Research On Reparatory Process Of Shareholder Derivative Suit

Shareholders have the plaintiffs eligible of derivative litigation, it doesn't mean that they can institute legal proceedings on behalf of the company when the company suffers from fault behavior. The shareholders must ask for permition, ask the company prosecute by itself or take other remedial measures, or they can allow shareholders eligible of derivative litigation. This is the preparatory process of Shareholder Derivative Suit.The first part of this paper illistrates the basic theory of preparatory process of Shareholder Derivative Suit. First, the author reveals history root of it on the basis of history inspection. Second, explaining the reasons for the establishment of Shareholder Derivative Suit procedures. The author believes that the establishment of Shareholder Derivative Suit procedures mainly for four reasons: One is to protect the independence of corporate personality; second is to comply with the business judgment rule; Third, in order to prevent speculative litigation by some malicious shareholders; litigation; Fourth, in order to save litigation costs.In the second part, the auther will introduce the rules about preparatory process of Shareholder Derivative Suit made by foreign countries, among them, the most developed and completed legal is the United States, forming the principle of "do all internal remedies", accumulated a wealth of case law and doctrine. The shareholders are asked to get the permitment of company's board, shareholders also have to get permitiment from the committe according to the traditional corporation law. Board of Governors or Independent Litigation Committee which setted by the board can effectively block derivative litigation in accordance with reasonable business standards. Britain is the birthplace of shareholder derivative litigation. The rule formed by the case of Foss v. Harbottle have a far-reaching impact, most of the British jurisprudences and doctrines are made by it and the exceptions. In the United Kingdom, when the company's shareholders filed derivative lawsuits, it's not mean that he made a formal request on the board, but proved to the court that non-perpetrator took controlled status in the company. Canada request least for the shareholders among the common law countries. is a common law countries of the shareholders to at least one country, the board in that country has no power to prevent its shareholders filed derivative lawsuits, only give "reasonable through" would suffice. Japan and China's Taiwan region on the continental law countries make some rules about it, Japan Commercial Company Law is obviously more detailed and comprehensive. But both cases require that legislative organs have no right to stop the company's shareholders filing derivative lawsuits.In the third part, based on a comparative analysis of the similarities and differences between countries outside about the procedures prior shareholder derivative litigation, the writer puts forward questions and criticism about the design of the procedures prior shareholder derivative litigation in the new "Company Law" of our country. And here the writer also brings up a few points of view about the reconstruction. First, China should break up the convention of using the legislation routine of Civil Law Countries and boldly introduce the independent litigation committee system in the practice of the national legislation, combining actual situation of China's corporate governance; secondly, China should give corporate the authority to stop the valueless derivative action, in order to realize the real value of the procedures prior shareholder derivative litigation system; third, China should rationally design the process at the request of the plaintiff shareholders, and give the court the right to judicial review; Finally, about the unclearness of the prescription about the conditions required by the excusing-request, our"Company Law"should the legislative method of combining abstraction and enumeration.Through this exposition, I propose that when we amend and explain the corporation law in the future, we should learn more about some mature principle from Britain and the United States, breaking the traditional thinking and trails, particularly in the design on the pre-process and shareholder derivative litigation. We hope that this paper will be helpful to China's future company legislative.