Research On The Legal Regulation Of Cross-shareholding Among Companies

Cross-shareholdings,as a “double-edged sword”,can help companies resist hostile acquisitions,stabilize the equity structure and reduce transaction risks.At the same time,it is extremely easy to cause many negative effects on the interests of creditors and shareholders.First of all,the capital inflated caused by cross-shareholding will cause serious threat to the realization of creditor’s rights;Secondly,the operator’s internal control caused by cross-shareholdings is actually an arrogation of shareholders’ rights,which is the fundamental reason for the alienation of corporate governance structure.Finally,large shareholders often use cross-shareholdings to trigger ultimate owner control with a small amount of capital,causing damage to the interests of minority shareholders.Unfortunately,with the current practice of cross-shareholding between companies becoming more and more normal,the Company Law of our country has so far failed to give any direct response to its negative impact,which is one of the major loopholes in our legislation.Therefore,this paper will start from the perspective of the corporate principal-agent mechanism,and comprehensively analyze the various negative impacts of cross-shareholdings among companies,and by referring to the mature legal regulation model and legal provisions in other countries,put forward effective legislative suggestions for the improvement of the legal regulation of cross-shareholdings in our country.Specifically,on the premise of adopting German and Japanese “differential treatment model”,this article will,on the one hand,adopt a legislative attitude of prohibition in principle and limitation of rights exceptionally towards cross-shareholdings between parent and subsidiary companies;on the other hand,it adopts a relatively loose legislative attitude towards cross-shareholdings between non-parent and non-subsidiary companies,That is,on the basis of allowing the existence of such cross-shareholdings,the occurrence of negative effects of cross-shareholdings can be restrained through reasonable prior restrictive measures.In a word,we should not only strengthen the information disclosure from the perspective of protecting the interests of creditors,from the perspective of protecting the interests of shareholders,it is also necessary to reasonably limit the exercise of shareholders’ rights after cross-shareholding among companies.In addition,for all types of companies,the introduction of Authorized Capital System,the improvement of internal supervision mechanism of the company and the establishment of legal consequences of illegal cross-shareholdings are also crucial to prevent the formation of the malpractice of cross-shareholdings.