Theoretical Study On Shareholders' Information Right From The Contract Perspective

In a modern company, since the ownership and management are separated, most of the shareholders do not directly participate in the management of the company, and the daily operation and decision-making powers are mostly delegated to the board of directors and managers. As a result, in the aspect of company control and company decision making, most of the shareholders are usually kept in a weaker position with asymmetric information access, which leads to poor protection of the shareholders'rights. Normally, since the shareholders are kept away from the company, the company may turn out to them a huge"black box"if there are no provisions requiring the managers to provide due management information. To avoid infringement on the shareholders'rights, the game rules are set to create the rights to intervene in the company affairs for the shareholders, such as shareholders'right to vote in the shareholders'meetings, the right to vote, and the right to participate in the management. The precondition for the shareholders to exercises those rights is full access to information. Therefore, information access becomes very important for realization of the shareholders'rights and interests. Further, for the shareholders, the intrinsic value of the information of the company has made the information right to gradually separate from and stand out among the shareholders'other rights, and the information right has now an independent status. But existing theoretic studies on the company-related legislation and company laws predominately start from the perspective of the company's obligations to provide such information to shareholders, and studies on shareholders'rights to get information and to exercise such rights are relatively weak. To enable the shareholders to have the information right, especially the right to get their own information so that the general legal principles can be effective implemented in the area of company law is beneficial for enhancing the shareholders'sense of rights and cultivating the private law awareness. Starting from the above understanding, this dissertation analyzes, both theoretically and pragmatically, the scope and exercise of shareholders'information right with a view to probing into the structure and core standards of human interests in companies.Chapter One Source, Value and Evolution of the Contractual"Information Right"This chapter mainly studies the public and private contents of the information right, the economic foundation and institutions of contractual information right, the intellectual sources, legal foundation and legal values of the information rights under modern contracts. Holistically, this chapter lays ground upon which the subsequent chapters develop. This dissertation believes that, due to limitation of the traditional thinking and level of socioeconomic development, the demand for the information right in the private law and the thirst for standardization thereof are different from those in the public law. The information right does exist in the private law. In the modern society where the resources are configured contractually, inter-personal activities are also carried out through contractual transactions. The legal solution to the information asymmetry brought by contractual transactions is to create and further the information right system. This chapter lists out in details and analyzes from the private law perspective the information right system born out of the contractual relationship, then it further analyzes the differences between the modern information right system for contracts and its latter-day counterpart, highlighting that the modern information right system for contracts is a result of evolution from the information disclosing obligation (as a subordinated obligation) under the contractual relationship to the information getting right, and that the institutional value of the modern information right under contracts is to protect the party weaker in information access.Chapter Two Theoretical Foundation of Company Shareholders'Information Right from the Perspective of the Contractual Relationship This chapter first introduces the theory of corporate contracts from the perspective of economics by analyzing the legal relationships between the stakeholders within a company and interpreting the legal relationships between shareholders, between shareholders and the company, and between the shareholders and the management (the directors in particular) from the perspective of contractual relationship. Now that the legal relationship between the stakeholders of the company can be analyzed from the perspective of contracts, what is the necessity of the information disclosing obligation for the stakeholders and what is the form of the said obligation? From the perspective of contracts, the shareholders'information right is a result of the application of good faith in the area of the company law and the evolution from the information disclosing obligation to the information getting right. This dissertation then analyzes the theoretical foundation of the shareholders'information right from the perspective of information asymmetry theory which in turn brings forth analysis on the attributes and values of the shareholders'information right. To avoid a too general analysis, this dissertation highlights the shareholders'information getting system, especially the shareholders'inquiry right. The main contents under this chapter include the contractual nature of the company's articles of association, and the legal relationships between the shareholders, between the shareholders and the company, and between the shareholders and the management. Then, by analyzing the asymmetry of information configurations between the shareholders, the company and the management, this dissertation elaborates on how to establish a balanced information flowing mechanism between the above stakeholders. Chapter Three Typical Shareholder Information RightSystem—Shareholders'Right of Inspection System This chapter first introduces the concept of the right of inspection and analyzes the right attributes and basic contents of the right of inspection. Then this dissertation carries out a comparative study on typical foreign systems of inquiry right, including the right to inquire books in the U.S. company law, the inspector system in the U.K. company law and the right of inspection system in Japan. To follow up, this dissertation finds the causes for different legislations on the right of inspection by analyzing the political and legal environments of different countries and different corporate governance and economic development levels. With the above finding, this dissertation analyzes and reviews the right of inspection system in today's company law of China, and believes that not all of the right of inspection systems of foreign countries can be transplanted to China, because although the analysis from the perspective of contracts offers a universal option for legislation on the right of inspection, different national conditions should be taken care of in China's relevant legislation.Chapter four elaborates in details the shareholders'inquiry right system from the perspective of contracts. It first elaborates on the suitability of analysis from this perspective, then the contents of the inter-shareholders, shareholders-company, and shareholders-management information disclosing obligations, and the non-performance of the obligation and remedies thereof. The aim of such analysis is to test the feasibility of analysis from the contractual perspective for studies on the shareholders'right of inspection system. Besides, the contractual perspective can also be used to guide the shareholders'information right legislation (inter alia the right of inspection). This dissertation proceeds at the following two levels: firstly, in the macro level and from the contractual perspective, apply the transaction cost theory in economics and the institution selection method for analyzing the basic framework for selecting the shareholders'right of inspection system and the basic standard for inquiry right legislation; secondly, in the micro level, apply the macro-level finding for reviews and suggestions to China's legislation on the shareholders'right of inspection system. This dissertation also provides some suggestion on the institutional design of the shareholders'right of inspection and on some of the key issues such as perfecting the system for keeping the company documents and records, creating the inspector information requesting system in the stock companies as well as the legislative intent for setting the scope of the inquiry right in China's company law. All in all, the significance of the contractual perspective for the legislation on shareholders inquiry right is on how to strike a balance between the autonomy of will of the participants and the compulsory legal norms.Chapter Five Process for Remedies to Shareholders Information Right Infringement(inter alia the right of inspection). For the process of providing remedies, this dissertation first theoretically analyzes the nature of the lawsuits on shareholders information right and defines such a right as a public law right. Substantively, this dissertation draws on the relationship between the right to sue and the substantive rights and lists out the several categories of substantive rights relating to the information right. On the process issue, this dissertation categorizes the information right lawsuits into single-shareholder and multi-shareholders information right lawsuits, and proposes that special process should be applied to single-shareholder information right lawsuits. After finding that, in actual economic life, the self-help remedies for the shareholders'rights are insufficient and the administrative intervention is far from satisfactory, this dissertation comprehensively surveys the handling of disputes concerning shareholders inspection right in China's legal practice and reveals some problems existing in legislation and actual judicial practice. Following the above analysis, this dissertation gives out some opinions and suggestions on the process for shareholders inspection right lawsuits in China and the basic procedural rules, such as to establish the special process for handling the single-shareholder information right disputes and the inspector information requesting procedures.