The Legitimate Exercise Of Corporate Control For The Controlling Shareholder

The corporate control rights arise from the corporate ownership. In fact it is a form of interests, inflecting the conflict of shareholders associated with corporation. In China, the corporate is based on capitals, it is an organization in order to earn profits. The controlling shareholders own more shares than other shareholders, on the one hand, he can control General Meeting by virtue of holding most of the shares; on the other hand, he can control the operation of the corporation by electing and appointing the directors and the supervisors. Majority Voting rule offers the controlling shareholders a path to the exercise of the corporate control rights. The rule connects the amount of the number of investors with the degree of the control over the company. It will attract more investors and promote the company's scale.The article is on the basis of recognizing the legitimacy of the controlling shareholder, for the disadvantage, we can conclude the legitimate standards as follows: to protect the legal rights of the company and the shareholders. The corporate control rights itself has legitimate interests such as controlling their own property and other derivative interests. The controlling shareholders ensure the balance of the interests to achieve the company's long-term development. The author will pay most attention to the controlling shareholders and the legitimate exercise of the corporate control rights, highlighting the positive value of the corporate control rights. On the basis of the fact of the corporate in China, the author consults the foreign legislation and theory in order to put forward my own idea from the feasibility to the practice.The article which is divided into three parts can be described as follows:Chapter one describes the theoretical basis of the legitimate exercise of the corporate control rights. Firstly, it is necessary to discuss the concept of controlling shareholders. Secondly, we should differ the standard of the corporate control rights from the operate rights. Thirdly, elaborating the reason that the controlling shareholders exercise corporate control rights. At last, we can analysis the advantages and disadvantages of the exercise of the corporate control rights for the controlling shareholders.Chapter two focuses on the standard of the legitimate exercise of the corporate control rights. And the standard of the exercise of legitimate is to protect the rights of the corporate and the shareholders in order to promote the development of the corporate. At last, we offer the theoretical basis to the conclusion.Chapter three is that the controlling shareholder should obey the fiduciary duty. First of all, we introduce the necessity for the controlling shareholder to obey the fiduciary duty. Secondly, the content of the fiduciary is special, the author will pay more attention to the duty of loyalty. At last, it is important to require the controlling shareholder to obey the fiduciary duty.Chapter four states that controlling shareholders should abide by laws and systems strictly. This chapter intends to discuss from the two main action of the controlling shareholder as a point of view—related party transactions and acquisition,we devote to refining its meaning, limiting the rights of controlling shareholders and maintaining the company's legal rights.Finally, the original intention of the article is base on the approval of the legitimate exercise for the controlling shareholders to analyze and ponder the phenomenon of the abuse of power. In the existing legal mechanism, we hope to promote legitimate exercise of corporate control rights by stressing the legitimate exercise of the corporate controlling rights in order to bring down the cost and risk.