4.1 Introduction of this chapter

The purpose of this chapter is to explore the exit remedy in a close corporation in the UK. It first briefly introduces sources of company law and types of companies in the UK, and then examines the appraisal remedy and the unfair prejudice remedy.

This chapter gives only a brief introduction to the appraisal remedy in the UK because the British make little use of this remedy and the basis for this remedy in the UK is totally different from the basis of its US counterpart, which is the main source of inspiration for the exit remedy (Article 75) in Chinese company law. In the UK, appraisal rights can only be found in ss. 110-111 of the Insolvency Act 1986 for schemes of arrangement during a voluntary winding-up.

Considerable attention in this chapter is paid to the unfair prejudice remedy, which is, broadly speaking, a counterpart of the oppression remedy in the US. Two central issues concerning this remedy discussed in the US part will also be studied in this chapter, i.e., the meaning of the term "mifairly prejudicial" and valuation in the buyout remedy. Recommendations on this remedy made by the UK Law Commission are also considered in this chapter.