information disclosure of treasury shares. |
