Research On The Dual Shareholder Derivative Suit

The shareholder representative litigation system plays an important role in safeguarding the interests of minority shareholders.The representative litigation system should be divided into single-shareholder representative litigation and dual-shareholder representative litigation according to the different types of structure of the company,and the two systems are very different in terms of application circumstances and applicable subjects.When the interests of the subsidiary are damaged in the parent-subsidiary structure and the corresponding right holders are negligent in exercising their rights,the shareholders of the parent company file a lawsuit on behalf of a single shareholder,and the court often rejects the claim on the grounds that the subject is unqualified,and the protection of the interests of minority shareholders of the parent company faces a lack of protection.Attempts to seek other rights protection paths inside and outside the company under the parent-subsidiary structure have exposed the drawbacks of obstacles to the application of law,and it is difficult to open up the channel for the shareholders of the parent company to remedy the losses of the subsidiary.Based on this,the importance of introducing a dual shareholder representative litigation system is demonstrated,on the one hand,it can solve the dilemma of the application of the existing remedies for minority shareholders under the parent-subsidiary structure;On the other hand,it also realizes the protection of the rights and interests of minority shareholders of both subsidiaries and parent companies,and then promotes the improvement of China’s corporate governance structure and minority shareholder protection system.The theory of offsetting expectations of benefits and the theory of judicial responsibility also theoretically justify the existence of a dual representation system.Furthermore,the compensatory and deterrent functions justify the creation of a dual representation system to some extent.This is because if the subsidiary’s directors damage the interests of the subsidiary and the subsidiary is unable to obtain relief through existing channels,it will not be able to recover its ownership rights as an independent legal entity,and its independence of ownership will be lost.As a last resort,the actions of the two shareholders’ representatives would destroy the separate juridical personality of the parent and subsidiary,giving the shareholders of the parent company the right to sue,which is more appropriate.The theory of criticizing the double shareholder representative lawsuit against the independent personality of the company cannot be established.In terms of specific system design,the comparative analysis method and the combination of theory and practice are adopted to construct China’s dual shareholder representative litigation system from three aspects: application situation,litigants and pre-procedure.In terms of application,dual-shareholder representative litigation applies to parent and subsidiary companies with absolute controlling relationships.In terms of litigants,when the parent company is a limited liability company,the shareholders of the parent company can file a dual shareholder representative lawsuit as plaintiffs if they have shareholder qualifications,and when the parent company is a joint stock limited liability company,the time limit on holding shares should be removed,and the shareholders of the parent company only need to meet the requirements of holding more than 1% of the shares of the parent company individually or collectively to file a dual shareholder representative lawsuit;The scope of defendants in dual-shareholder representative actions should be limited to directors,supervisors,senior management and controlling shareholders of subsidiaries;If both parent and subsidiary companies participate in the litigation,they should be listed as third parties without independent right of claim.In terms of the preliminary procedure,before filing a dual-shareholder representative lawsuit,the shareholders of the parent company must submit written requests to the directors or supervisors of the parent company and the subsidiary respectively,and only after they are rejected can they file a lawsuit in the people’s court.