1.4 Organization of this research

The task of this book is to examine the exit remedies in Chinese company law after the reform in 2006 from a comparative perspective. It undertakes an overall assessment of the new appraisal remedy and a tentative exploration of the oppression remedy in the new company law. The purpose is to pinpoint problems in the current legislation and make recommendations by drawing attention to the practice in other jurisdictions, namely the UK and US.

Chapter 1 is the introductory chapter illustrating the background, methods, significance, outline and central question of this research.

Chapter 2 is mainly descriptive. It presents the landscape of Chinese company law, sources of the company law, major revisions in the company law 2006, and company forms (with emphasis on foreign investment enterprises which are predominately close companies in China). This part also deals briefly with the newly introduced exit remedies, namely, the appraisal remedy in Article 75 and the oppression remedy in Article 20.

Chapter 3 is about gaining knowledge on how the appraisal remedy and the oppression remedy are prescribed and applied in the US. Section 3.2 briefly introduces the sources of corporate law and corporate forms in the US for the convenience of later discussion. Section 3.3 studies the appraisal remedy in the US. The first part of Section 3.3 provides a brief history of the emergence of appraisal rights and the purpose of appraisal rights. The later part of the section explores and compares such issues as appraisal triggers, procedures and the meaning of fair value in the latest version of the MBCA, the Delaware statute, and the American Law Institute principles (hereinafter the ALI principles). Section 3.4 is about the oppression remedy. It starts with the introduction of the history and rationale of the oppression remedy. Subsections 3.4.3-3.4.5 investigate such issues as the interpretation of "oppression", forms of relief offered by the remedy, and valuation of shares. This chapter ends with an analysis of the relationship between the oppression remedy and the appraisal remedy.

Chapter 4 studies the appraisal remedy and the unfair prejudice remedy in the UK. It begins with the sources of company law and corporate forms in the UK. Section 4.3 gives a brief introduction of the appraisal remedy in the UK. Because the British utilize this remedy in very restricted situations and Chinese company law has taken the RMBCA version as its main source of inspiration, instead of a detailed examination of the British rules, some ink is spent to answer the intriguing question: Why is the regime of appraisal rights in the UK so different and how are the appraisal triggers in the RMBCA dealt with in the UK? Section 4.4 explores elements of the unfair prejudice remedy, with an emphasis on the judicial standards adopted by the court in construing the term "unfairly prejudicial", and the domaio of oppressive acts summarized from case law. This chapter concludes with criticism of the unfair prejudice remedy and proposals from the Law Commission in the UK to improve the situation.

Chapter 5 examines the exit remedies in the new company law in China and applies knowledge gained from Chapter 3 and Chapter 4 to improve the situation in China. Section 5.2 provides a panoramic view of minority shareholder protection in Company law 2006, including ex-ante protection and ex-post remedies. Section 5.3 evaluates the newly introduced appraisal rights in Chinese company law from the viewpoints of triggering grounds, procedural issues and valuation issues. With knowledge gained in Chapter 3 and Chapter 4, suggestions for reform of this remedy are subsequently offered. Section 5.4 analyzes the possible oppression/unfair prejudice remedy in China, Article 20. The study of this remedy will mainly focus on highlighting the differences of the remedy in China as well as the problems in application under the circumstances of the Chinese legal culture. It concludes with recommendations to improve the current situation and a call for an expansion of the exit remedies in China. In the last part of this chapter, the issue of the applicability of the exit remedies to FlEs in China is also dealt with.

The last chapter of this book is a concluding chapter with answers to the research questions listed in Section 1.5 of this chapter. And these answers constitute modest recommendations for better shareholder protection in China in the area of exit remedies.

I, however, need to remind my readers in advance of two things. Firstly, in any subject study, it is impossible to cover all relevant issues in one work. For instance, concerning the appraisal remedy, this book does not cover issues like how to operate the repurchase; where the finance for repurchase comes from; creditors' protection, and so on. Secondly, in relation to the study of this remedy, because of the initial stage of this remedy in China as well as the standard-based and discretional nature of this remedy, instead of a detailed comparison of cases and specific rules, this research focuses more on utilizing the development in other jurisdictions and recommending a whole-scale reconstruction of the remedy from the comparative study.