Application And Regulation Of Disgorgement

Disgorgement means that the company should enjoy the economic interests acquired by the directors, supervisors, senior officers and the shareholders holding at specific percent of the company's stocks conforming to the statutory quorum through delinquent behavior. Disgorgement is the right of formation, which does not base on the original rights and is prescribed by the law. The company can exercise the right unilaterally or through the proceedings. Disgorgement will come about with the occurrence of the economic interests which should be returned and will terminate with the dissolution of the company.This paper is divided into three parts including introduction, body, conclusion, and the body is divided into three chapters. The first chapter analyses comparatively the legislation and practice about the disgorgement in some countries and China's Taiwan region and illuminates the formation and the history of disgorgement in order to provide the jurisprudential basis for the legislation and practice of disgorgement. The second chapter illustrates the exercise of conditions of disgorgement: the legal existence of the subject of rights, illegal activities of the people within the company who has acquired interests and has subjective fault. The third chapter analyses the problems of the legislation of disgorgement. The subject and object of the disgorgement are too narrow, the procedure and the period are unclear and the stock-holders derivation litigation system is unsound. The article analyses the reasons of the problems and puts forward some sound proposals that the range of the application object of the disgorgement should be extended to all the beneficiaries, the scope of the subject of subrogation should be expanded, and the procedure and the period of the excise of disgorgement should be regulated and so on. By those we should realized the normalization of the system of disgorgement which is executable in order to provide a sound basis of legislation for the practical application of disgorgement.