An Analysis Of The Trust System Of Shareholders' Voting In China

As an indirect way for shareholders to exercise the right to vote, shareholder’svoting trust is ainnovative use of trust and shareholder’s voting right.Shareholder’svoting trust system originated from United States in1864, experienced a tortuousdevelopment process.As early as2002in our country have examples of successfulapplication of shareholder’s voting trust, but our country legal system lack of systemdesign and related regulations, does not conform to the real demand of ourcountry.This paper attempts to introduce the theory of shareholder’s voting trust,analysis the necessity and feasibility of introducing shareholder’s voting trust systemin China. This paper is divided into three parts except preface and epilogue:The first part describes the concept, historical evolution and functionofshareholder’s voting trust.Academics have not a unified conclusion about the conceptof shareholder’s voting trust. This paper introduce the concept of shareholder’s votingtrust in common law countries and civil law countries, consider that shareholder’svoting trust is a shareholder or a number of shareholders according to the agreement,transferred the voting rights of stock right to one or several trustee, the trustee in orderto achieve a certain legal purpose, exercise the voting right in a fixed period. On theother hand, shareholders or the designated person have a right to all dividendsreceived by the trustees.This paper reviewed the development history of voting trust system in the UnitedStates.The voting trust has been widely used in the reconstruction of the companies, tohelp the company to revive the purpose, promoted the social and economicdevelopment of United States since1964. In the late19th century, with theshareholder’s voting trust as a way of monopolistic management was abused to realizethe illegal purpose, such as monopoly, so most state court cases about voting trust wasjudged to be illegal. In the20th century, after the United States into the era ofmonopoly capitalism, more and more courts accepted the shareholder’s votingtrust.Today, the United States has passed the statute of shareholder’s voting trust. Thevoting trust has an excellent affect on the expansion of the voting rights, protectingminority shareholder’s interest,the persistence and stabilization of the enterprisepolicies, and attracting investment, resolving the company’s financial crisis.The second part analysisthe legal characteristics of voting trust. Voting trust isthe combination of the trust law and the company law. It can make the voting right of shareholders turn to the control of a corporation. As a special form of trust, it not onlyhas the general characteristics of trust, but also has its own particularity: the object ofvoting trust is voting rights; voting trust is irrevocable; voting trust is valid for alimited period, the voting trust certificate also used as securities, etc. In addition, theauthor introduce the difference between voting trust, proxy, and voting agreement toreveal the unique functions of shareholder’s voting trust.The third part reflects upon the transplanting of voting trust in our country.Although there is no such a specific law or regulation in china, some cases have takenplace. The transplanting of voting trust can improve state-owned stocks management,reduce administrative intervention, and protect minority shareholder’s interests. Theauthor thinks that we should prescribe voting trust and perfect the relevant exteriorenvironment in order to make shareholder’s voting trust system play a more importanteffect in our country. Using the method of legal interpretation in the trust law, orexpand the object of trust from property and property rights to the purpose of"specific". As long as meet the requirements of the law, the shareholders can set upthe shareholders’ voting trust. At the same time, we should constitute the specificregulations of voting trust according to the formation of the clause of corporation lawto promote the development of shareholder’s voting trust system in our country.