The Protection Of The Shareholder's Profits Distribution Right Of The Limited Liability Company

Shareholders dividends are the core rights of the shareholders, the shareholders (especially limited liability company shareholders) to the company, is aimed mainly financed through dividend income received. However, according to Article 47 of China's company law, the provisions of section 38, a limited liability company developed the programme of distribution of profits attributable to the authority board of directors approved the distribution of powers vested in the shareholders. In addition, the Company Law Article 167, paragraph 3 provides that: after-tax profits of the company extracted from the statutory provident funds, the shareholder / shareholders resolutions of the General Assembly, but also from the after-tax profits from any provident fund. So shareholders do not have the right to request uncertainty dividends. In judicial practice, the court based on the judicial principle of prudent intervention commercial judgement, if no shareholders will approve the distribution of profits resolution, then the dividend distribution will not claim the right to be entertained. Therefore, if the limited liability company majority shareholder capital summary abuse, intentionally over-extraction arbitrary provident fund rather than distribution of dividends or distribution of dividends rarely, and as a means of squeezing the small shareholders, the small shareholders are unable to pass effective ways for the judicial relief, This can not be said that the existing Company Law is a major loophole.In order to further improve the limited liability company shareholders dividends of the judicial protection mechanism, the authors limited liability company closed for the characteristics of the proposed legislation through the establishment and improvement of the compulsory company dividends v. direct judicial relief system. Taking into account the principle of autonomy and judicial companies cautious intervention commercial judgement principle is the implementation of the system of the biggest legal obstacles, in order to increase the compulsory company dividends may appeal against, the proposed revision of the Company Law Article 167, paragraph 3, of the requirement that the extraction arbitrary Provident Fund is a limited liability company provides autonomy areas be restricted.