On The System Of Category

According to the theory of contract, a company is composed of a aeries of contracts agreed by the shareholders, which prescribe their rights and obligations. When it comes to class of shares, the corporate institution gives the company more autonomy, and the classification of shares reflects the principle of corporate autonomy. The nature of class of shares is an agreement among shareholders and a contract between shareholders and the company. At present, China’s class-share-system is still in its infancy, therefore, the author tries to explore the theoretical issues related to class of shares, analyze the present situation of China, and give some suggestions accordingly so as to improve our class-share-system. In addition to the introduction and conclusion, this article is divided into three parts:Firstly, the author has a discussion about the definition and nature of class of shares and points out that the nature of the different categories of shares is due to the differentiation of the rights and obligations of shareholders, which leads to the dual attributes of both equity and debt; then the article introduces the function of class of shares from the perspectives of the company, investor and financial market and states that thanks to the classification of shares, the company can gain the principal by issuing different kinds of shares at its different stages of development; different types of investors can choose their ideal investment objects according to their financial strength and needs for earnings; as well, the issuance of different classes of shares is also beneficial to the prosperity and stability of the capital market.The second part of the essay is the introduction of the theoretical issues of class of shares. The assumption of the homogeneity of shareholders played a positive role in the development of stock institution and the widely-spread principle of one-share, one-vote was consistent with the circumstances that the theory of corporate law was still immature. Yet, with the development of theory and practice, the assumption of the homogeneity of shareholders and the principle of one-share, one-vote have fallen behind the times, and the heterogeneity of shareholders is undeniable. Under this premise, the same rights for the same share is a better interpretation of the principle of equality of shareholders.The third part of the article is an analysis of the current situation of China’s system of class of shares. The writer introduces China’s classification of shares and reviews its reasonableness and deficiency, and then deliberates whether we can use some foreign regulations for reference. After that, the author describes the basic principles of China’s class-share-system, which includes the principle of one-share, one-vote, the principle of the same rights for the same share, the principle of keeping balance among the shareholders and the principle of autonomy under the legal framework. At last, the article gives an analysis of the specific measures China has taken in the protection of shareholders’ interests and points out that China has made efforts to protect shareholders’ interests in the respect of their right to know, the right to vote and the right to appeal.