Limited Liability Company Shareholders’ Right To Know

Gradual separation of ownership and management is a major trend in thecompany’s development,It will cause that a lot of shareholders are not directlyinvolved in the daily management of the company,instead,the management of thecompany will be handed over to a professional management staff.Due to the vitalinterests of the company’s operating status and shareholders areinseparable,shareholders need to understand the company’s overall business needs,financial position, the due diligence of company executives and otherinformation,such a separation of ownership and management model will inevitablycause that shareholders suffer the disadvantage of information in corporatemanagement.In order to prevent the investment interests of shareholders are violated,and to ensure that shareholders can play a supervisory role in the company’soperation,shareholders need a way to get relevant information of the company,theright to know can ensure that shareholders can understand enough about coreinformations of corporate management and financial conditions.This article takes thecase of Shujun Li as a starting point,discussing the issues related to the system ofshareholders’ right to know.In the first part,the author introduces the basic merits of the case, and summed upthe three controversial focus of the case:1、The legal range of shareholders’ right toknow;2、Whether the purpose of the four shareholders to inspect the accounting booksis legitimate;3、 Whether the pre-procedural requirements in <Company Law> is alegal front element for shareholders to bring a lawsuit.The author analyzes the three controversial focus of the case in the second part.For the legal range of shareholders’ right to know,the author first analyzes thebasic properties the right to know should have as a kind of shareholders’ rights, andexpounds the existence value of the right to know from the perspective of thecompany contract theory.Through the research of basic properties and existence valueof the right to know, the legislative intent is defined,and then the author discusses therange of shareholders’ right to know,including whether it’s allowed to inspect originalcertificates of accounting books and whether the shareholders’ right to know should be subject to statute of limitations.For whether the purpose of the four shareholders to inspect the accounting booksis legitimate,author first analyzes the existence value of the principle of “legitimatepurpose”, Next, through the introduction of relevant laws and regulations of foreigncountries with author’s own analysis,the author proposes a criterion of legitimatepurpose.For proof problems that often occur in judicial practice, the author alsoproposes some suggestions.In the end,for whether the pre-procedural requirements in <Company Law> is alegal front element for shareholders to bring a lawsuit,the author takes the legislativetent of the pre-procedure as a starting point,through the research of legislativeintent,offering some insights of specific mode of operation in judicial practice.In the third part,the author clearly stated the conclusion of the research aboutquestions that often occurs in judicial practice.In the fourth part,the author summarized the views of this article.