Research On The Related Legal Issues Of The Profits Distribution System

This thesis based on the basic theory of illustrating the distribution of profits is talking about the profits distribution of the company from a legal perspective,then analyzes the various conflicts of the distribution of profits and attempts to give a solution. After analyzing foreign and national legislation, the author gives some personal advice for improving our profit distribution system. There are five chapters.Chapter one introduces the basic theory of Dividend and Distribution, what assets can be used for distribution, the rules of distribution. Dividends to the shareholders are the company's profits. The source of the dividend distribution has the following three: revenue surplus, capital surplus and capital. The common forms of the dividends include cash dividends, property dividends, debt dividend, stock dividend, redemption and so on. The main purpose of the shareholders investment is received dividend, the shareholder's right to request dividend is based of their qualifications and status in company. To ensure that the shareholders gain from investment is a problem which focuses on distribution system.Chapter two illustrates the conflicts on the dividend among the stakeholders—including Shareholders, Creditors, Directors and the Company. The conflicts include the following, shareholders want to get the most profit but Company want to retain more profits, major shareholders do not care about the dividend, the right of Minority shareholders to be squeezed, dividends weaken the creditor's right, shareholders to maximize the benefits but directors want to expand the scale of company, etc. This chapter lays the foundation for solving the above-mentioned conflicts through the analysis of the causes of these conflicts.Chapter three provides the possibilities of the two methods to solve the conflicts. Firstly, the stakeholders can make arrangements and limit the distribution of profits by contract. This part illustrates how the contents of the contract agreement, the extent to which conflict resolution, and the limitation of this method. And then, because of the limitations of the first method, we try to find a different method. The distribution is supervised and protected by law. This method includes the following four parts, strengthen the protection of the shareholder's right to request dividend, Make sure that the interests of small shareholders from being infringed upon, improve the protection of the interests of creditors, and strengthen the Obligations and Accountability of directors.In chapter four we analyze the Profits Distribution Laws and Systems from the perspective of comparative law. After comparing with the legal rule in American, Japan, German and France, we come up with the conclusion that laws are strict set of standards to adjust the company's distribution in every country, but there are two kinds of different legal intervention models, The laws are set Accountability system to Illegal Distribution and give shareholders the power of the freedom to set distribution ratio.In chapter five we discuss the Profits Distribution Systems in our country. And then the author points out the defects in the present legal system, such as the excessive mandatory, the lack of flexibility, inadequate relief and so on. In the end, the author gives some advices for how to improve the profit distribution system in our country. The author hold that Legislation of Profits Distribution Systems should be positioned to co-ordinate the interests of stakeholders in a balance. Various laws of Profits Distribution Systems should be made as clearly as possible and to maintain coordination. In strict accordance with the standards of distribution from the earned surplus should not attract investors. Legislation may require that the dividend distribution When the company's annual profit, because of the situation of Long-term non-dividend distribution in China's listed companies. The ratio of the statutory common reserve fund should be decreased. The Regulations of the illegal distribution should be improved.In the end, the author deeply thinks that there are still many limitations in our present legal system. The author hopes that our Legislation based on national conditions, to create an attractive and competitive distribution system through the advanced legislative experience from abroad. The reasons for lack of space, this thesis did not discuss the distribution when the bankruptcy liquidation and the failure of companies to set up.