Company Shareholders' Meeting Resolution Of The Defect And Its Judicial Relief

In the modern corporate system, the separation of ownership and operation rights is one of the important characteristics. The goal of legislation is to seek a balance between major shareholders and minority shareholders and to guarantee the rights of minority are not abused by the major shareholder and management level. As the decision-making authority, the shareholders general meeting constitutes the opinion of the company in the way of the resolution by capital of a majority vote. The so-called defect of the resolution of shareholders general meeting is defined as the legal deficiencies which affect the normal force. Therefore, the resolution which both the procedure and content are legitimate shall have legal effect; once there are defect in the procedure or content, the resolution can not be considered as a legitimate company meaning and can not be the representative of all shareholders, its effect should be negative. In order to ensure the legitimacy of the resolution and to protect the interests of the shareholders, especially the middle and minority shareholders, the legislation system stipulate corresponding legal provisions on such remedy of the defects of the resolution in the worldwide.In China, the old version of "Company Law" does not explicitly stipulate the invalidity and revocation system on the defected resolution, The Article 111 stipulates that the shareholders have the right to bring the defected resolution to the litigation, which violate their rights and interests. The new version of "Company Law" which come into force since January 1, 2006, which stipulates the defect of the shareholders general meeting's resolution, Article 22 entitles the shareholders to bring invalidity and revocation litigation, to protect the shareholders against the damage of the defected resolution by judicial remedy, by the means of remedy once the interests is damaged and provide the explicit legal norm regards the affirmation and legal consequences of the defected resolution. However, the Article 22 of new "Company Law" only build up a preliminary framework on such matter compared with the advanced system of other country or region, which exits huge gap between the judicial practice and should be further improved.Firstly, this article introduce the formation and the effectiveness of the resolution to explore the nature; follow with the analysis in depth regards the reason, the legal consequences as well as the evaluation of effectiveness of defected resolution; based on aforesaid, to build the remedy system from non-judicial remedy and judicial remedy as well as the relationship between them; finally, based on the status of China's Company Law combined with shortcomings of China's current legislation to put forward some specific legislative proposals. In accordance with this clue, this article contains the preamble, body composition and the conclusion. The preface introduce the research ideas, analytical frameworks, in addition to the research methods; and briefly discuss the importance of the resolution of the shareholders general meeting for the company and the shareholders; propose the connotation of the remedy system to show the protection for the minority and medium shareholders in the company law.Body consists of five parts:The first part focus on the formation of the resolution of shareholders general meeting to point out the certainty and rationality of the "capital of a majority vote" which is unable to overcome the shortcomings of its own– hide the possibility that the major shareholder infringe the interests of minority shareholders by manipulating the shareholders general meeting. By the analysis of internal and external effectiveness of the resolution to show that the resolution does not directly adjust the external relationship between the company and the third party, which put a hint for the fourth part, the external meaning shall remain in force to the third party which in good faith although the defected resolution has been revoked or null and void. This part also discusses the nature of the resolution based on the analysis of existing "legal act theory" and the "means to formation of means theory", point out that two views are reasonable but not comprehensive enough, the views should be combined. In other word, for the company, the resolution only means the formation of the company's thought to be further the expressed by collective actions to occur external legal effect; for the shareholder, the resolution means that convergence of the shareholders'thought and the legal act of the shareholder to the company.The second part describe what is the defect of the resolution of the shareholders general meeting, analyze the defect in procedure and defect in the content in order to provide different legal consequence and remedy for different defect hereinafter. Then, by comparative analysis of different consequences arise from different defect reason to analyze the current major exist the "rule of dichotomy" and the "rule of trichotomy " in the worldwide, by analyzing and comparing the logical principle and result of two different rule, to point out that "rule of dichotomy" exists deficiencies which is difficult to overcome, in the same time, demonstrate the rationality of the "rule of trichotomy" which more conform to legal logic as well as the judicial practice through a case which the author personally involved.The third part discuss the judicial remedy aimed at the defected resolution, namely, deny the effect of the defected resolution. To discuss the issue from the aspect of the procedure of revocation litigation, the invalidity litigation as well as the non-establishment litigation pointed to the defected resolution respectively, at the same time, to discuss this matter from the angle of the consolidation of action with the guarantee and rejected discretion, based on the principal of economic, stability of multi-party legal relationship besides the protection of third party who in bona fide. Finally, to analyze the effectiveness of judge and retroactive , which emphasize the protection of the in-good faith third party, that response to the view that the external effect of the resolution which do not adjust the relationship with the third party which discussed in the first part.The fourth part discuss the relief system defect resolution practice in the application of the trial, how to connect the old and new version of the company law regards the judicial remedy of the defected resolution, once again inset a case which the author takes part in person and put forward the view that it should be followed that the principle of advanced retrospective in the application of the two version company law.In the fifth part,analyze the advancement of the new "Company Law" compared to the old "Company Law" on this issue, but compared with relevant legislation of other countries and regions, China's legislation in this area still appears to relatively simple, there are still shortcomings. To recommend the opinion of improvement on the remedy system to the defected resolution on the basis of the analysis of other countries and regions'practice combined with China's actual situation.Conclusion, simply state the significance of composing this paper.