| The protection of small and weak shareholders' rights and interests is a new and valuable task both in theory and in practice in the "Companies act". As an ideal pattern in modern corporation system, the limited liability company is a milestone in the history of modern corporation law. So it is very important to protect the equity of the small-shareholders in the corporation.Beginning from the disciplines of the big-shareholders, this paper analyzes the source of the "abuse of power" and the inferior status of small-shareholders, and then provides the grounds in law on how to protect small-shareholders' equity. Considering the protection status under our "Companies act", the paper demonstrates the procedure and necessity of the protection system.Preface: In this part, it mainly analyzes the starting point of this research and the forming of the protection system. Stemming from the theory of economic efficiency, the modern corporation system is one of the most powerful ways to prosper our economy. It has satisfied the desire of the human to pursue the efficiency and benefit, but the economic benefit should not be the eternal goal to protect the system. The principles of freedom, democracy and the equality should be highlighted. This reflection in economics and law is how to provide protection for the small-shareholders under modern "Corporation Institution".Part I: Necessity of the protection system.With the development of market economy and the enlargement of the company, the ownership and operatorship have been separated gradually. At the same time, the system of company organ sees the center transferred from the shareholders' to the directorates', and the principle of major-shareholders is thus originated. It is the abuse of the equality principle and deficiency of the "Capital Speaks" system that lead to the damage of the small-shareholders' rights and interests, which is originated from the irrational theory and its according system of the traditional "Companies act", so it is high time to put forward the protection system.Part II: Key analysis on the protection system.As an ideal pattern in Modern Corporation, the functional mechanism guarantees the healthy development of the system, and the protection status of the small-shareholders directly influences the operation and development of the corporation. The structural transfer of Property Right, and the assembling and deployment of corporation rights bring the directorate under the control of the big-shareholders, and inturn expose the small-shareholders to damage. When it comes to the requirement of Equality Principle and the establishment of the Modern Corporation, it is essential to make the big-shareholders assume the Honesty Obligation and what the civil compensation they should make when breaking it in "Companies act".Part III: Analysis of the status of protection systemin our country.There are only the provisions of the protection in law in our Companies act. From the function of the shareholders, there are no concrete terms on how to exert the functions, and no valid procedures to realize the rights for the small-shareholders. From the big-shareholders' restrictions coming from the small-shareholders, there is no rule on minimum vote numbers, so it is difficult to choose the directors representing their own benefits to balance the power of the big-shareholders. Form the remedy of the rights and interests, its impractical operation makes the principles useless in reality. From these several points, the protection system in our Companies act is weak and deficient.Part IV: Ways on how to establish the protection system in our country.There are at least four ways to complete the Companies act, firstly, balance the power between the minor-shareholders and the supervisor to realize the restriction on managerial right. Secondly, balance the power between the big-shareholders and small-shareholders, to realize the restriction on shareholders equity. Thirdly, establish the separate directorate, and realize the restriction on shareholders... |
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