On Revocation Of Resolutions Of Shareholders' Meeting

This paper aims to study the system of the revocation of the resolution of the shareholders'general meeting.The system of the revocation of the resolution of the shareholders'general meeting is widely admitted by many countries. The amendment of the Company Law of the People's Republic of China makes a great improvement of this kind of system. Article 111 of the old Company Law provides that, If any resolution adopted by shareholders' general meeting or the board of directors violates law or administrative regulation or infringes the lawful rights and interests of shareholders, shareholders have the right to initiate proceedings in the people's court to require that such acts of violation or infringement be stopped. This is the only express provision about the litigation rights of the shareholders. Article 22 of the revised company law provides that, if the procedure for convening meetings or the voting method of the shareholders meeting or the shareholders'general meeting or the board of directors of a company violates laws, administrative regulations or the articles of association of the company, or the contents in the resolutions are in violation of the articles of association, the shareholders of the company may, within 60 days upon the date of making the resolution, request the people's court to revoke them. The revised law not only expands the system and it can be applied in the shareholders'meeting of the limited liability company, but also the law moves the provision in the specific provisions to the general provision. And it will do great benefits to the rigorous and impartial procedures in the company governance. But the system in the revised company law is still imperfect. Details about it will be discussed in this paper.The shareholders' general meeting is the organ to form decisions of the company. The resolutions of the shareholders'general meeting, as the will of the company itself, can adjust the internal activities and constrains the activities of the corporation outsides. The system of resolution of shareholders'general meeting reflects the value of procedural justice and entitative justice.The reasons of the shareholders' general meeting are flaws of the convening procedures. In general, there are three kinds of specific situations. One is the kind of flaws of the convening procedures, including improper conveners and defective notices or announcements and unsuitable meeting places. Another is the kind of flaws of the methods used to make resolutions, including improper participants of the meeting, and defective party exercising the voting rights, violation of the requirements of the resolution, not exercising the voting right in unity as well as inappropriate agencies of voting rights. The third kind of flaws is caused by the content of resolutions violating articles of association or administrative regulations. Once the content of resolutions of shareholders'meeting violates articles of association or violates administrative regulations , the resolutions will be revocated.The exercising of the right of the revocation is discussed and the methods and the parties and the period are involved. It is expressly stipulated in the commercial laws or the corporation laws in many countries that the resolutions of the shareholder'general meeting can be revoked by litigation. Shareholders are the parties and they can sue for the revocation of resolutions of shareholders'general meeting, which is provided in Article 22 of Company Law of the People's Republic of China. It is not that all the shareholders can be the parties, who have the right to revoke the resolutions according to the practices and theories. There are some theoretic arguments worthy to think over, such as the shareholders absent from the meeting having the rights of revocations or not, and if non-voting-right shareholders can revoke a resolution or not, it is necessary or not that the plaintiff must have the certification of shareholder both in the time of making resolution and in the time of suing a lawsuit. In addition, whether the board of supervisors and the independent directors should be entitled the rights of revocation or not, and so on. They will be discussed in detail. The right of revocation in nature is a kind of scheduled period stipulated by the jus cogens. The party will lose the right to win in court if the period is passed.Then, legal consequence and validity of exercising the right of the revocation are analyzed. The judgment made in the court will take the effects on the plaintiff and the company and the third party. If the plaintiff wins, other shareholder'applications of revocation will be refused. But if the complaint be refused in respect of the flaw of the certification of the plaintiff, any other proper shareholder may sue another lawsuit to revoke the resolution of the shareholder'general meeting.Following, the reflection on the improvement of the system of revocation of resolution of shareholders'general meeting is involved. Studying the system of the assurance of litigation and the rejection of the power of discretion and the right to claim the compensation for damage and other systems related, the author puts forward the relevant proposals. On the relevant system, the legislative cases of Japan and South Korea can be taken into the references. In assurance of litigation system, we should make sure that whether the shareholder who sues a lawsuit is honest or not. Also, it is should be avoided that the shareholder abandoned the revoking right because of none-ability to afford the expends. In addition, the right of claiming compensation for damage may be entitled to the company in order to prevent the revoking rights from being abused by the shareholders or making amendment of the damage caused by the abuses of that right. Also, the reasons of the revocation should be improved and other aspects of the system should be specified, such as the objects noticed, the places of the meeting, the limitations of the voting right, the number of the shares held by the shareholders attending the meeting, the violations the meeting'procedure or the methods of making decisions or administrative regulations.The author draws a conclusion on the system of the revocation of the resolution of shareholders'meeting, meanwhile, summarizes a series of thoughts on the structure of the system. As the theory of corporation law study develops, revocations of resolutions of shareholders'meeting will be better.