On The System Construction Of Double Shareholder Representative Litigation

Shareholder representative litigation is a system designed in the plane company structure to protect the legitimate rights and interests of the company and its shareholders,which is not applicable under the framework of the parent-subsidiary company.With the development of commodity economy,the management mode of parent-subsidiary company is becoming more and more popular,and the special relationship between parent-subsidiary company and subsidiary company makes the protection of subsidiary company urgent under the framework of parent-subsidiary company.In the parent-subsidiary structure,if the controlling shareholder of the parent company misuses the control right to harm the interests of the subsidiary,based on the control,it can also prevent the subsidiary and the parent company from filing a lawsuit,so that the rights and interests of the subsidiary will not be protected.Therefore,it is necessary to introduce dual shareholder representative litigation which can effectively solve this problem.However,the dual representative lawsuit is after all a breakthrough of the corporate personality and judicial intervention of the companyautonomy.Therefore,it is necessary to balance corporate autonomy with judicial intervention through proper system design,which can not only effectively protect the legitimate rights and interests of subsidiary companies and minority shareholders of parent companies,but also minimize the interference in corporate autonomy.This article is divided into four chapters to elaborate the system construction of double shareholder representative litigation in our country.The first chapter analyzes the necessity of introducing the double shareholder representative litigation system from the angle of realistic demand and system function.Firstly,this paper analyzes the practical needs of the litigation system,including the problem of interest protection under the abuse of the control right of the parent company becomes more and more prominent under the background of the popularization of the parent-subsidiary company,and the shareholder representative litigation is difficult to apply under the framework of the parent-subsidiary company.And the lack of other means of relief.Secondly,it analyzes the function of the double shareholder representative litigation system,which plays an active role in safeguarding the interests of subsidiary companies,protecting the interests of small and medium shareholders of the parent company,and perfecting the governance structure of the parent and subsidiary companies.The second chapter expounds the theoretical basis of the construction of double shareholder representative litigation.Firstly,the supporting theory of this system is introduced.According to the different theories of Continental law system and Anglo-American Legal System,there are two theories of appointment relationship(Continental law system)and trust(Anglo-American Legal System).The theory of appointment relationship regards the shareholders of parent company as the substantive appointees of the directors of the subsidiary,while the theory of trust regards the parent company as the fiduciary of the subsidiary.In addition,there are piercing corporate veil theory and agency theory.The former regards the parent-subsidiary as an integrated enterprise,while the latter proves the rationality of the system from the point of view that the subsidiary is the agent of the parentcompany.The theory of co-control also provides a theoretical basis for the litigation,according to which,if the parent company and the subsidiary company are controlled by the common controller,if the controller has caused harm to the interests of the subsidiary,then parent shareholders will be the only ones who can defend their rights.These theories provide theoretical basis for double representative litigation.Secondly,it analyzes the reasons for opposing the system of double representative litigation,such as: the existence of alternative relief means,which may bring negative effects,may lead to multiple representative litigation,and so on.However,the shareholders representative action against the non-prosecution decision of the parent company ignores the interests of the subsidiary and the subsidiary creditors.Secondly,the damage of parent company is difficult to prove.In addition,the double representative litigation system is a safeguard mechanism under the condition that the existing system can not be remedied.It should not excessively enlarge the negative effect of the double representative litigation system on the interference of company autonomy,and it can prevent these possible hidden dangers through the system design.Finally,according to the principle of system,the recognition of double shareholder representative litigation means to a large extent the recognition of multi-shareholder representative litigation,but can not draw a conclusion that double representative litigation should not be introduced.In view of the development trend of parent-subsidiary company and enterprise group,in order to protect the interests of stakeholders and standardize the internal governance of enterprise group,it is necessary to introduce this system.The third part expounds the subject system of double shareholder representative litigation.The first is plaintiff qualification restrictions.The ratio of parent company to subsidiary shares will affect the degree of damage suffered by parent company shareholders because of transmission,and then affect the parent company shareholders’ willingness to file litigation.In addition,it is also related to the existence of other means of relief.What’s more,from the point of view of preventing abuse,it is also necessary to limit the proportion of shares held by the parent company.On the basis of comparative analysis of the advantages and disadvantages of substantive holding,absolute holding,full holding,and wholly-owned holding,the author suggests that China should adopt the full holding standard.In addition,in the term of holding shares,the analysis points out that the parent company has no requirement for the holding period of the subsidiary,and the holding period of the parent company to the parent company should be satisfied: the parent company is a limited liability company,and there is no limitation on the duration of holding shares;If the parent company is a joint stock limited company,it shall satisfy the requirement of holding shares for more than 180 days.In terms of shareholding ratio,considering the problem of institutional convergence,the paper proposes that If the parent company is a limited liability company,the shareholders of the parent company have no shareholding proportion requirements;if the parent company is a joint stock limited company,the shareholders of the parent company shall meet the requirements of not less than 1% of the total held by the parent company.Secondly,this paper analyzes the scope of the defendant.First,there should be no significant limitation on the subsidiary,because the dual-representation litigation is the relief way to the subsidiary,the importance of the subsidiary is not related to whether the right of the subsidiary is to be relief from the wrongful act,And the shareholders of the parent company will be affected by the damage of the interests of the subsidiaries.Secondly,the scope of "other persons" shall include any person who,other than the directors,supervisors and senior managers of the subsidiary,causes loss to the subsidiary of its legitimate rights and interests,including the actual controller of the subsidiary(such as the controlling shareholder and the actual controller of the parent company,except the parent company),and the third party without the actual control of the company.The fourth chapter expounds the advance request program of the double shareholders representative litigation.Based on the principle of derivation of the plaintiff’s qualification and the principle of exhaustion of internal remedy,the claim of the shareholders of the parent company is inferior to the right of appeal of the subsidiary and the right of the parent company.The filing of the shareholder’s lawsuitof the parent company must exhaust the relief route.Only if the parent company and the subsidiary company do not sue,the parent company shareholders can bring the double representative action,therefore,the advance request program is necessary.In terms of the specific procedure setup,by comparing the request to both two companies,to the subsidiary company,and to the subsidiary company to inform the parent company at the same time,and comprehensively considering the time cost and the inherent logic of the system,the connection with the existing system,the author suggests that the mode of simultaneous mention should be adopted,and that the shareholders of the parent company should attach the content of their request to the subsidiary company at the same time when requesting from the parent company.Proof that the obligation to claim has been fulfilled at the time of filing a single representative action as the parent company.