4.3.1 Introduction

As explained in the American part, the appraisal remedy is an exit mechanism which can be triggered if the majority takes a particular type of decision. In this case, the minority can apply for an exit without any need to prove possible wrongdoing committed by the majority in taking a particular decision. British company law does not recognize this kind of remedy. The only form of appraisal rights in the UK is provided onder sections 110-111 of the Insolvency Act 1986, according to which, in a company proposed to be, or being, wound up voluntarily, the liquidator of the company may arrange a scheme to transfer the whole or part of the company's business or property to another company ("the transferee company"), and the members of the transferor company may receive shares or like interests from the transferee company. A member of the transferor company who does not vote in favour of the special resolution and expresses his dissent in writing to the liquidator within seven days after the passing of the special resolution may require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by agreement or by arbitration. If the liquidator elects to purchase the member's interest, the purchase price must be paid before the company is dissolved, and the dissenter can leave the company after the payment.

This chapter will briefly introduce appraisal rights in the Insolvency Act in the UK. A detailed examination will not be made because the appraisal remedy in the UK is extremely restricted and the new Chinese company law has adopted the form similar to the one in the US. Later, a comparison of this remedy will be made between the US and China. It is nevertheless interesting to explore why the regime of appraisal rights in the UK is so different and especially how the appraisal triggers in the RMBCA are dealt with in the UK.