Research On The Application Of Mandatory Dividend Distribution Rules In Limited Liability Companies

For shareholders,the most important purpose of investment is to receive dividends,but the limited liability company because of its inherent closed defects,resulting in the small and medium shareholders’ right to dividend distribution is vulnerable to the abuse of shareholders’ rights,especially as a right to expect the abstract dividend distribution request is more difficult to obtain effective relief.Thus,China’s mandatory dividend distribution rules based on the "company law judicial interpretation of article 15" to build,its purpose is to give the abstract dividend distribution claim when the abusive shareholder behavior caused by shareholders’ interests,in order to provide the corresponding relief for the damaged shareholders.However,due to the short history of the construction of the rules,the theoretical controversy and practical obstacles are not optimistic.For one thing,the controversy of the academic community mainly focuses on whether judicial intervention in corporate autonomy,opponents of business judgment theory based on the judicial intervention should maintain a restrained attitude.However,proponents realize that there is a risk of abuse of corporate autonomy and judicial intervention should be broadened,which extends to the discussion of the conditions of intervention and how courts choose the path of adjudication and other judicial application.However,it is a pity that the controversy does not propose a set of effective solutions to the defects of the rules of mandatory dividend distribution.Second,the practical obstacles are reflected in the weak operability of the rule.Specifically,by combing the existing cases found that,first of all,because of the rules of the conditions of application of the judgment standard is unclear,resulting in the actual scope of action is too narrow.Secondly,the plaintiff bears an excessive burden of proof.Finally,in the way of dividend distribution,the court usually applies the formula to decide the amount of dividends that should be paid by the company,the reasonableness of which is still doubtful,and the specific amount of distribution is difficult to identify.The introduction of the Judicial Interpretation of the Company Law(IV)has solved some of the obstacles,but the vagueness of its provisions has led to more heated debates.On the one hand,the legislation itself does not clearly define the abuse of shareholders’ rights,which makes it difficult to open the rule of mandatory dividend distribution.On the other hand,there are still loopholes in the relevant supporting legislation,which makes the path to the realization of the rule unclear.In addition,the application of the mandatory dividend rule is further hindered by the "stereotypical" notion that other remedies are still available.In essence,the discussion of the mandatory dividend distribution lawsuit is essentially a value judgment on whether the judiciary can intervene in corporate autonomy and the degree of intervention,and the judiciary’s overly restrained and conservative attitude lies in its excessive respect for the rules of business judgment and corporate autonomy.In fact,the analysis of this paper reveals that corporate autonomy is limited and other remedies do not really work.Compared with other systems,mandatory dividend distribution rules have unique institutional value in protecting the abstract dividend distribution request rights of minority shareholders,correcting the defects of corporate autonomy and relieving the interests of minority shareholders.The principle of justice is the best boundary to prevent the unlimited expansion of corporate autonomy,and plays a role of checks and balances on corporate autonomy.However,judicial intervention should also aim at the principle of balance of interests,taking into account the interests of multiple parties and maintaining judicial modesty.Therefore,this paper argues that the principle of justice should be introduced as the theoretical basis to deepen the degree of judicial intervention and broaden the application of the rule of compulsory dividend distribution,while maintaining a reasonable degree of judicial intervention with a balance of interests as the boundary.Specifically,this paper proposes that the principle of unfair prejudice should be used as the theoretical basis to typify the typical situations of "abuse of shareholders’ rights" and achieve the effect of uniformity in the application of the elements.In the rules of proof,the burden of proof should be appropriately tilted to the defendant,while strengthening the right to information of small and medium shareholders.In the specific way of adjudication of this rule,the company should be ruled to make a dividend distribution resolution with additional restrictions,and the specific amount of distribution should be determined based on the audit report of professional institutions.