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The Restrictions On Majority Shareholders' Voting Rights

Posted on:2004-07-11Degree:MasterType:Thesis
Country:ChinaCandidate:P B ZhouFull Text:PDF
GTID:2156360122485204Subject:Law
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As more and more listed companies transforms its management style from shareholders' meeting orientation to board of directors orientation, it is essential to set up a rational and effective mechanism to protect shareholders' rights and prevent the excessive use of the power of board of directors. Only in this way can the company ensure the mass shareholders' enthusiasm in further investment and develop healthily and steadily. Moreover, with regards to the rationality in law, such mechanism will also strike a balance between the benefits of majority shareholders and minority shareholders and reflect the fair and just spirit of the law. Voting right is the core of shareholders' rights. It is through exercising the right to vote that shareholders realize their participation in the company's management, thus realize their interests and benefits in the company. Therefore, the perfection of the voting system is of great importance to the corporate management and structure. The author of this dissertation explores ways to restrict the majority shareholders' voting right so as to protect minority stockholder's interests. The INTRODUCTION explains the concept and nature of voting right, emphasizing its importance in decision making process of the company. Principle of equality is its guiding principle, and reflects the equality of shares. Shareholders exercise the right to vote according to the most principle of capital, it is also the rule for shareholders' meeting and indicates the democracy based on equality of the shares. However, this rule has been maliciously abused by majority shareholders, and the interests of minority shareholders have been jeopardized. It is the urgent task of legislators to formulate new laws and rules to restrict majority shareholders and protect minority shareholders' interests.CHAPTER 2 studies four situations in which voting right of the majority shareholders is limited directly. Firstly, limit the right to vote through legislation; Secondly, restrict the voting right of the company's reserved shares, shares obtained from parent company, and cross-holding shares between independent companies; Thirdly, exclude the voting right; Fourthly, use voting right to constraint contract. The author refers to the legislation in western countries, analyzes these four situations, and put forward his own suggestion to establish new mechanism. Accumulative voting system originated in the U.S., and has been adopted widely by many countries. Focusing on case study, the author reviews its application in limiting the voting right of majority stockholders, and points out the advantages and disadvantages of accumulative voting. The author believes the government should legislate to permit the companies to set up accumulative voting system in order to fully ensure the democracy of enterprise's decision-making process and balance the interests between the majority shareholders and the minority shareholders.The author observes the agency and trust system of voting in foreign countries, analyzes the similarities and differences, and a series of problems concerning with agency and trust system in China. Vote in writing can solve the problem if the shareholder can't attend the shareholders' meeting in person, and can remedy the defect of agency system. It also enables more shareholders to participate in shareholder's meeting, and thus fully reflects the will of mass shareholders. But there are also drawbacks. The author studies similar cases in foreign countries and verifies the legislation and operation of voting in writing in China. Voting via Internet is also discussed in the dissertation. It is a supplement to the existing system. Since there is inadequate study of voting via the net, the author sincerely hopes this dissertation will play a role of a "brick" to attract "jade".
Keywords/Search Tags:Shareholders'
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