Corporate Division And Protection Of Minority Shareholders

Corporate division denotes a kind of reorganization pattern whereby a company, without having to go through liquidation proceedings, is divided into two or more companies by way of contract or through operation of law. Corporate division turns up with the tide of companies' merger and collectivization, the multiplex management in the western country. It can thin business, contract property and enhance the benefit of company's management. Now more and more countries and areas have established the rule on corporate division in their legislation. Corporate division is a major change in business organizations. It must be adopted by shareholders if the company is divided into two. So it becomes crucial that shareholders exercise their rights to vote. To protect the interests of shareholders in the company, particularly minority shareholders, is the key to the success of the company. The author analyzed the respective values conflict and coordination on company division and the protection of minority shareholders rights. The company should endow more definite interests and rights to the minority shareholders. The author discussed the safeguard on how to protect the shareholders rights in detail.The author recalling the origins of the corporate division and pointed out that it can improve the economic efficiency. Minority shareholders aim at higher benefit through supporting corporate division.Part 1 is on the basic theory of corporate division. Through inspection various countries and areas' legislation and practice, domestic relatively narrow definition of the corporate division, the author raised the understanding of the concept of corporate division. From the perspective of the economic of law, corporate division's function lies in increasing efficiency, reducing operation costs and enhancing competitiveness of the company. The author debates the legal basis to protect the interests of minority shareholders. Minority shareholders interests conflicts with majority shareholders. Especially in the corporate division cases, minority shareholders suffer from aggression enormously. It has tendency to protect the interests of minority shareholders. Corporate division aims at efficiency and protection of minority shareholders rights chases equity. We should focus on improving the efficiency of the company and strengthening the protection of minority shareholders rights when they conflict.Part 2 addresses the major content and the ways of protecting minority shareholders' interests and rights. Compared with the relevant legislation and practice in domestic and foreign, minority shareholders should have some interests and rights. The ways of minority shareholders interests and rights vary in different countries. The ways includeprotection from shareholders willing and public power, the substantive law and procedural law, and previous prevention and post relief. They are a comprehensive and systematic picture. The author introduces a more important way in detail -the right to request the purchase of shares.Part 3 discusses two of the minority shareholders rights: making a motion and knowing information. A comparative analysis of method is been adopted in analyzing demotic and foreign legislation. Making a motion is a fundamental right to minority shareholders. The minority shareholders can carry it. It has two criteria to judge a minority shareholder: first, the number and percentage of stock that shareholder holds;second, the continuing time in holding stock. The information about company division should be disclosed. The minority shareholders have the right to know relevant information. The right to knowing information includes consulting and questioning information. The article discussed in detail the content of the rights to consult and question. Domestic legislation should be perfected and improved to disclose the information on corporate division publicly.Part 4 studies the rights of convening a general assembly and voting in the corporate division proceedings. The developing counties such as US and Japan prescript these rights. China' company law rules the item and reduces the percentage of share. On the other hand, we have to restrict the voting rights of majority shareholders and exclude some shareholders to vote who is relative to the discussed motion. The author conducted the adoption of this rule.Conclusion presented the proposal and suggestion to the corporate division and protection of minority shareholders' interests and rights.