On The Protection Of The Rights Of Minority Shareholders

The thesis system matically discusses how to strengthen the minority-shareholder' rights and how to protect the minority-shareholder" rights . In the thesis the author also makes a comparison of China's company law with foreign laws and gives advices on the revision and improvement concerning corporate legislation.The thesis , except its preface and conclusion ,is divided into four parts .Part I: The present condition of minority-shareholder' rights protection and the value of constructing the protect system in China. With lots of data and facts ,the author discussed that minority-shareholder' rights of our country is seriously violated and the four causes of this condition .Next, the author analysis the lack and blemish of minority-shareholder' rights protection in our company law .Lastly ,the author demonstrated the value to establish the protection system.Part II: The theories foundation and lawmaking principle of minority-shareholder' rights protection. The three theories foundation is : The first one is that the basic aim of modern company law. The second is that the inevitable request of the equal principle of shareholder .The third is the honesty duty theories of majority-shareholder to minority-shareholder . The first lawmaking principe is equity and efficiency principle . The second is that rights cannot be abused. The third is The third is that rights should be checked and balanced.Part III: Perfect our company law to enhance the protection of minority-shareholder. Draw lessons from the lawmaking's successful experience of abroad company law, t he author in a specific way introduced five special law measures that gives minority-shareholder. They respectively is: (a) the accumulative voting system (b) the system, of limitation of rights to vote (c)the rights of minority-shareholder proposed to call a shareholder meeting and the rights to call a meeting by oneself, (d) the proposals ofshareholders system(e) the rights of querying .Pan IV: The relief of minority-shareholder rights. In China, to improve the current situations of minority shareholders, derivative action shall be introduced promptly. In this area, I suggest that the following elements be considered when introducing derivative action into Chinese Company Law. Firstly, the substantial requirements of a derivative action might be, (a) there must the breach of the law, regulation or corporate articles by the directors; (b) damages has been done by the directors to the company because of the breach and then the responsibility to compensate has been arisen; and (c) the company fails to diligently pursue proceedings. Secondly, the procedural requirements might be, the defendants of a derivative action shall be the directors or the majorities who have done damages to the company; and the company in the action will be a nominal defendant; the plaintiff shall be the current shareholders of the company and consistent shareholding during the whole proceeding may be required. Simultaneously, notice to the company before the action and the approval of the court to discontinue or comprise the action shall be required. The costs indemnity order may be granted to the minority shareholders. Nevertheless, it would be better not to require the security for costs. Thirdly, for the personal actions and the concerned substantial remedies, the mechanism of performing the compensation and buying-out of the minority shares shall be considered. Fourthly, class action shall be allowed in minority shareholder actions against torts in stock market.