Legal Analysis Of The Shareholders' Representative Action

Shareholders as investors are the eventual owner of property of company. When the rightful interests are infracted by others while deputy organs are remiss in exercising litigation right, shareholders deputy litigation system is adopted to protect the interests of company and shareholder. In the company law legislation of China, shareholders deputy litigation system is still blank, therefore, the basic theory research of shareholders deputy litigation system has important practical significance. The concerning theory of shareholders deputy litigation system is wide and complex. Three important questions of them in this paper are discussed: law theory basis of shareholders deputy litigation right, nature of shareholders deputy litigation right and value trend as well as its realization mechanism.The law basis of shareholders deputy is analyzed from the point of entity law and procedure law. From the point of entity law, shareholders deputy litigation right results from the legal status of shareholders as investor. For keeping the interest of shareholder as investor of company, company legislation should control and regulate faith obligation of shareholders to prevent them from abusing controlling right; intensify faith obligation of directors and managers to offset the negative influence from shareholders general meeting core to directorate core. Shareholders deputy litigation system is an important tache of these coercive criterion mechanisms. From the point of procedure law, the law theory of shareholders deputy litigation lies in the procedure parties definition caused by the extension of parties definition. The traditional litigation theory can not solve the problem parties in shareholders deputy litigation are not direct concerning parties. All the persons who comply with the conditions of bringing and answering a lawsuit, no matter whether they are related with the interests claimed and the interests is admitted or not by law, can be the litigation parties, which is the developing trend of modern civil litigation system in theory and practice. According to this theory, litigation parties can not be the related interest person, Shareholders deputy litigation just relies on this theory and integrates into civil litigation system.Shareholders deputy litigation protects the interests of the whole company but not some individual shareholders. The interest of winning of plaintiff attributes to company but not the shareholders who bring a lawsuit, therefore, shareholders deputy litigation right belongs to joint benefit right. The reason of shareholders owning deputy litigation right results from their legal status. Deputy litigation right is single shareholders right or minorshareholder right is the policy choice of legislator. In order to keep the rightful interest of company and shareholder, our country shoulder adopt single shareholders right. Deputy litigation right has many similarities and difference with subrogation right and dealership right in civil law. The author thinks shareholders deputy litigation right can be regarded as a kind of legal supplement deputy right of company.Company is a aggregation of various economic interest. Company legislation must justly protect interests of each part and establish good interest balance mechanism. The basic value trend of shareholders deputy litigation lies in justness and efficiency, seeking a balance mechanism between protecting interest of middle and small shareholders and checking their bad litigation. Generally fairness embodies the protection of interests of middle and small shareholders while efficiency embodies checking their bad litigation. In order to balance equity and efficiency and realize balance mechanism, the company legislation should construct a double system of encouraging and holding: widen plaintiff and appeilee qualification; ease the cost of plaintiff to depress sill of shareholders deputy litigation; establish preceding procedure and litigation cost guarantee system; restrain dealing right og plaintiff shareholders; defini...