The principle of equality of shareholders is also a principle of the corporate law,and an important goal of the corporate laws in most nations. The equality ofshareholders is consisted of the nominal equality and the equality in substance, theaim of which is to make sure that all shareholders are entitled to the rights stipulatedby law. The latter is also one of the characters distinguishing the modern corporatelaw from the traditional corporate law. If in a company there exist controllingshareholders, the misuses of their controlling rights often infringe the rights of othershareholders, and thus undermine the principle of equality of shareholders. As aconsequence, the corporate laws in most nations through precedents and academictheories concentrate on the issue of conferring on the controlling shareholders thefiduciary duties towards the company and the minority shareholders as well, and thecontrolling shareholders are forbidden to acquire interests of their own only orwithout any regards to the interests of other minority shareholders. China's CompanyLaw has been implemented since 1994;there often exist controlling shareholders inChina's companies, especially in those listed companies. But as our Company Law isstructured on the notion of "the separation of ownership and management", whichmeans that companies are usually controlled by the management which does not holdmuch shares of the company, and it is usually the board of directions that infringe therights of minority shareholder, so our Company Law focuses on the regulation of theboard. But the research by economists on the share structures of modern companiesshow that "the separation of ownership and management" is not a commonphenomenon, companies are mainly controlled by controlling shareholders, and theregulation of the abuse of controlling rights shall be the focus of corporate law.Conferring on the controlling shareholders the fiduciary duties towards theminority shareholders may, to some extent, limit the freedom of management of thosecontrolling shareholders, but it does not confront with the efficiency principle. In fact,the fiduciary duties of controlling shareholders are not against all selfish conducts ofthe controlling shareholders, but only those transactions of transferring the interests ofall shareholders to their own through the abuse of controlling right, and this willpromote the efficiency principle in the end. Such transactions mentioned in thisdissertation as interests-conflicting transaction, freeze-out transaction, and the sales ofcontrol transaction can be categorized in this line. On one hand these transactions arenot prohibited by the law, and on the other hand the controlling shareholders areobliged to protect the minority shareholders. Due to the characters of limited liabilitycompanies, the minority shareholders are often exposed to the infringement by thecontrolling shareholders, and need special protection.
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