Study Of The Institution Of Exceptional Exclusion Of Shareholder's Voting Right

The exceptional exclusion of shareholder's voting right is that when the shareholders (in particular, the controlling shareholder) and the voted resolutions of shareholder meeting exist particular interests, resulting in the shareholders'own interests conflict with company interests, to the resolutions, the shareholders or their agents shall not be allowed to vote on their voting rights, nor to exercise voting rights in proxy of other shareholders. The institution is one of the ways to limit and control the abusing of voting rights of shareholders, from the shareholders'voting mechanism itself to amend the basic principle" the capital majority rule". The institution, with its characteristics of feasibility, clarity, effectiveness, and advancement etc., along with other related institutions, such as the demand of good faith obligation for controlling shareholders, an amendment to voting right of controlling shareholders, strengthen shareholders'right of the minority, and to give shareholders the right to sue, etc., commonly complete the role of balancing the proportion of voting power in major affairs of the resolution, preventing individuals from private interests on the damage of overall interests of company. It also indirectly achieves the purpose of protecting rights and interests of minority shareholders.The exceptional exclusion of shareholder's voting right is a relative, temporary restriction to the voting rights of shareholders, being applied only in cases of particular interest by law. The institution is based on the reality of economic life, in which the quality of economic man of the principal shareholders is inconsistent with their individual interests, taking the modern legal concept of no abusing of the right of civil law, the balance of interests as the legislative basis, to reflect the interests of protecting the company and minority shareholders, to prevent the majority shareholders from abusing of the principle "the capital majority rule", to achieve the institution function of controlling shareholder's specification duty of good faith. The institution is applied on the specific circumstances, like the company resolutions to specific shareholder's liability waiver, the disposal of assets of minority shareholders, the exempt of obligations of shareholers to the company, and related party transactions, and individual guarantees from company to shareholders etc. The object of the institution applied not only to the shareholders who have particular interests of the case of shareholders meeting, but also equally applicable to the agent of interest and principal. When the shareholders meeting and its resolution violates this institution, the shareholders damaged could seek relief by internal approach, such as to ask for the reopen of shareholders meeting, to exercise the proposal right, consultations between the shareholders etc. and external approach to sue for the revocation of the resolution.In China, the article 16 of the new corporate law is the initial establishment of the institution of exceptional exclusion of shareholder's voting right, but the legislation is lack of comprehensive focus on it, whether to the object of its application-or to its applicable circumstances.