Analysis Of The Subject Of Shareholder Double Derivative Action

Shareholder Derivative Action is one of the most important systems in legislationand theoretical study of corporation law across the world. It has been playing asignificant role of protecting and helping minority shareholders. In2005, when thecorporation law was amended, national law started to legalize Shareholder DerivativeAction system. However, it only had Article151regarding Shareholder DerivativeAction, thus brought inconvenience for judicial practice. As to Shareholder DoubleDerivative Action, the importance was confirmed in academia and practice, but thestandard was still absence in national law. In the fever of global corporation mergerand corporation reconstruction, the absence made it harder for corporate governance.When the subsidiary was damaged, the benefit of the shareholders of ParentCorporation is hard to be protected. Many problems were coming in legal practice,such as the hardness for protecting the benefit of the shareholder of ParentCorporation and the hardness for completion of Shareholders Derivative Actionsystem. Therefore, the study for Shareholder Double Derivative Action is importantand necessary. Based on normal civil procedure and Shareholder Derivative Action,this article summarized the meaning of Shareholder Double Derivative Action, andanalyzed its specialty and importance, then researched the subject and demonstratedthe essential elements of subject qualification, at last, tried to offer the profile of thesubject of Shareholder Double Derivative Action, in order to offer the thought andopinion to standardize the Shareholder Double Derivative Action in practice.This article had four chapters: Chapter1: the character of Shareholder Double Derivative Action and themeaning of subject regulation. Referring to the definition of Shareholder DoubleDerivative Action which was agreed by scholar in many countries, this article offeredthe following definition: Shareholder Double Derivative Action was, between parentand subsidiary corporation, if the member of board of parent or subsidiary corporation,senior manager, actual controller or others actually damage the benefit of subsidiarycorporation, while for some reasons, both parent and subsidiary corporation did notbring lawsuit, on behalf the benefit of subsidiary corporation, the shareholder ofparent corporation could bring lawsuit to the court, so that the subsidiary corporationcould receive compensation. By introducing the character of Shareholder DoubleDerivative Action, which was duality and correlation, this chapter stated theimportance of character of Shareholder Double Derivative Action and its subject.Furthermore, beginning from the practical lawsuit, the chapter discussed about thesystem framework of Shareholder Double Derivative Action and generally introducedthe possible process and problem of Shareholder Double Derivative Action, thenbrought the discussion of the importance of the subject of Shareholder DoubleDerivative Action, to emphasize the theme of this article, which was the subjectanalysis for Shareholder Double Derivative Action.Chapter2was the study for entity element of the plaintiff of Shareholder DoubleDerivative Action. The study was established under two circumstances. One is theplaintiff shareholder of ordinary Shareholder Double Derivative Action; the other isthe plaintiff shareholder of Shareholder Double Derivative Action in share swap. Asto the plaintiff shareholder of ordinary Shareholder Double Derivative Action, thischapter analyzed the quality request to the plaintiff shareholder from the substantialstandpoint, i.e. shareholder identity, shareholding ratio, the identification of parentand subsidiary corporation, and proposed the suggestion to the plaintiff of ordinaryShareholder Double Derivative Action, according to the quality request to the plaintiffshareholder, considering Article151of Company Law. As to the plaintiff shareholderof Shareholder Double Derivative Action in share swap, this chapter also discussedtwo different situations: one was that share swap accomplished before bringingShareholder Double Derivative Action in share swap; the other was that share swapaccomplished after bringing Shareholders Double Derivative Action in share swap.By introducing the relevant case and theoretical study, this chapter stated thesuggestion of regulation in different circumstance. Chapter3was the analysis to procedure elements of plaintiff in ShareholderDouble Derivative Action. Firstly, this chapter proved the necessity of ShareholderDouble Derivative Action and the meaning of the confirmation to its subjectqualification in three aspects. Secondly, combined the relevant rule of demandrequirement in normal Shareholder Derivative Action, this chapter proposedregulations suggestion to demand requirement in normal Shareholder DerivativeAction, and believed that two layers of demand requirement is existent and essential.Thirdly, this chapter analyzed the emergency situation of demand requirement in law,and discussed its possible condition in Shareholder Double Derivative Action. At last,as to the situation which Shareholder Double Derivative Action was brought but thedemand requirement was not satisfied, this chapter believed it did not conform to thelegal procedure elements and the court should overrule the charge, but plaintiffshareholder’s substantive right still existed.Chapter4was about the relevant problem analysis for other subject ofShareholder Double Derivative Action. It defined the scale and litigation status ofdefendant, corporation and other shareholders. Firstly the analysis for defendant came.By introducing the different definition to the defendant scale of Shareholder DoubleDerivative Action in two law systems and combining the statement of defendant scalein Shareholder Derivative Action in Company Law, this chapter analyzed the specificscale and specificity of the defendant of Shareholder Double Derivative Action fromsubject and behavior. Secondly, the corporation itself was analyzed. Due to thespecificity of Shareholder Double Derivative Action, two corporations were involved.Thus the chapter focused on the litigation status of Parent Corporation and SubsidiaryCorporation and believed that the parent corporation did not have litigation status inShareholders Double Derivative Action, while the subsidiary corporation shouldparticipate in the action as the third party without independent claims. At last, theother shareholders were talked about. Still, as the specificity of Shareholder DoubleDerivative Action, two kinds of shareholders was involved, one was the shareholderof Subsidiary Corporation but not Parent Corporation, the other was the shareholderof Parent Corporation except plaintiff shareholder. So this chapter discussed if itcould participate the lawsuit in the two conditions and draw a conclusion.