Studies On The Protection Of Shareholder's Rights In M&A

Shareholders create and undertake the ultimate responsibilities for the corporation. Once the shareholder invests his property into a corporation, it will separate from the shareholder and become the assets of the corporation. And as the exchange of abandon the ownership of the property, the concept of the shareholder's rights emerged and the protection of shareholder's rights has become one of the principles of corporate legislation. M&A is the behavior that affects the asset and the stock structure of the corporation and emphasize on the shift of corporate control. But during the early period of M&A, the directors and managers hold all the activities and shareholders just stand by passively. The directors from Target Corporation always make the recommendation of being merged because of the higher compensation or the acceptance to be the director in the new corporation by the purchase corporation. The effect of the shareholders is limited and they just collect to approve the decisions of the board of directors. Of course the shareholders can also refuse to sale the stock and then they would become the minority shareholders in the new corporation. So in the field of M&A, the conflict between shareholders and other parties is obvious and hard to avoid. And even among the shareholders, there also exist the controlling shareholders and because of the quantity of share and the peculiar position thy hold, the controlling shareholders play the critical role in the shift of corporate control. So in the process of corporation M&A, how to establish the system of duties of controlling shareholders and directors has become the important part in the M&A legislation of the countries. In this dissertation, the author makes analysis on the judgments and legislation of America and England etc. on the basis of understanding the essence of M&A.Besides lead-in and conclusion, the dissertation contains four chapters. Chapter One discusses the objection of the dissertation. In this chapter, the author expatiatesthe concept and the content in law field and thus concludes the essence of M&A is a deal that one man (including natural person and legal person) make use of currency, asset, share etc. as the exchange of corporate control. And the dissertation will discuss the problem of protecting the shareholder's rights in the terms of shifting of the corporate control.Chapter Two discusses the basis of jurisprudence in the protection of shareholder's rights. The author analysis the shareholders especially the minority shareholders inferior position according to the conflict between shareholder's rights and the M&A and the nature of shareholder's rights. From that, the author believes it necessary to protect the shareholders on the principles of equality, good faith, and protecting the weak.Chapter Three introduces the system of protecting the shareholder's rights. The author expatiates the duties of controlling shareholders and the board of directors in the M&A and its jurisprudence basis in the terms of shifting of the corporate control. In this part, the author mainly adopts the method of contrasting and analyzing. The dissertation first makes clear the concept of controlling shareholders and expatiates the jurisprudence basis of duties on the controlling shareholders. On the basis of that, the author summarizes that the duties on the controlling shareholders is the policy of legislation, which confirm the special position of them. And the contrast on the content of duties on the controlling shareholders is to make compensation for the Chinese legislations. Another focal point in this part is the duties on the board of directors in the process of M&A. The author analyzes the different attitudes towards the anti-M&A between America and England, which differs the power and duties on the board of directors.In the last chapter, the author turns the emphasis on the China's legislations and because of the characteristic of representative, discusses in this part are mainly for the activities of acquisition. The dissertation divided the acquisition into two parts and expatiates the duties of controlling shareholders and the board of directors in the two sides. At the end of the dissertation, the author makes some suggestions on the legislation of China.