A Study on Judicial Intervention in China’s Corporate Impasse: Focusing on the Application of Judicial Dissolution of a Company

Abstract

Purpose - As one of the great inventions of modern society, the company system is an important driving force for social progress. As a malpractice in the operation of the company, the deadlock of the company is harmful to the company itself, its shareholders, creditors and even the public.
 Design/Methodology/Approach - The judicial dissolution system in Article 183 of China’s current Company Law provides a legal basis for judicial intervention in the deadlock of the company and fills the legislative gap. Yet the corporate stalemate is not simply linked to judicial dissolution (Bao Weimin, 2005). Corporate deadlock is only one of the reasons why shareholders have the right to request judicial dissolution; judicial dissolution should not be the only solution to the deadlock.
 Findings - Forcing the dissolution of the company to resolve the deadlock is clearly wrong for shareholders who want to resolve the deadlock but do not want to destroy the company.However, China’s current Company Law provides too single judicial remedy, too general regulations and weak operability.
 Research Implications - This paper discusses the extension and connotation of corporate deadlock and analyses the rationality of judicial intervention (Wang Jianjian, 2013). This paper also analyzes the concept and characteristics of the company deadlock, and provides a standard for the determination of the company deadlock, limits the environment of the company deadlock to limited liability company and further limits the scope of the discussion.