Restriction On The Rights Of Shareholders With Defective Capital Contribution

Capital contribution is the shareholders'basic obligation to company, shareholders shall make full payment for the capital contribution it has subscribed to according to the article of association. The capital of the company comprised of capital contribution is the premise for the company to obtain the status of a legal person and conduct business operation. However, all forms of defective capital contribution of shareholders always occur in practice, which not only severely harm the enriching principle of capital, the interests of other shareholders and the company, but also increase the market risk, affect the security of transactions, and harm the interests of the corporate creditors.If the capital contribution of a shareholder is defective, he can have shareholder status and shareholder rights or not. If he can have shareholder rights, these rights shall be restricted or not. These questions are always the controversial issues because of the lack of direct regulations in the Company Law of PRC. On the basis of systematically describing the rights of shareholder theory, this article takes the status of shareholders with defective capital contribution as entry point and analyzes the relationship between shareholder status, rights and capital contribution, points out that it is necessary to conduct restriction on the rights of shareholders with defective capital contribution. Furthermore, this article systematically analyzes the restriction on the rights of shareholders with defective capital contribution, base of which puts forward restriction principles-based standard and approaches, and suggestions on how to improve the restriction on the rights of shareholders with defective capital contribution in China. In addition to Introduction and Conclusion, the body of this article consists of four chapters, The basic contents of each chapter are as follows: Chapter I systematically describes the rights of shareholder theory. The rights of shareholder are combinative rights enjoyed by shareholders with qualifications, which are special member rights. The rights of shareholder include the right of obtaining capital assets, the right of participating in corporate operation management, the right to know, etc. The foundation of the rights of shareholder should be lay on acquirement of the shareholder status.Chapter II analyzes the effects of shareholder status and rights caused by defective capital contribution. The violation of obligation of capital contribution of shareholder should be deemed as defective capital contribution. There is not inevitable corresponding relationship between acquirement of the shareholder status and actual capital contribution, and people with defective capital contribution can have shareholder status. Although the shareholder status is the basis of the production of the rights of shareholders, acquirement of shareholder status do not mean integrated rights of shareholders. If the capital contribution of a shareholder is defective, his rights of shareholders should be restricted relevantly.Chapter III deeply analyzes the restriction on the rights of shareholders with defective capital contribution. The legitimacy of the restriction on the rights of shareholders with defective capital contribution can be explained by corporate contract theory, the principle of equality of shareholders, equity and justice concept, the principle of good faith, and the principle of achieving the balance of interests. The proportional shareholder rights of shareholders with defective capital contribution should be restricted relevantly and performed according to actual capital contribution, while the non-proportional capital contribution should not be restricted. The approaches of the restriction on the rights of shareholders with defective capital contribution include law, judicial interpretation, article of association and resolution of the shareholders'meeting.Chapter IV puts forward some suggestions on how to improve the restriction on the rights of shareholders with defective capital contribution in china. There are some flaws in the restriction on the rights of shareholders with defective capital contribution in both legislation and judicial practice in China. We should clarify restriction standard and approaches more definitely, base of which make further improvement on the restriction on the rights of shareholders with defective capital contribution in China.