Protection Of The Rights And Interests Of Small And Medium Shareholders In Limited Liability Company

For minority shareholders, dividend is very important way to get return on assets a limited liability company. China’s "Company Law" Article 4 conformed the dividend rights of shareholders in the form of legal recognition. However, in a limited liability company, the largest shareholder might misuse "majority rule" manipulating the shareholders of the company to avoid the dividend obligations, which damages dividend rights of minority shareholders. Besides taking social responsibility, the company should maximize shareholder value as the ultimate goal. As a member of group, the minority shareholders’dividend rights should be paid much attention. On the one hand, China’s new "Company Law" provided some relief measures, including the transfer of equity (the "Company Law" Article 71), dissenting shareholder equity withdrawal ("Company Law" Article 74), revoking or confirming the resolution invalid (the "Company Law" Article 22), the dissolution of the complaint filed company (the "Company Law" Article 182). But these deficiencies are not effective and cost too much, which need further improvement. On the other hand, for the minority shareholders in the company failed to provide the resolution of the case of dividends, based on the direct shareholder dividend rights filed to the court requesting compulsory dividends, local courts have different views and understanding. In many cases, when filing the review was blocked outside the courthouse door, or by the court to "do not meet the formal requirements dividends" as an excuse, the judgment dismissed the claim, which is really not conducive to the realization of the right to the protection of minority shareholders dividends. Therefore, China should learn from the legislative experience of Britain and other countries, the introduction of mandatory dividends of the complaint, the protection of vulnerable dividend rights of minority shareholders.This paper is divided into four chapters in the structure:The first chapter is the necessity and feasibility to protect dividend rights of minority shareholders in limited company. The writer combines the main form of case studies and the reasons for the infringement of the minority shareholders’ dividend rights. By comprehensive legal practice and legal basis, the writer obtained the urgency, necessity and feasibility of the protection of minority shareholders dividends right.The second chapter is the situation and problems in protecting of minority shareholders dividends. The writer analyzes the relevant statute of "Company Law", pointing out some of our existing indirect Remedies (prior contractual protection measures, equity swap, equity withdrawal dissenting shareholder, shareholder resolution void or voidable lawsuit, the company dissolution v) is not strong for the problems. Concluding the existing system is not sufficient to fully protect dividend rights of minority shareholders.The third chapter is the improvement existing protection measures. In this section the wrier proposes recommendations to improve China’s "Company Law" the relevant dividend rights protection system, divided into pre defensive protection and the subsequent relief. Including the construction of contractual system, enhance the scientific resolution of the shareholders’ dividends and democracy perfect Divestment system to guide the court referee dissolution of the complaint seriously.The fourth chapter describes the relevant foreign legislative experience mandatory dividend for the complaint, pointing out the superiority of the mandatory dividend of the complaint system. And the writer proposed the idea to build substantive and procedural mandatory dividend of appeal in our country.