Legal Protection Of Minority Shareholder's Rights And Interests In The Limited Company

Limited company and joint-stock company with limited liability aretwo kinds of legal forms of the company of our country's《company laws》.Limited company generally belongs to minority and medium-sizedenterprises on the scope of the enterprise, but the number of it is far largerthan the number of joint-stock company with limited liability, Comparedwith joint-stock company with limited liability limited company haspeople's interrelation nature and sealing nature, the existing of the companyregards good credit and cooperation among the shareholders as the tiecontinuously, the investment of the limited company shareholder is difficultby flowing freely like share of the joint-stock company with limited liability.In practice, the minority shareholder's equity of limited company isextremely easy to be encroached on, the current company laws fails to offerthe effective relief way, a lot of cases appealed to the court can't often getfair and reasonable settlement.However, investors' confidence is the basic assurance of capital marketsteady. Can only the market really protect of investor's rights and interests,could give investor the sense of safety and confidence; Could contribute toinvestors while pursuing one's own interests to maximize, realize therational distribution of the fund, resource, form the benign cycle thatefficiency was improved, the risk reduced, thus ensure the sounddevelopment for a long time of the market. As the mainstay of participant inthe market of the capital, the minority shareholder has low ability to resistrisk; the protection of its legitimate rights and interests is foundation stonesthat the market operates healthily. This text is to discuss the issue ofprotection of minority shareholder's equity of limited company in ourcountry from angle that the theory combines with practice. The article isdivided into three parts altogether: The first part is guidance. The definition of shareholder's equity natureand content of theory circle differs confusingly at present, and the dispute ismostly on the legal principle level. Before the protection of the minorityshareholder's equity is described, explain the definition, nature and contentof the shareholder's equity first. Big shareholder and minority shareholderare not legal concepts and they are unable to be marked strict definition infact, with the constant development of social economy and company lawtheory, the big shareholder generally means the shareholder with control tothe company, other shareholders are minority shareholders. Limitedcompany has different characteristics from joint-stock company withlimited liability, mainly has people's interrelation nature and sealing nature,thus the relation with shareholder of the Limited Company is different fromthe relation with shareholder of the joint-stock company with limitedliability. However, our country's《company law》has not really reflected thepeople's interrelation nature of limited company from system design . Onthe contrary, the company law of our country is reflects as capitaldetermined everywhere on the system operating inside fixed limitedcompany, totally design according to the principle of the Limited Company.And the principle may cause the abuse that the majority determined formost of advantage, make the minority shareholder's right to votenonsensical, make will of big shareholder can force to minority stockholder and Company, as for minority stock holder, its will and property arein the state of separating each other, and the big shareholder often sacrificesthe interests of other shareholders in order to meet the demand that one'sown interests maximize, have destroyed the administration structure insidethe company. Thus shareholder's equal principle is proposed. Theshareholder proceeds from angle of the subject and defines the equal oneequally, it is specifying on the company law of fair and honest andtrustworthy principle on the civil law, refer to no matter the amount that theshareholder holds the quantity of shares, the occasion of the relation takeplace on the basis of shareholder's identity between the company andshareholder, should offer shareholders with the equal treatment. Andrestriction on the thing that it is rational namely in most capital of adheringto while being principle, shoulder obligation honest and trustworthy to thecompany and minority stock holder while limiting majority determinedprinciples in the advantage of exercising of big shareholder, prevent mostabuse to capital of big shareholder, in order to protect the interests of theminority stock holder, its purpose lies in making interests among themajority and minority stock holders balanced, is in the hope of forming theequality of the essence . This is exactly the theoretical foundation that aminority shareholder's equity is protected too. The second part is the Behavior and reason that the minorityshareholder's equity is encroached on. First of all, the typical caseencroached on through the minority stock holder of limited company right,the ones that analyze limited company's minority shareholder's equity ofour country and is encroached on are serious, it is true and often unable toget the due guarantee because of failing to offer the effective relief way inlaw. Secondly, it has enumerated the common behavior that limitedcompany's minority shareholder's equity of our country is encroached on.As follows, mainly:The big shareholder abuses the right and occupiescompany's property illegally; The minority shareholder is squeezed out ofthe administration and supervision authorities;The provided funds ofminority shareholder is easy to be locked for a long time;Predicament thatminority shareholder's stock is diluted ; Assessment question in theinvestment assignment clause. Above-mentioned five situations indicate thedifficult predicament of minority shareholder of Co. Ltd is serious thanjoint-stock company with limited liability minority. Moreover, it hasanalyzed the reason why the minority shareholder's equity is encroached on.There are three respects mainly:Influence of China's traditional culture.;The lags of legislation about company management ; Informationasymmetry and semi-clientage. The aforesaid influence indicate, to thesituation that the minority stock holder of limited company or the closedcompany is encroached on by the big shareholder under the capitalistsystem in the West, the miserable degree when encroached on of limitedcompany minority stock holder of our country is more serious, theprotection of the minority stock holder of limited company of our countryhas urgency even more. The third part is the Construction of the security mechanism of theminority shareholder's equity. Base on the protection practice of theminority stock holder of limited company of our country, refer to thelegislative experience with advanced minority shareholder's equity foreignboldly, the meaning is signaled to further sound special minority stockholder of nature interests relief measure accord with limited company. Thisanalysis the distance between our country and developed country inprotection of the limited company's minority shareholder's equity, thusaccording to our country's conditions, use the advanced legislativeexperience abroad for reference, propose the construction of limitedcompany's minority shareholder's equity security mechanism of our country.First, give the minority shareholder a special right. Including: The convenesright of minority shareholder;The minority shareholder's right of being inknows and right of checking;Ask for right in share buy-back of theminority shareholder;The right of the minority shareholder applies todismiss the company. Second, stipulate the big shareholder's obligation andcivil liability. In the company, the capital of the company is made theinvestment but have by all shareholders of the company, according to thisequal basic principle of the shareholder, during the process of managing inthe company, the big shareholder should regard credit principle as basicdemand, can't abuse control power to obtain one's own private interests inorder to the legitimate rights and interests of damaging the minority stockholder while exercising the stock right. Nowadays, Great Britain Americanlaw continent law stipulate sincere obligation of shareholder in companylaws. This system has promoted the perfection of company's administrationstructure well too while protecting the interests of the minority shareholder.So accelerate the perfect of our country company legal system, and makebig shareholder with sincere obligation in order to protect company and...