The Research On The System Of Shareholder’s Preemptive Right

For shareholders, Shareholder’s preemptive right protecting his stake from diluting is very important.Compared to countries outside with its mature research and application, our study of jurisprudence is less. Legislation is relatively simple. Only the "Company Law" Provision 35 and Provision 133, paragraph 4, which have been stipulated. Therefore, this paper based on the status of the company researches shareholder’s preemptive right combining the theory and practice.This paper is divided into six parts. The first part is an introduction. This part mainly discusses the background of the research and the significance of shareholder’s emptive right. To reveal the significance of Shareholder’s preemptive right for shareholders, the company, and the public.In the second part, the author analyze Shareholder’s preemptive right respectively from the definition of shareholder’s emptive right, the legal basis of shareholder’s emptive right, the functional attributes of shareholder’s emptive right etc. Firstly, the paper defines the concept of shareholder’s emptive right from the purpose of the request, the nature of the capital increase, the nature of the priority, the ratio of the subscription, the property of rights. Secondly, depending on the differences of the core values, the paper analyzes Shareholder’s preemptive right and pre-emptive rights of shareholders. Finally, from the legal basis of Shareholder’s preemptive right and the functional attributes of Shareholder’s preemptive right, the paper has a deeper theoretical research for Shareholder’s preemptive right.In the third part, firstly, the paper discusses the situation that Shareholder’s preemptive right does not apply to some special cases. The paper believes that it shall be specified by law in order to apply effectively. At the same time, the paper focuses on the tissue of exclusion of the shareholder’s emptive right. We find that China’s "Company Law" rules it simply. The law provides few restrictive conditions for us and even does not rule the formal requirements and substantive requirements of the exclusion. In practice, the provisions are not conducive to minority shareholders, which make me recommend learning from the German legislation.The fourth part is divided into two sections. The first section discusses the legislative model of Shareholder’s preemptive right of the extraterritorial States, focusing on Britain, Germany, the United States and Japan. The paper explains the legislative history and the legislative background of the shareholder’s emptive right in the countries. Then, the paper gives some legislative amendments which are based on our proposed legislative status. The second section discusses our proposed legislative status of Shareholder’s preemptive right form legislation and practice. The biggest innovation in this section lies in the study of the special problems of the shareholder’s emptive right of listed companies. It is thinked that shareholders should be given priority subscription rights at the listed IPO. For the protection of minority shareholders, it is necessary to limit the proportion of subscription. Restrictions are based on industry position, operating results, ownership structure and other aspects of companies. For the case of private placement, the paper thinks that the private placement is mainly based on special purposes, such as technology, equipment, personnel, so shareholders should not have the right. In addition, this section discusses Shareholder’s preemptive right in the judicial decision from the effectiveness of the resolution of capital increase, the exercise period and the scheduled period.In the fifth part, the paper refines the defects of our legislation, legislative remedies and other aspects and makes recommendations for improving these defects. Particularly in remedy, our legislation is basically blank. Some suggestions are based on summing up valuable legislative experience of foreign countries to protect the legitimate rights and interests of shareholders, such as a request to stop issuing new shares, requesting for compensation from the infringer, filing a lawsuit which is revoked or invalid, and commanding the malicious Subscriber to transfer Shares. The sixth part is the conclusion part which summarizes a variety of perspectives above.