Research On The Oppression Of Shareholders In Close Corporation In America

The American companies are traditionally divided into publicly held Corporations and Close Corporations. The Close Corporations usually have a little numbers of shareholders, and shares are not published publicly and the shareholders to participate in the company management and operation.Based on the particularity of Close Corporations, there are some special problems, such as shareholders pressing problems. Because of the centralized management and the principle of majority shareholders to participate in the management and lack of liquidity of the capital and the controlling shareholders in a dominant position, the small shareholders is at a disadvantage position. Combining with the rational limitation and the nature of the pursuit of profit maximization, lead to squeeze the small shareholders. At the same time, traditional company legislation and the judicial for internal affairs usually adopt business judgment rule, if there is no conflict of interest and business decisions, business judgment rule can protect the controlling shareholders from judicial review and intervention.But because interest conflict is inevitable, squeezing behavior emerge in endlessly, and various forms. The traditional legislation has been unable to safeguard the rights and interests of small shareholders.In the face of this situation, the legislative and judicial gradually involved in the dispute of the Close Corporations in dealing with shareholder exploitation, reasonable development and fixing to small shareholders expect to judge whether there is squeezing behavior. Expanded ways of squeezing from the controlling shareholders, the traditional litigation can not resolve the dispute. Built on the basis of the dissolution of has a variety of alternative means of relief.The company law in 2005 of our country includes the shareholders squeezing problem such as the provisions for the small shareholders’ right to know, objection shareholder buyback and the judicial mandatory dissolution litigation right and other measures to protect minority shareholder rights and interests of the company,and expanding the rules of the autonomy. But because shareholders squeezing behaviour has diversity and the legal requirements in respect of company law relief afterwards is single, we want to draw lessons in the legislative and judicial experience from USA to strengthen the protection of small shareholders to meet the needs of the current public entrepreneurship and peoples innovation.