Research On The Rules Of Exclusion Of Shareholders’ Voting Rights In Limited Liability Companies

In limited liability companies,the principal main contradiction in corporate governance is mainly between controlling shareholders and minority shareholders.It is often seen that controlling shareholders abuse their rights to bring damage to the interests of the corporate and minority shareholders.In order to protect legitimate rights and interests of small and medium-sized investors,the voting rights of controlling shareholders must be limited.Their voting rights should be exclued when they become interested party in matters pending at the shareholders’ meeting.However,in China the current regulations for the exclusion system of shareholder’s voting rights in limited companies are incomplete.They allow controlling shareholders or actual controllers to circumvent the exclusion system.This makes it difficult for minority shareholders to seek relief by making use of the system.This thesis reviews the judicial dilemma of the voting excluding system in limited liability companies,and further explores the applicable standards and ideas of structuring such system.Chapter Ⅰ examines the current judicial practice through case study,analyzes it from different aspects including litigation claims,shareholding proportions of interested shareholders,extracts and preliminarily classifies the circumstances which triggered the voting exclusion system in each case.The anaylsis reveals that the scope of application of the shareholder voting exclusion rule in limited companies is very limied,and the rules applied in the judicial proceedings are not consistent.The last section summaries judicial application issues based on the data and origns of these issues.Chapter II analyzes the base of practical demands.On one hand,from the demand-side and based on the preliminary classification in Charpter I,the thesis analyzes the legal principles and commercial practice,the background and rationality of each voting exclusion case in dispute..On the other hand,from the suppl-side,based on reality,the thesis examines the possible substitutive effects of constitutional autonomy and other rules of Company Law of PRC,and rigorously demonstrates the need to improve the voting exclusion rules at the legislative level.Chapter Ⅲ presents a theoretical review of the shareholder voting exclusion rule.Firstly,it analyzes the legal features of shareholders’ meeting resolutions and voting rights,pointing out that shareholders’ voting rights are not inalienable "inherent rights",nor are they unable to be restricted simply because of the nature of the common interest rights.As such,it is theoretically feasible to apply the exclusion rule.Then,it introduces two common objections to the voting exclusion rule and makes responses to such.Finally,it focuses on the legitimacy of the shareholder voting exclusion rule from the perspective of overcoming the alienation of capital majority decisions,controlling shareholders’ fiduciary obligations,and reducing corporate agency costs,thus provides a solid theoretical basis for improving the rule.Based on the analysis above,Chapter IV puts forward detailed suggestions from the legislative style,scope of application,operating procedures,legal consequences,and remedies,attempting to make a modest contribution to the construction of shareholder voting exclusion rules in limited companies that are consistent with China’s national conditions and will practically restrict the abuse of rights by controlling shareholders.