Study On Application Of Shareholder's Derivative Action In Liquidation Procedure Of A Company

It is undoubtedly that the company is an important civil subject in modern society. As a subject of civil right, the company also has life cycle: when it is established, the company's life begin; when it is terminate, the company's life end. The termination of a company needs to go through a series of actions and procedures. It is known as dissolution and liquidation.After dissolution, the company goes into liquidation procedure. In the liquidation procedure, it shall stop all business activities, except for matters related to the liquidation. The company completely controlled by the liquidation group in this procedure. The liquidation group deals with domestic affairs, represents company in various civil activities and litigation activities. It owns extensive powers. If something had happened that the liquidation team members damage the right of company, creditors or shareholders of the company shall take measures to stop this action. However, this internal control rule fails to function in two kinds of circumstance. The one is, when the company is controlled by the liquidation group, the liquidation group is likely indulging its members. Another circumstance is when liquidation group member damage the interest of the company collectively. It is impossible for the liquidation group to take action. In accordance with the stipulation of Company Law and theory of law, creditors and the company may sue directly the members of the liquidation group who misconduct proceedings and ask the liquidation group member to hold responsibility, which has no legal obstacles. But according to the principle of company law that a company has legal personality, it is not realistic that the shareholder asks the liquidation group to hold responsibilities.Therefore, Some Issues about the Application of the Company Law of the People's Republic of China (II) embody the shareholder's derivative action which stipulates that shareholder who satisfied certain conditions may ask, on behalf of the company, liquidation group member who perform misconduct to take responsibility. This article will discuss this problem.This article is divided into three chapters. The first chapter analyzes the foundation of legal theory based on the statement of status, power, obligations and other issues of the liquidation group. Then it analyzes specifically the limitations of the mechanism on the basic of analyzing of applicability of this mechanism in the Company Law. Then the article demonstrates the necessity and feasibility by introducing a new system, shareholder's derivation action, as a mechanism of improper implementation of the act of the liquidation group members.The second chapter points out the reference of the shareholder's derivation action in liquidation procedure based on the analysis of its function. Then the article analysis the defect of the shareholder's derivation action of China based on the introduction of rule of shareholder's derivative action system of China. A new use method of shareholder's derivative action in liquidation procedure will be submitted at the end of this chapter.The content of Chapter three is the specific analyzing of the feasibility and rebuilt of shareholder derivative litigation in the company's non-bankruptcy liquidation by the legal analysis methods and ways of thinking.Through the above analysis, this article concludes: in different countries and different historical development stage, shareholder derivative litigation has different objectives. Judicial interpretation introduces the system as a balance of power of liquidation team and avoids the traditional rules of company law. The independence of company's personal, and entitles the right for shareholders to pursue liquidation group members for the responsibility. As the shareholder becoming a subject of asking liability of compensation, it is positive to urge the liquidation group to perform its functions and powers, ensure the smooth progress of the liquidation, guide the company out of the market orderly, and establish a healthy and orderly market exiting mechanism.