On The Shareholders' Direct Action In Companies Limited By Shares

In the centralized share structure with the character of strong controlling shareholders-weak owners, the infringements of controlling shareholders to the minority shareholders have become the most important problem of the corporate governance. What is more worrying is that it is difficult for minority shareholders to find the way to realize their rights in the company, for the absolute power of controlling shareholders can disorder the management and supervisory organs of corporation. The situation of the unbalance of interests and the absence of private dispute resolutions make an outer mechanism of right remedy based on the judicial power become the last and the most reliant approach of right protection for the minority shareholders, which is the shareholders'direct action.For the purpose to answer the central thesis how to control controlling shareholders through the shareholders direct suit, firstly, we should understand basic types of controlling power abuse by controlling shareholders. A great deal of empirical researches indicate that the controlling shareholders engage in unfair related transactions, misappropriate company property and fraud on minority shareholders by virtue of the majority decision rule and the statue of quasi director. On the foundation of the basic types of controlling power abuse by controlling shareholders and the principle of corporate controlling power check and balance, we could build a frame of controlling controlling shareholders and a system of shareholder direct action, which are on the basis of the broadening minority shareholders'lawful interests and with the aim to substantiate minority shareholders'voting right and reinforcement minority shareholders'supervising right..The purpose of substantiating minority shareholders'voting rights is to prevent controlling shareholders from manipulating the shareholders'general meeting. Since the voting right should be exercised in the particular domain of shareholders'general meeting, the judicial protection of minority shareholders'voting right rely on the litigation of convening the shareholders'general meeting, the litigation of submitting resolution of the shareholders'general meeting and the litigation of resolution flaws. The purpose of reinforcement of the minority shareholders'supervising right is to prevent the controlling shareholders from manipulating directors and the board of directors. There are two judicial protection for the minority shareholders'supervising right: one is to monitor and correct the deeds of directors and the board of directors previously and simultaneity, that is the litigation of director board resolution flaws and the litigation of ceasing the directors'deeds; the other is to aggravate the liability of directors and shade controlling shareholders, that is the litigation for damages against directors and the controlling shareholders. Because the efficient and timely supervision of shareholders depends on their ability to acquire the information of the corporate business, the litigation of right to know is vital for the right of supervises.The shareholders'direct action is supported not only by the material law, but also justice for service and justness offered by the courts, which meet the shareholders'needs. The court should keep prudent activity to response the shareholders'claim with the aim to broaden minority shareholders'lawful interests.