China's Listed Dividend Distribution Legal Problems Research

At present, a strong momentum has been witnessed in China's stock market, from which numerous listed companies have gathered capital through the issue of stocks. In this way, the problem of fund shortage is alleviated and the capital is invested in operations and management to generate more profits. Nevertheless, are these newly-generated profits spent on production expansion or distributed to shareholders as dividends? This is a major subject in the research of Modern Company Law, as well as an essential part of the three core activities involved in the money-management of listed companies.There are a number of factors contributing to the distribution of dividends. In the legal aspects, the factors include the restrictions of laws, the company's equity structure, corporate governance structure, regulatory mechanism, and taxation system. Moreover, the forms in which the dividends are distributed are diverse, too, including cash dividends, stock dividends, bond dividends, and other property rights. The ways and amounts a listed company chooses to distribute dividends can send different messages to investors and have different effects on their rights.The current distribution of dividends in listed companies is characterized by: typical lack of distribution, multiple forms, and low rate of cash payment, irregularity, instability and inconsistency in policies. This current situation is attributable to: law deficiencies, unreasonable equity structure, unsound regulatory mechanism and deficient taxation system.With perfected legal system concerning listed companies'dividend distribution, the stock markets in the USA, Germany and Japan are relatively more matured. Despite differences in national conditions, legal traditions and cultural backgrounds, the above three countries share many similarities in regulating the distribution of dividends in listed companies. Lessons from their experiences are of great significance to the improvement of dividend-distributing system in China.Therefore, the further improvement of dividend-distributing system in China should be based on the national conditions and reality of the country, coupled with the useful lessons from the dividend-distributing systems of foreign stock markets.