Study On Fiduciary Duties Control Of Shareholders

In realistic life, the phenomenon of abusing the principle of majority capital voting control rights by controlling shareholders is more and more obvious. They usually take no cognizance the interests of shareholders or the interests of the company, and they make detriments to the company and shareholders from various methods. For the sake of better protection of shareholder's benefits, and prevent abusing of controlling shareholder's power, both the civil law system and the common law system have established the fiduciary duties, regulate it by both statutes and cases, and they resolve the internal dispute problem caused by the abusing more reasonably. China's current corporation law has provisions for regulating the fiduciary duties, but there are still a lot of problems waiting to be resolved. The lack of efficiency appears when it faces the problem of regulating the control of shareholders'rights and judging the dispute reasonably. This text is divided into five parts totally.Chapter 1 of the article is an overview of the controlling shareholders'fiduciary duties. Researches that carry on any problem all should carry on the analysis and comments to the related theories first, this is not only for afterward analysis of related theory but also for providing an efficient way for studying on the basic theories. Therefore, this part of the article explained the development of the controlling shareholders'fiduciary duties. Theoretically, the fiduciary duties were not involved in the duties of shareholders. It is because the frequently happened infringements caused by the controlling shareholders that the theories field just started to have the fiduciary duties expanded from the managements to the controlling shareholders gradually, and the law just started to regulate the exercising of shareholders'right by burdening the controlling shareholders with fiduciary duty. We can say that the fiduciary duty of the controlling shareholders is an active response of the law to the realistic life. The writer think that the fiduciary duty of the controlling shareholders is that when the controlling shareholders are exercising their rights they have the duty of consideration on both the company's benefits and other shareholders'benefits. It includes duty of loyalty and duty of care. On this foundation, the article analyzed theory of giving rise to the control shareholders fiduciary duty which mainly including the power mutually consistent, honest reputation, the shareholder power equal etc. At the end of the first part, the article further analyzes the value of the controlling shareholders'fiduciary duty.Chapter 2 of the article explained the exercises to disobey the fiduciary duty and its danger. First the article analyzed the various performances of disobey the fiduciary duty which including depredation of company property and loot the company opportunity, selling the control power without good faith, the manipulating of the shareholders profits and etc. On this foundation, the article analyzes the breach of the fiduciary duty. Mainly includes the infringement to the company, danger to the minority shareholders, danger to the creditor and the capital market.Chapter 3 of the article is the analysis of foreign regulations which regulate the fiduciary duty of controlling shareholders. In this part, the article analyzed the current status of the fiduciary duty legislation abroad. Includes the contents of fiduciary duty and the type of breach of fiduciary duty and the liability the controlling shareholders should take when breach of fiduciary happens. And they are illustrated by examples from the US, British, Germany and Chinese Taiwan. And also in this part, the article introduced the mechanics the foreign countries may use to regulate the breach of fiduciary duty which include accumulating voting rights, shareholder derivative actions, regulating the infringements to creditors and the capital market etc.Chapter 4 of the article illustrates the fiduciary duty in China. In this part, the article analyzed the current status of the legislation on fiduciary duty. And upon the analysis, the article also explained the problems that exist in the regulation of fiduciary duty including the low and absent aspect of legislation, the provisions can't be applicable to all companies and others concerning unreasonableness of the legislation.Chapter 5 of the article is an analysis on the perfection of China's legislation. In this part the article suggests several measures that can be used as perfecting the legislation of the fiduciary duty which include put provisions that stipulating the fiduciary duty into general provisions of corporation law; a series of provisions that are designed to regulate the implementation of the fiduciary duty which include perfecting the derivative actions, solicitations of proxy rights and etc.