Research On Shareholders' Inspection Rights

In modern society, the company has become a major economic activity. In order to obtain maximum benefits, the shareholders invest in the establishment of a company or companies that already existed. However, the modern corporate system pursues the principle of separation of ownership and management, so most shareholders are not directly involved in the management, and most of the company's day-to-day operations and decision-makings are in the hands of the Board of Directors and Managers. Therefore, in the process of controling the company and making business decisions, shareholders often find themselves in a weak position with asymmetric information, which causes their rights difficult to be realized. In order to exercise their rights fully, shareholders have to understand the company's business more comprehensively and objectively, and the shareholders'inspection right is an important way. Thus, confirming the shareholders'inspection rights, which includes the right of access to the financial accounting report, the right of access to books and the right of access of other documents, and strengthening its protection is one of the objectives of the modern world company law system. The new Chinese Company Law has clearly established the system of the shareholders'inspection rights, which has made substantial progress comparing with the old law. However, there is still a gap between ours and the advanced countries', so we need further improvement. Based on the analysis of the experiences of many countries'legislation, I give my own views on improving the system of the shareholders' inspection rights.Except the introduction and conclusion, this article is divided into four chapters, and its structure is as follows:Chapter one defines the shareholders'inspection rights and explains its contents. This chapter is divided into two sections. The first section is to define the concept of the shareholders'inspection rights and reveals its important value. The second section writes about the contents of the shareholders'inspection rights on the base of analysis of many countries'legislation, and divides it into three parts: the right of access to the financial accounting report, the right of access to books and the right of access of other documents.Chapter two is about the elements of exercising the shareholders'inspection rights. After discussing the need of regulating the exercise of the shareholders'inspection rights, this chapter is divided into two sections. Section one is about the entity requirement of exercising the shareholders'inspection rights, it requires shareholders should meet the subjective and objective requirements. The so-called objective requirements are that shareholders should have the shares for a certain ratio and time, and this is different depending on the distinction of limited liability companies and joint-stock companies. The limited liability company shareholders don't have to be restricted, while the joint-stock company shareholders should be strictly regulated. The so-called subjective requirement means shareholders should have legitimate purposes. This part describes the relevant legislation of the United States and Japan. In the allocation of the burden of proof, the company has the obligation to prove that shareholders have improper purpose. Section two is about the procedure requirement of the shareholders'inspection rights. Shareholders should provide the proof of identity and request of access, and should carry out inspection at the appropriate time and place in the manner provided by law.Chapter three describes the ways of exercising the shareholders'inspection rights. This chapter is divided into two sections. Section one discusses the way of directly exercising the right, that the individual shareholder representations directly to the company or through entrusting others. Section two is the indirect way of exercising the right of access. In a comparative analysis of the system of inspectors in Britain and Japan, the system of auditor in France, the system of special investigators in Germany, come to our shareholders should be strictly regulated and introducing this system.Chapter four is about the author's thought and proposals on improving our system of the shareholders'inspection rights. This chapter is divided into two sections : Section one is the regulation of the right of our Company Law. Chinese Company Law has clearly established this system and made a substantial progress, but there are still many areas that need to be further improved. Section two is the proposals about improving this system, this part is divided into five major parts. First, Chinese Company Law should give the joint-stock company shareholders the right to inspect the books. Second, the government should expand the scope of the right of access to shareholders. Legislation should put the original documents into "accounting books," and approve the shareholders inspect the record books of the affiliated companies.Third, regulate the exercise of the right of access to shareholders. Fourth, Chinese Company Law should introduce the system of electing inspectors. Fifth, improve our relief way of the right of access to shareholders. This can be seen from two aspects to improve. For non-litigation relief, the legislation may impose a decree similar to the payment order of the civil investigation proceedings. For litigation relief, we should determine the proper defendant, the right choice of proceedings and the clear legal responsibility.