Study On Some Issues Concerning The System Of Representative Suit In China

Western countries have a developmental history of over one hundred year in the Representative suit, while in 2005, China firstly introduced system of representative suit when revising Company Law of the Peoples Republic of China in the formal sense, and it was not long and mature in terms of the setting up and execution. This paper tries to construct and perfect the system and contents of our Representative suit from the parties, the scope of object of litigation and the related procedures of it.Firstly, the prevue of Representative suit. This part mainly discusses the meanings, characteristics, the origin and development and also the developmental history and status of Representative suit. It aims at studying the origin and development of Representative suit; and understanding the developmental situation.Secondly, parties of Representative suit. This part mainly studies qualification of the plaintiff, the accused range of Representative suit and status of the company when litigating with other shareholders in the lawsuit, and also it finds shortcomings of a few issues listed above ruled in Chinese legislative system, in addition, it suggests learning the experience from the advanced contents provided by foreign laws, at last, it makes our Representative suit abide by laws and work with maneuverability.Company law in China provides a relaxed rule towards qualification of the plaintiff with some limitations, however. The author thinks shareholding commitment should be shortened, not ruled definitely, meanwhile, as for share holds got from grant, inheritance and so on whose investor holding time should be counted from the period of the former holder so that the lawful rights and interests of shareholders, especially those of small and medium shareholders could be protected better. For the holding time of the company founded soon, it is suggested that shareholders who reach a certain percentage of share holds shall institute legal proceedings should be permitted. In order to conform to systematic development of the corporation, add and simplify multiple derivative litigation system, either nominee shareholders or substantial shareholders, or shareholders without right to vote should be allowed to litigate as the plaintiff as long as the purpose is to protect the rights and interests of the company.As for the defendant of Representative Suit, besides its object scope is analyzed, whether the defendant could file a counterclaim or not is also mainly involved. The author thinks, if companies are allowed to be plaintiff in Representative suit, defendant should be allowed to file a counterclaim for the purpose of cost saving, at the same time, it helps ascertain the case facts and improve the efficiency of lawsuit.For shareholders who fail to initiate Representative suit, the author suggests we should learn from America and Japan that it is courts tell the shareholders that shareholders may apply for being involved in the lawsuit as joint plaintiffs, if they do not participate in the proceedings, the people's court shall inform the representative suit of the res judicata, if the plaintiff shareholder loses, the other shareholders should not initiate proceedings of same reason again.Thirdly, the scope of object of Representative suit. By the analysis of scope of object of Representative suit between foreign legislation and our legislation, the author thinks that the evaluation should combine the United States and Japan in the legislative model to determine the scope of object of Representative suit, companies who can initiate proceedings, the shareholders in them may initiate Representative suit.Fourthly, the procedure of representative suit. This section describes the Litigation prepositional procedure that has been stipulated in Chinese legislation, the evaluation and corresponding advice in the perfection of it. On the one hand, it is to explain emergency specifically, on the other hand, it is suggested to explain exceedingly the board of directors prescribed in The Company Law, such as listed company's shareholders express requests towards Litigating Committee that their commands of instituting legal proceedings should also be regarded as Litigation Propositional Procedure.Meanwhile, stipulation of the suggestion of increasing procedure. For example, it is suggested that costs in Representative suit should be counted in terms of non-property cases, increases legal costs in the guarantee system, and sets up reconciliation of Representative suit and censorship of withdrawing a lawsuit. For litigation jurisdiction and aging, it is suggested by the intermediate people's court located in the same area of the company that administers such cases and litigation rules for three years.