Research Of Conflicts About Actural Cooperate Control And Their Legal Regulations In Limited Companies In China

Although the Company Law in China has already made some basic provisions about the allocation of cooperate control, with the rapid development of market economy and the impact of the management modes in other countries beneath the economic globalization, in the practice of our country, because that the fundamantal purpose of the companies is to profit, the company management members who have the right to make decisions or manage the companies’affairs sould be fighting for the cooperate control of their companies, and they all hope to get the best interests though getting the cooperate controlling and retricting the other management members. But beneath this kind of disputes, the rights and interests of some minority shareholders who have very less decision-making power and some investors of listed companies will be seriously damaged. In this article, I’ll mainly talk about the research of conflicts about actural cooperate control and their legal retulation in limited companies in China. There’re three key forms about the conflicts in limited companies, they’re cuperior control of major shareholders, internal control and the absence of supervision, they can exsist in almost three aspects in a limited company:decision-making, management and supervision. In our country, in the lecel of decision-making, conflicts about actural cooperate control and their influnce perform as conflicts about the convening and voting of the shareholders’meeting, the decision-making controlled by the major shareholders and the damage to the interests of minority shareholders. In the level of management, conflicts about actural cooperate control perform as management being controlled by major shareholders, the board of directors becomes formalized and internal control exsists easily, the procedure mechanisms of the board of directors are in adequate, and some conflicts may appear after company’s acquisition or merger. And in the level of supervision, conflicts about actural cooperate control usually perform as the composition of board of supervisiors being controlled by the shareholders’meeting or the board of dirdctors, which makes it difficult for the board of supervisiors to perform the duty of supervision, and in some of the listed companies, the duties of board of supervisiors and independent directors are conflicting. Also, sometimes the independent directors perform their duties carelessly.As being a legal worker, I hope to treat the disputes of cooperate controlling from a legal point of view, and to balance them by legislation. So I tried to make some suggestions to solve the problems from a legal perspective according to the decision-making, management and supervision. For decision-making, we should give the right to know and to proposal to the minority shareholders so as to protect their interests from damage, we can also use punitive regulations to prevent the convening and voting of shareholders’ meeting from being disturbed, improve the relevent legislation, and give the minority shareholders particular right of suits to help them fight with the superior control by the major shareholders. When it comes to management, I suggestted that the legislation may add some regulationgs about oversight mechanism and timely information disclosure system to prevent the major shareholders from controlling the management of companies, making some limitations to the selection of directors to avoid the formalization of the board of directors, and incentive mechanism is also a good way. And in the supervision part, I think punitive mechanism in the law can make the board of supervisiors become more independent, and incentive mechanism can make the board of supervisiors become more active to its duty, and reputation mechanism can make the independent directors perform their duties carefully. I made these suggestiongs in order to make a more peaceful environment for the market economy, to reduce the damages of the vulnerable gropes, and so as to make a healthy development for Chinese economy at last.