Protection Of Minority Shareholders In Limited Liability Company

The principle of capital majority is the basis for the operation of company. Controlling shareholders usually abuse this principle and control the election of directors and supervisors with their majority capital to manipulate the corporate affairs, which impairs the interests of minority shareholders and the company. If there is no reasonable and effective protection and exit mechanism, there is very little minority shareholders can do when their rights are damaged by controlling shareholders. As a result, how to protect the legitimate rights and interests of minority shareholders has become the focus of discussion in both theory and practice. These thesis analyses various ways the legitimated rights and interests are impaired from the perspective of corporate legal practice. This thesis gives a detailed analysis of the system of the protection of minority shareholders in a limited liability company under the new Company, and further points put some limitations of the new Company Law. Then, the author puts forward suggestions for the improvement of the protection of the rights of minority shareholders with a special focus on the discussion of cumulative voting system and shareholder derivative litigation system. The author believes that the introduction of the above-mentioned two systems will further improve corporate governance in China and will guarantee the protection of minority shareholders.