Mechanism Of Encouraging Stockholder's Positivity In Shareholder's Representative Action

With the modern company size expands more and more larger, the company's capital and shareholders increases rapidly.(especially in the limited liability company).The board of director centralizes the power of administration,then the proprietary rights and the domination have been set apart. The board of director is the centre of the administration, at the same time, it has the untrammelled attorneyship to the exterior and its act in excess of authority is effective. In conclusion,that is said ablve brings about a series of problems ,for example ,how to protect the right of the shareholder and the company from the dangerous,how to prevent the board of director abuse their administration. The right phase correspondence is compulsory ,the board of director's obligation must be aggravated. The system of restrain and supervisory should be strengthened in the company law .The company has personally selfhood ,when the company's interests are damaged,the company could find the methods to relive,which lead to inequity.In the modern company,the directors and a heavy stockholder and execs have the authority,so they could not institute legal proceedings.At this time the shareholders should have the right to institute legal proceedings in their own name.If the shareholder are plaintiff,the company will obtain the interest by the proceeding.Shareholder representative action will deny the company's personally selfhood and the amount of capital invested in order to restrict the administration.Actuality the directors and a heavy stockholder and execs will do the indeed to damage the Shareholders'right .The Third Person will engage in Shareholder representative action.In this world,the Shareholder representative action is perfect in America and play a big role in the company .The system originated in the United Kingdom.In our country ,we have insufficiency express provision about the the Shareholder representative action.So in the judicial practice, there are little case.We should take some actions to encourage the shareholders to institute legal proceedings.In the first part,I will introduce the proceedings of the Shareholder's representative action and the necessity.In the other parties,I will discuss the Procedure of the Plaintiff,expense in litigation,compensation and so on.There is no doubt that the Shareholder's representative action could help the company build the enterprise system.