A Study On The System Of Shareholders' Derivative Action

The reason for the author choosing the question of the System of Shareholders' Derivative Action as the study topic of this article, is more and more disputes that the shareholder sues replacing his company are filing with the courts. But the laws and regulations of our country such as Company Law and Civil Procedural Law failed to stipulate this system. Under this situation, the courts took different action to deal with this new kind of case. Some dismiss the suit as the reason of no lawful right; some hear the suit directly according to the theory of foreign countries. For without consolidated understanding, the concrete procedure and operation of these courts are quite different when hearing the case. The system has become the main problem not the theory of company law but the judicial practice.Company is the most basic market subject of modern market economy. Modern company is the unity of opposites of all kinds of interests relationship. The safe, complete of company's assets is the essential way to protect the interests of all stakeholders such as shareholders, creditor, employee and tax authority. Among these stakeholders, the shareholders are no doubt the most direct and eventual one. The subscribed capital of shareholders formed the property right of legal person of the company, and the shareholders enjoy the shareholder's right therefore, liable for the duty and excising the right on the basis of the status of shareholder. Essentially speaking, infringement on the company's interests, will invade the shareholders' interests in the end. So the company law of other countries increasing perfect the legal system relating to protect the company's interests and therefor the shareholders' interests. The system of shareholders' derivative action is one of such important systems. According to this system, when the company's interests is infringed, especially infringed by the controlling shareholder, parent company and directors, the company neglects to suit or the controllers refuse to suit in the name of company, the qualified shareholders can sue in his own name according to the lawful procedure.The system of shareholders' derivative action was developed from the case under law of equity of the common law countries. It protects the company's interests at maximal extent and also it is the last line of defense for protecting the shareholders' interestss. So it not becomes the important system of company law of common law system countries, but extensively accepted by those of continental law system countries. But Company Law of our country only provides the direct litigious right of shareholders. So, when studying this system, this article takes the comparison method as the basic way. Comparing this system in America, England, Japan and Taiwan, balancing and weighing the advantage and disadvantage, then taking the developing status of laws and company system of our country in consideration, the author provides her advises on relevant procedure and mechanism of our new system. This article begins with the basic questions such as its origin, development, characteristic and function, and particularly analyses the following problems: the qualities required of the plaintiff shareholders, the scope of the defendant and his wrong doing, the judicial status of company and other shareholders, and the pre-requisite procedure before raising an action. This article also discusses the relevant mechanism of motivating and restriction. The author holds that, in the system of our country, this judicial right shall be provided as individual shareholder right, shall not restrict the share holding quantity and holding time and duration; the scope of the defendant shall be the same as that the company can sue against, and the shareholders can sue only if he infringed the company's interests. The author also holds that the company shall be the independent Third Party in the derivative action. The shareholders shall put request toward the board of supervisors and exhaust inter corporate remedies befo...