The Research Of The Scope And Infringement Of The Defendants Of The Shareholder's Representative Action

The defendants of Shareholder's representative action include directors, supervisors and senior management personnel and others. When the directors, senior management and other personnel violate the duty of loyalty and the duty of care, the interests of the company and the small shareholders may be damaged. At this time , if the company decides not to suit rely on the decision of the board of directors, the minority shareholders can proceed against the directors for the company's interests. The basic reason that the directors and so on become the defendants of the shareholder's representative action is breach of duty of loyalty and duty of care. The paper analysis the reasons, and take care of some special conditions. During the Shareholder's Representative Action, some directors who conduct business activities in good faith are also sued, then their economic interests will be damaged. The compensation for litigation expense can effectively compensate for the directors'losses of litigation expense. This article researches into the scope, infringement of the defendants of the shareholder's representative and the D&O indemnification, to analyze and research the issues related to the defendants of the shareholder's representative article. This article includes two parts that are the introduction and the text, and the main body is divided into three parts:The first part introduces the basic concept of the defendants of the shareholder's representative action, analysis and identifies the extent of the defendants. And it also analysis and ascertains the scope of the"others"under the circumstance of our country, through comparing the lawsuit of the foreign countries.The second section of the article analysis the infringements of the defendants of the shareholder's representative action, which is why the directors and senior management suited. It is because that the directors and managements violate their duty of care and loyalty. The infringements of the controlling shareholders are individually discussed as a specially situation. And the closed corporation is also analyzed because some directors and shareholders are the same persons who makes the suit a little different from the public corporations, and the some infringements of the directors and minor shareholders are both the reason of shareholder's representative action and the reason of shareholder's direct action, so the article importantly analysis this question.The last part analyzed the directors and officers indemnification who are the defendants in shareholder's representative action. When the directors win the suit, that means the court judges the directors needn't burden the responsibility, the corporation will compensate the directors. Under some circumstance, even when the directors fail, the corporation still can compensate the directors. The compensation for litigation expenses is good at stabling the mood of directors who faces the shareholder's representative action and helping them making normal commercial decisions under suit risks and trying hard to win the best benefits of the company, so that the company can work well.