Discuss On The Right Of Dividend Distribution Of Judicial Protection

It is vital for corporate governors to consider dividend distribution.However,disordered internal governance of the company results in the loss of shareholders’ rights and interests overwhelmed by multiple factors,such as capital majority and the nominalized right to information.Considering the standards of the shareholder exit mechanism in limited liability companies and the difficulty to proof damages caused to shareholders,the right to distribute dividends has become an important judicial remedy of ensuring shareholder’s rights.Provisions of the Supreme People’s Court on the Corporation Act of the People’s Republic of China,Item Four has come into effect since September 1,2017.Not only does it provide a more precise legal basis for the judicial actionability of dividend distribution rights,but it also expresses the judicial principle of careful intervention in the commercial decisions of commercial entities.Dividend distribution request rights are subject to pre-conditions by effective shareholders’ meeting resolutions.For the purpose of respecting corporate decisions,such as the shareholders’ resolution,only if the company makes an effective shareholders’ meeting resolution can the shareholders exercise the right to distribute dividends as prescribed by law.The limited protection of the rights of shareholders by law is not only because that the court can’t judicially resolve all the disputes in the world,but the court cannot objectively judge whether a business decision is correct or not.Therefore,the judicial adjudication of dividend distribution rights cases will be transformed: the judicial ideology is turning from generalized civil rights protection to the commercial philosophy of prioritizing company autonomy.