On Fiduciary Duty Of Controlling Shareholder Of Joint-stock Company

The shareholders of joint-stock company are divided into two groups: controlling shareholder and small shareholder. The controlling shareholder owns the most of the company shares, being placed in absolute or relative controlling position. As a result, when it uses its controlling power, it has the natural tendency to make a point of the self-interest, neglecting the small shareholder's benefits. When company system develops to certain extent, the phenomenon of controlling shareholder abusing the controlling power is inevitable. Because our country has its special historical background, state-owned shareholder or state-owned corporative shareholder has "only one big" position in joint-stock company. Recently, the controlling shareholder exercises the controlling power unjustly. The phenomenon of manically violating the rules to operate piles up one after another, no less to say forbidding. The reason is that the governance structure in company is distorted. At the same time, the prevention mechanism to checking and balancing the benefit conflict is lack or invalid generally in current Company Law. So, the establishment of fiduciary duty of controlling shareholder, can make the power abusing behavior of controlling shareholder to be under control effectively, can limit and rectify the abuse of the most capital decision, can protect the benefits of the small shareholder and company. This is the inevitable legislative trend in Company Law.Firstly, this paper analyzes the law definition of controlling shareholder. The general theory on fiduciary duty and fiduciary duty of controlling shareholder is introduced. Controlling shareholder of joint-stock company has direct or indirect controlling power to the management or other important things of the company, because of its more share or other reasons. Controlling shareholder bears fiduciary duty to company and small shareholder. Nowadays, Anglo-American law system and Continent law system have established the duty in their company legislation.The duty establishment has gotten very strongly theoretical foundation of law philosophy, civil law and company law. The concrete and detail contents on fiduciary duty of controlling shareholder have been analyzed: Namely, active action and passive anti-action. From positive and negative opposite, controlling shareholder should count on the benefits of the whole company kindly, cannot damage the interest of company and small shareholder making use of the controlling power. Then this paper expatiates the judging standard of controlling shareholder violating fiduciary duty, namely " business judgment rule " . According to it, the concrete ways in which the controlling shareholder breaches the duty are lined up. At last, taking aim at the reasons of controlling shareholder abusing the power, for example, reform shortage of state-owned joint-stock company, the unsound company management structure and the imperfect legislation, this paper suggests to enhance the system in which the fiduciary duty of controlling shareholder is regarded as the center: optimize ownership construction in joint-stock company, perfect joint-stock company management structure, perfect civil duty of controlling shareholder and instruct the derivative suit of shareholder etc. These measures will assure controlling shareholder to perform the duty truly.