Judicial Protection Of Minority Shareholders In Limited Liability Company

This article discusses foundation of law theory and explains practical significance about protection of the minority shareholder's rights in the limited liability company on the basis of revealing wholely the essential characteristic of the limited liability company and its particular shareholders relationships. The text defines company's control shareholder and the minority shareholder, explains the controlling company power of control shareholder and indicates the legal status of minority shareholder in company on the basis of researching the shareholder ralationship structure in limited liability company. Meanwhile, the article discusses deeply about the ways and standards of infringing rights of minority shareholder in limited liability company. Because limited liability company has closed-held characteristic and the majority-capital determining principle maybe be abused, there exists some benefits dispute among shareholders easily and problems that cotrol shareholders infringe benefits of minority shareholder. According to this, the various countries has established the different protection system of minority shareholder rights by different law tradition, law theory and the related judicial practice. By comparing research of protection ways of minority shareholder rights in limited liability company in common Law system,civil Law system as well as present China law, this article believe: On the one hand we should study from and refer to some classic law theories and judicial practice of common law system and civil law system; on the other hand Chinese company law theory and the judicial practice still has been at the development phase and still be necessary to perfect the protection of minority shareholder in Chinese company legislation.The text altogether divides into four parts. The first part outlines the foundational questions of judicial protection of minority shareholders in limited liability company. By comparing the limited liability company and company limited by shares, it reveals essential characteristic of the limited liability company and its particular shareholders relationships. Then it further expatiates foundation of law theory and practical significance about protection of the minority shareholder's rights in the limited liability company. The second part mainly discusses the various violation of minority shareholders' benefits in limited liability company and how to recognize the violation. On the basis of researching the shareholder ralationship structure in limited liability company, the text defines company's control shareholder and the minority shareholder and indicates the legal status of minority shareholder in company. On the basis of it, the text reveals the various violations of minority shareholders' rights in limited liability company. Meanwhile, the text explains judgement standard of violations of minority shareholders' rights by quoting fiduciary duties theory and legitimate expectations theory from the common law system. The third part compares the ways of protection of minority shareholders' rights among Common law system. Civil law system and Chinese law system. The text partially quotes the law theory and judicial cases of protection of minority shareholders' rights in limited liability company from the common law system and civil law system. The fourth part proposes some suggestions that perfect the protection of minority shareholder in Chinese company legislationAfter analysising the protection of minority shareholder in limited liability company, the author proposes some suggestions that perfect the judicial protection of minority shareholder. The suggestions divide into two parts. On the one hand there are some restriction measurs for control shareholder by studing on the theories of two law systems. Control shareholder should fulfill the fiduciary duties. It will carry out some regulations to restrict the control rights of control shareholders and keep away the violation of interests of company and minority shareholder by control shareholders who maybe abuse the majority-capital determining principle. On the other hand the text proposes some relief measure for minority shareholder and suggestions that perfect the judicial protection of minority shareholder in the substantive law and the procedural law. It suggests that shareholders in the limited liability company sign the written agreement for the specific items to keep away the abuse of control rights of control shareholder in advance. Meanwhile, it suggests to introduce cumulative voting system into limited liability company and establish objected shareholder's stock price appraisal mechanism and endow shareholders with withdrawing right from company as well as further perfect the judicial dissolution company system. In addition, the author also puts forward some suggestions of legislation about direct actions and derivative actions in limited liability company. In sum, concerning the protection of minority shareholders' rights in limited liability company, we would get more theories results and perfect further the judicial protections of minority shareholders' rights if only we study carefully advanced legislation experience from common law system and civil law system and combine it with present situation of market economy development in our country.