The Research On The Shareholder's Preemptive Right

Issue of new shares is the main way of corporate finance in developed countries; it will influence shareholder's rights. According to Article 134 in Corporate Law of the People's Republic of China, a shareholder has the right of the preemptive right, but it's is very immature for protection of shareholder'right in our corporation and securities system. At the same time the study of the preemptive right is far away from the operation of the corporation in the market economy. This article discussed the above questions of the shareholder's preemptive right. After introduction of the Formation and Evolution of the Preemptive Right and an all-round Definition of the Shareholder's Preemptive Right, the article states the Conception of the Shareholder's Preemptive Right. The Shareholder's Right is shareholder have right to subscribe for the new shares which will be issued by their stock corporation according to their proportionate interests when their stock corporation issues new shares. Then this article studied the nature of the Shareholder's Preemptive Right. In fact, the Shareholder's Preemptive Right has the quality of property right, and it can be assigned, inherited and pledged to another by the shareholder. The other important quality of the Shareholder's Preemptive Right is that it is inherent right of shareholder, and it is an integral part of the ownership of shares, and it can not be deprived of. Making mention of the quality of the Shareholder's Preemptive Right, it must study the traditional legal theory which studied by academician of Germany. The third chapter of this article states some special subjects of the Shareholder's Right. Such as the others of preemptive right, shareholders who have different shares, the corporation itself, shareholders of corporate existence, trust estates. The objects of the Shareholder's Preemptive Right involve new shares of capital subscription without cash, new shares of subscribed by staff of corporation, new shares which issue by corporation after takeovers and mergers, treasury shares, convertibility bonds. The right must have adequacy of legal remedies, and there several ways to protect the Shareholder's Preemptive Right. The most important two remedies are accusation of revocation performed on resolution of shareholders'meeting, and action for reimbursement. The last chapter of this article studied shareholder's right in our special market economy, and it emphasized on studying the quality of "right offerings"."Right offerings"is one kind of Shareholder's Preemptive Right, and this quality is very important for the full current state-owned shares. It pointed out state-owned shares must attach importance to the Shareholder's PreemptiveRight to protect state-owned shares from diluted. This article's key point is that it must admit the Shareholder's Preemptive Right as an inherent right of shareholder, and it is an integral part of the ownership of shares, for the stock corporation. The new ideas of this article are that the Shareholder's Preemptive Right is useful for protecting the shareholder's right, especially for state-owned shares. It's difficult to study the quality of the Shareholder's Preemptive Right and operation of the Shareholder's Preemptive Right in special circumstance of China's. It's new for China's academic areas to study shareholder's right, in fact it is very important to study shareholder's right to protect shareholders from damages, and it hopes that this article may be useful for studying the shareholder's right.