| The doctrine of the separation of ownership and control is a universal principle of the modern company managements, which leads the shareholders take part in the company's everyday management indirectly and the company is controlled by the board of directors and managers. This legal design , the separation of the ownership and control , on one hand ,makes companies get out of the restricts of inefficiency of management of the owners of the company and get the supports of the newly-cultivated professional managers in modern society , encourages the combination of the physical capitals and the professional labor capitals so as to realize the purpose of increments of the capitals in value and the values of the company; on the other hand , leads the owners to control the company more and more indirectly and therefore, makes rooms for the moral risks, for example, the controllers of the company abuse the control to encroach on the interests of the company and it's owners . The fact that the later becomes more and more serious will naturally twist the purposes of the company legal systems , beat down the confidences of the investors , and erode the foundations of company legal systems . so , it's the base which keeps the operation of company not to deviate from the company's values to reemphasize the rights of the shareholders and ensure their ultimate control of the company . In the structure of the corporate governance , modern company law provides a series of institutions for the shareholders to anticipate the managements of the company, to monitor the controllers of the company and protect the interests of them and the company by the statutory authorizes of the board of shareholders or directors and the autonomy by the charter subject to the independence of managers and the legal personality of the company, which involve the rights of the shareholders to make decisions on the important policies of company managements , to select and supervise the managers of the company , to claim for the profits of the company businesses , etc. In the context of the separation of the ownership and control, however , it depends on how much the shareholders know about the status quo and results of the managements of the company to realize all the purposes of these institutions . hence , it's fundamental to ensure the shareholders' right to know , and the right to inspect the records and files of the company is the core of the said right . In China , the disputes and actions which involve the shareholders' right to know , especially the right of inspection , have become progressively because of the developments of the practices of companies , the enhancement of the consciousness of the rights of the shareholders and more and more serious control by the "the insiders" which is caused by the "single big holder" structure . The shareholders' right of inspection was not provided in the Chinese Company Act 1993, which led these disputes could not be resolved by law. In the newly revised Chinese Company Act 2005, the right of inspection of shareholder of limited liability company and company limited by shares was provided respectively only with the Article 34 and the Article 98. The provision in these two articles , on one hand , lacks of the maneuverability because that it does not involve the conditions and procedures of the right and the scope of objective which can be inspected is too narrow; on the other hand , lacks efficient base of the right because that it does not match it with the preparing and storing institutions of the records and files of company . Most of the researches of Chinese scholars on the right of inspection focused on the introduction of the relevant legislation of foreign countries, lacked the researches on the jurisprudent foundation of the system as a whole and the harmoniousness with other institutions of company law in their legislation advises. This paper is hoped to contribute more or less the enactment of relevant legal implements and the resolution of these disputes by illuminating the essential attributes and contend of the shareholders' right, and the nature and value of the right of inspection, learning from the legislative and judicial practices in comparative law, answering the main questions in practices, systemically structuring the relevant contends of the institutions of the right of inspection and resolutions of the conflicts and the ensuring of the right. The first part, the shareholder's right and the right of inspection. The writer mainly examines the conception, nature, contends, and the classification of the shareholder's right, and the conception, nature, and significance of the right of inspection in this part. The main purpose of this part is to set up a jurisprudent basic to structure the institutions of the right of inspection and to interpret and criticize the existing institutions. Generally speaking, the shareholder's right is taken from the company to get economic interests and anticipate the managements of the company as the consideration of the transference of the ownership of the contributive properties of the investors. There are four main opinions on the nature of the shareholder's right , such as the right of ownership, the right of membership, the right of creditor, and the right of independent type, etc. due to the differences of the focuses on the base of the shareholder's right, the contends of the shareholder's right, and the way the shareholder's right is exercised. The opinion that the shareholder's right is a kind of ownership is unacceptable because it defies the independence of the shareholder's ownership and property right of the company. The opinion that the shareholder's right is a kind of creditor's right focuses on the fact that quite a part of the shareholder's are exercised in the way of claiming. However , the right of claim cannot include all the contends of the shareholder's right, and the creditor's right can mot cover the whole shareholder's right, it cannot explain the nature of the shareholder's right. The opinion that the shareholder's right is a kind of the right of membership has noticed that the company is a corporative legal person and the shareholders are the members of the company, the forming of the company's decisions depend of the ideas of the majority of the shareholders. But the shareholder's right has the negotiability, divisibility by quantity, and the homogeneity in shares which the right of membership dose not has, however. The identification generally only can be gotten on the condition of transference of property right, the amounts of the right depend on the amounts of the property right transferred, and the identification can be transferred with the transference of the shares of the right and can be copied homogeneously with the division by quantity. Therefore, the shareholder's right is exchanged by property right, other than that the shareholder's is derived from the identification. So , the writer insists that the shareholder's right is a kind of independent new type civil right, it's nature is property right. The shareholder's right includes the right of sharing the interests of contributions, anticipating the decisions on important company policies, and selecting and monitoring the managements, and each of the rights are consisted of many rights. However , among all these rights, the right of sharing the interests of contributions which indicates the shareholder's right's nature as a kind of property right is dominating, and the other rights are the vehicle rights to realize it. Civil rights, especially the property rights are "self-interested", it's their nature. The general opinion is that the shareholder's right can be classified into "the right for individual interests" and "the right for individual interests" according it's exercising purpose. The "right for common interests" is a right exercised by shareholders for the common interests of the shareholders directly and for his/her own interests indirectly. This opinion, on one hand, cannot satisfy the nature of right; on the other hand, cannot indicate the dominance of the so called "the right for individual interests" and the dependency and instrumentality of so called "the right for common interests". The writer thinks the shareholder' right can be classified into "the right for interests" and "the right for governance". And, "the right for governance" is for the shareholders to ensure their "right for interests" maximized, the result of the exercise of the "right for governance" is not necessary to satisfy the interests of the company or the common interests of the shareholders. The other important classification of the shareholder's right "single-share right" and "minority-share right" according it's exercising way. The writer thinks it's not efficient to explain that the jurisprudent basic of setting up "minority-share right" is to prevent shareholders from abusing their right. The forming of the company decision bases on the principle of "decided by the majority-share". The "minority-share right" must have the validity and necessity to be an exception of the principle of "decided by the majority-share". The validity includes the remedy to the abuse of the principle of "decided by the majority-share", or the realization of shareholder's interests by maximizing the interests of the company, etc. In terms of the necessity, most of "the rights for governance" are exercised as instruments, their ultimate purposes are to pass through, change or defy certain decisions or actions of the company, and it can only be realized by company decisions under the principle of "decided by the majority-share". The purposes can hardly be realized without certain proportion of shares, even if the instrumental rights can be exercised. There are monitoring rights in the rights for governance besides the rights for anticipating the decisions on the important policies of the company and selecting the managers of the company. These rights are to provide ex post remedies to the company against the actions which infringe on the interests of the company. It will indulge the acts which infringe on the interests of the company if certain proportion of shares requirement is posed on these rights. The principle of "decided by the majority-share" and the independence of the authorities of the board of directors lose their validities in this situation. Therefore, among the "rights for governance", the rights should be "single-share right" which provide ex post remedies to the company against damages, and the rights should be "minority-share right" which are for the shareholders to anticipate and select ex ante. The right of inspection of the shareholders is the right for the shareholders to claim for inspecting the records and files which are formed during the operation of the company businesses. The right of inspection belongs to the "rights for governance" according the examinations in this paper, and it should be "single-share right" because of it's fundamental and instrumental value in the realization of the rights for interests, anticipation and monitoring. The second part,the contents of the right of inspection of the shareholders. The writer examines respectively the subjects, the scope of the objectives, the powers of the right of inspection of the shareholders and the requirements of the right of inspection including the requirements of the proportion of shares, the duration of the holding shares and proper purposes. The writer aims to construct the substantial contents of the right of inspection following the general structure of civil rights in this part. The right of inspection belongs to the existing shareholders of the company, and the one who was the shareholder of the company cannot share it. And he/she can get remedies by torture law, if his/her property rights were damaged by the managers of the company. The objective of the right of inspection is the relevant information of the company properties and decisions which are produced during the operation of the company businesses. The so-called scope of the objective of the right means the scope of the medias of the information which cover the records of the meeting of the board of the shareholders, directors and the supervisors, the financial reports , the accounting books and their original evidences, etc. The powers of the right of inspection include inspecting, copying and questioning, etc. In terms of the requirements of the right of inspection, the right should be "single-share right", should not be posed the requirement of the proportion of shares on it according the examinations in this paper. The right should not be posed the requirement of the duration of the holding of shares because of the continuity and relativity of the operation of the company businesses. The "proper purpose" requirement can hardly pose substantial limitations on the right in the condition that the company takes the duty of proof. And, it grants the company proper right of defense after all, it should be supported by the legislation. The third part, the conflicts and remedies of the right of inspection. The writer examines respectively the conflicts and the resolutions of the conflicts, the ex ante and ex post remedies of the right of inspection. The conflicts in the exercises of the right of inspection involve the conflicts between the right of inspection and the privacies of the other shareholders and between the right of inspection and businesses secrets of the company. In terms of the company limited by shares, the information of the shareholders are not asked to public by laws besides the initial shareholders and the top 10 shareholders of the public company. As to the former, their investing information belongs to their privacies and should be protected by law. Their privacies will probably be invaded by the shareholder who exercises his/her right of inspection. The resolution is to pose the company of the duty of convey of documents following the shareholder' claims and pose the shareholder of the duty of paying the expenses. As to the conflicts between the right of inspection and the business secrets of the company, it can be resolved by providing the company the right to apply for an external auditor to proof it's innocence and counter-fight the shareholder's claims. The way to provide the right of inspection ex ante remedies is to pose the company of the duties of preparing and storing the relative records and files of company properties and businesses, and the ex post remedies is to grant to the shareholders substantial rights to filing actions. The actions should be subject to special suit procedures.
|
PDF Full Text Request