The Research Of Legal System Of Listed Companies Pubic Issue Preferred Stocks

Preferred stock system has more than two hundred years of history in the world, it’s one of the main financing tools on the securities finance market in the word, many developed countries have their own legal systems of preferred stock. But our country has not set up our own legal system of preferred stock, in practice, there are also only a few companies issue preferred stocks to get financing. Formally established preferred stock system in our country, can expand the scale of China’s securities market, can increase types of our country’s securities market financing tools, can enrich investors’ investment channels in our country, have great significance of our country securities finance market to be perfect. On March 21,2014, CSRC had published <Pilot management measures of preferred stock>, it marked the official start of the preferred stock system in China, from then on, our country’s enterprises have the legal basis to issue preferred stocks.Preferred stock is a kind of special hybrid securities, it has both common stock’s and corporate bonds’ characteristics. Preferred stockholders have the right to enjoy the right of Dividends Claim and the right of Distribution of Residual Property before the common shareholders, but there voting rights are restricted. But when the company unable to pay preferred stock dividends reaches a certain time limit, preferred stock shareholders’ voting rights can revive, they have the right to participate the company shareholders’ meeting and exercise the voting rights. The <Pilot management measures of preferred stock> stipulates the listed companies has the right of issuing preference shares, and the unlisted companies can non-public preferred stocks in our country. Because the listed companies very huge, the amount of financing very large, and the companies have many shareholders, the listed companies issuing preference shares affect a wide range. In the pilot stage at present, the <Pilot management measures of preferred stock> makes a detailed specific provision for listed companies public issue preferred stocks. First, the requirements are very stringent, only three kinds of listed companies can publicly issue preference shares; second, the stipulation of procedure of security offering is very detailed; third, it stipulate CSRC has the right to administrative supervision and management when corporations issue preferred stocks, and it has the right to administrative penalty the corporation when it breaks the rules.Preferred shareholders is the legal shareholders of the company, so their lawful rights and interests are protected by law. Preferred shareholder’s shareholder rights compared with the common shareholders are similar, but there are also some differences. Although the preferred shareholder’s shareholder rights protected by some rules in the <Pilot management measures of preferred stock>, but it does not mention the right of preferred shareholder’s new share subscription option, Shareholder’s right of Inspection and the right to address inquiries. On the whole, the protection of the preferred shareholder’s rights is not very comprehensive, needs to be further developed and perfected. Beyond that, the issue terms of publicly listed companies issuing preference shares are very stringent, the CSRC can relax issuance conditions when the time is right, so it may makes more and more listed companies can solve their financing needs through public offering of preferred stocks. When the preferred shareholders’ shareholder rights suffered the company violation, they can through judicial means to safeguard the preferred shareholder’s legitimate rights and interests, so the law should allow preferred shareholders institute preferred shareholder representative lawsuit and institute legal proceedings to confirm the shareholders meeting’s and the board meeting’s resolutions are null and void, or institute legal proceedings to repeal the shareholders meeting’s and the board meeting’s resolutions.