Corporation Control The Shareholder Fiduciary Duty Theory

This article takes Limited companies, especially listed companies as the background and examines the exploitative actions by controlling shareholders. With the industrialized promotion, the constant enlargement of the scale of company's capital, the constant increase of shareholder's number, as the stockholders' voting right general principle of the Limited company, the majority rule principle has certain historical necessities. It not only irritates investors' enthusiasm but also treats the shareholder equally, it effectively combines the protection of shareholder's rights with the companies' running, and so it has certain scientific spirits. It aims to the equality of shareholders in theory, but practically it often causes shareholder inequality in essence. So the majority rule principle has its defects inherent in the institution, witch led the potential for its manipulation in practice. To rectify such abuses, which bring the result of the unbalance between controlling shareholders and little shareholders, it is necessary to develop the fiduciary duty for controlling shareholders, and to guarantee its performance by the law system established. This text divides four parts altogether. First part includes the characteristic of listed company, the controlling shareholder's definition and the content of fiduciary duty of the Limited company. Because logical causality exists between the controlling shareholders' fiduciary duty and the inevitability of the majority rule principle. So the second part analysis the majority rule principle emphatically. Including: the establishment of the majority rule principle, the abuse of the majority rule principle, the legal theory about why the majority rule principle is abused, and the theory basis about preventing the abuse of the majority rule principle. On these basis, and in analysis exploitative actions of controlling shareholder of listed company in our country, the third part put forward that we should construct the fiduciary duty of the controlling shareholder in our country. Finally, the fourth part describes the defect of the company law of our country, and puts forward suggestions on how to perfect the corresponding defects. Limited Company, means the enterprise legal person whose all of capital is divided into the equivalent share, the shareholder bears responsibility for the company within the limit of its holding shares, the company bears responsibility to the corporation's loan with all of its assets. The main legal characteristic of the Limited company is the capital collection of the company organizes and the share of the capital. Distinguish from the limited responsibility company, the Limited Company allows the freedom transferring of the share, focuses on the gathering of company's capital, implements equal share equal power, equal share equal right strictly, it has realized the ownership separate from stock right, stock right separate from administrative power. As to the meaning of Controlling shareholder, there is no unanimous definition yet at present. This text adopts both essential standard and formal standard to define the Controlling shareholder. As far as shareholder's occupying definitely or relatively majority on the proportion of stock right, form status of controlling, can control the meaning institution of the company, we can judge that he is a controlling shareholder. This article objects to regard the enforcement of controlling power as a composition of the controlling shareholder. The fiduciary duty of controlling shareholder originates from the US Supreme Court Southern Pacific Co in 1919 in free. v. Bogert case, and is accepted by our country's educational circles and stock supervisory committee progressively. The fiduciary duty of controlling shareholder is corresponding to the power of controlling. The fiduciary duty of controlling shareholder includes faithful duty and the duty ofcare. The second part of this article describes the evolution of the majority rule principle of limited company, summarize the four characteristics of the...