Research Governance Framework Of A Limited Liability Company

For the reform of Chinese corporate law, it is very urgent to modify and improve related articles in the corporate law and thus to provide necessary legal resources to boost the competitive strength of so many medium and small enterprises. This paper aims at the corporate governance issue of liability limited companies after the supervision of listed companies has become hotspot in fields of law and economics.In liability limited companies, since shareholders have strong similarity to the management, the emphasis of corporate governance is not power distribution among directors, but how to arrange rights and obligations among shareholders on the basis of balancing the interests of shareholders, and then to picture the governance blueprint of liability limited companies based on company self-organization by discussing the relationship between majority shareholders and minority shareholders.In this paper, corporate governance and corporate governance structure are distinguished, with the latter to be built under the guidance of corporate governance principle. In China, the corporate law designs corporate governance from corporate governance structure, and thus the self-organization principle is violated to put compulsory requirement on uniform the corporate governance structures. It impossible for corporate governance structures to be the same, and the law only needs to make general and fundamental arrangement for the governance of liability limited companies.According to corporate contract theory, the corporate law is the paradigm of contract text, with function to supplement or interpret the meaning of the concerned party. Shareholders will make the constitution, self-organizing rule of their company, to stipulate the distribution of rights and obligations, and that of profits and risks, thus it is not necessary for lawmaking to interfere too much. In balancing interests of shareholders, the principle of capital majority should be attached, and it should be vigilant to prevent controlling shareholders to abuse the majority of shares. While in company deadlock or the interests of minority shareholders are hurt seriously, the final systematic barrier is ruling of company dismiss, but we should adhere to the principle of dismiss remedy the last resort. For the management of high-tech industry, share is much more attractive than cash payment, so it is necessary to introduce stock option system.