Legal Regulation On The Corporate Controlling Power

Because the legal entity of typical corporations emerged in China very lately, there are no restrictions on the shareholders and directors under the traditional commercial concepts and the practices. Our law of corporation always regulate the shareholders and directors with optional guidelines rather than mandatory rules. Which encourages the shareholders and directors to become so greedy that has caused a big crisis of the corporate governance. It has lasted a long period of time during which controlling shareholders in our companies took advantage of their privileged positions and abused their powers frequently, by suppressing the minority interest holders and making illegal profits for their own. As s result, the harmony and stability of corporate relations have been seriously damaged. The battle of corporate controlling power in GOME which made us face this problem directly, reminded us to reform or perfect the law of corporation immediately. The purpose of this paper is to analysis the corporate controlling power detail, to explore the necessity of creating legal regulations, to discuss the ways and approaches, and finally to suggest a construction on the corporate controlling power. There are four chapters in this paper.Chapter 1 deals with definition of the corporate controlling power. First it introduces the battle of corporate controlling power which took place in GOME. Secondly, it defines the meaning and nature of the power, which explains the reason why there are so many cases like GOME.Chapter 2 is on the necessity of legal regulation on the corporate controlling power. Firstly, it describes abusive uses of the corporate controlling power in civil companies, and the harm resulting from it. It is very urgent to construct legal regulation on the corporate controlling power. Then, it discusses the influences of the profit mechanism on the corporate controlling power, which includes the relationship between the corporate performance and the proper use of the power, between the shareholders'interests and the appropriate exercise of the power. At last based on the analysis of the jurisprudence underlying the corporate controlling power, it comes to the conclusion that it is necessary to construct legal regulation on the corporate controlling powers.Chapter 3 analyzes the possible ways to regulate the corporate controlling power. After a concise explanation on the relationship between the institutions which in a corporation, puts forward the ways to regulate the corporate controlling power, and the interaction among the board of shareholders, directors and supervisors.Chapter 4 suggests the construction of legal regulation on the corporate controlling power for China. It starts with a general overview of the status of the law of corporation in our country. More specific, suggestions on how to improve our law of corporation are followed. This paper aimed to provide a sufficient and reasonable support to the construction of the legal regulation on the corporate controlling power.