The Performance Dilemma and Countermeasures of the Put Option Agreement under the New Company Law

As an important tool of equity financing, the put option agreement has played a key role in solving the financing problems of enterprises. However, its performance faces multiple legal predicaments under the framework of the new Company Law. The core of the put option agreement lies in balancing the interests of both investors and financiers through the valuation adjustment mechanism, but its effectiveness and performance have long been controversial. China’s judicial practice has gone through three turning points, namely the “Haifu Case”, the “Huagong Case”, and the “Yinhaitong Case”, gradually shifting from “negation of effectiveness” to “separation of effectiveness and performance”, and ultimately focusing on the concretization of performance conditions. The “Nine People’s Court Opinions” clearly defined the validity of the put option agreement, but by binding the equity repurchase with the capital reduction procedures, it led to prominent performance difficulties. Specifically, the equity repurchase of the target company needs to go through the capital reduction procedure, but the conflict of interests among shareholders makes the targeted capital reduction difficult to achieve. Cash compensation is restricted by the company’s profit distribution rules and the shareholders’ ability to fulfill their obligations, presenting a double obstacle. In response to the above problems, this paper proposes a solution approach combining “prevention in advance” and “relief after the fact”. Pre-emptive prevention includes: strengthening information disclosure to safeguard creditors’ right to know, avoiding procedural deadlocks through conditional capital reduction resolutions, and introducing third-party acquisition mechanisms to diversify risks. Post-event relief draws on the “solvency test” of the United States, with the balance sheet test, balanced solvency test, and significant asset insufficiency test as the core, to distinguish the company’s performance ability from business risks and balance the interests of all parties.