Research On The Legal System Of Protecting The Rights And Interests Of Minority Shareholders In China’s Limited Liability Companies

Limited liability companies are one of the legal types of companies in China,meanwhile,it also has the largest number in this country,accounting for 98%.The existence and development of a limited liability company cannot be separated from two major resources,namely human and financial resources.What the key contribution to set up a limited liability company is the amount of the shareholders’ investment,namely,a company’s establishment can’t without capital.In a LLC,shareholders bear limited liability rather than the full responsibility.There is a relatively close relationship between shareholders,which is characterized by human cooperation,and is often linked by mutual trust between shareholders.Therefore,a limited liability company is a unity of human cooperation and capital cooperation.Shareholders,as contributors,enjoy the rights which legally confirmed by the China’s current Company Law and other legislative documents,but these rights will also be differentiated between large and small shareholders due to the number of "shares" held by shareholders,that is,the different share holdings lead to the different status of shareholders.Large shareholders are shareholders with a large share of shares,and their influence will be like a "snowball" with scale effect,while small and medium-sized shareholders are difficult to form a certain influence within the company due to their small share and relatively weak and scattered power.When there are conflicts between large and small shareholders,the disadvantages of small and medium-sized shareholders will be highlighted,and there are numerous cases that large shareholders taking advantages of their own stock equity to do harm to the other small shareholders.The reason why legal exists is that it aims at pursuing equity.From this perspective,the law gives equal rights to all shareholders,no matter with how much stock you have,who you really are.All of shareholders shall be protected equally by law and no one can infringe their legally interests by using illegal way.In practice,the fact that the rights and interests of small and medium-sized shareholders,which confirmed by relative law,have been infringed by large shareholders has prompted theorists and judicial practitioners to pay attention to the legal protection of the rights and interests of small and medium-sized shareholders.Although we try so hard to revise the Company Law,and the importance of protecting the small-sized shareholders has been paid more attention by the law,there is still room for improvement.This thesis are mainly figuring out this following questions: The first chapter is focusing on the basic knowledge of this paper,providing an new angle of view to analyse the reason why we should protect the underprivileged stockholders’ benefits.In this part,the different characteristics of different types of companies are be compared.This part also discusses the evolution of the definition standards of major shareholders,small and medium shareholders.Besides,what rights shareholders may have also been classified.To protect the disadvantaged shareholders is to meet the need of the principle of equity,it is the indispensable requirements of the modern company system,as well.The second chapter focuses on the reality.By analyzing the current states,we can find what difficulties small shareholders are facing.furthermore,we can clearly find out what makes this happen.Disadvantaged shareholders are vulnerable to discrimination and infringement by companies or major shareholders in the right to know,to vote and to share dividends.This is because minority shareholders are in a weak position and there are loopholes in the law,which exacerbates these phenomena.The third chapter summarizes what the measures that other countries(regions) taken to protect the small stockholders in the aspect of their rights and interests.These experience are mainly from European and American,Japan,Chinese Taiwan and Chinese Hong Kong are also included.The legal systems and continental legal systems of these countries(regions) are relatively developed and perfect.The fourth chapter provides some suggestions on how to protect minority shareholders’ rights legally.And these suggestions take the actually situation in China into consideration,and also influenced by the experience of other countries(regions).