On The Limits Of The Corporation Shareholders The Right To Vote

This article studies systematically restriction on voting right of the shareholders. It includes four parts except the preface and has 30,000 words.The first part is a brief account of voting right of the shareholders. It expounds from three aspects — the definition, the nature and the main functions of the voting right of the shareholders. Its purpose is to have a general comprehension of voting right of the shareholders and foreshadows the writing of the following.The second part indicates the defects of "one-share, one- vote" principle and the establishment of the restriction on voting right of the shareholders. It indicates that as a basic principle of voting right of the shareholders, "one-share, one-vote" principle sets the rights on the basis of shareholders' investing amount for the companies and this principle emphasizes equality in capital and shares, which makes it difficult to overcome the shortcomings, as follow, firstly, this principle can make a conclusion that "one person" shareholder meeting is legal; secondly, it makes the big shareholders control the companies; thirdly, the implement of this principle sometimes will breach the original ideas of "one share, one right". The abuse of voting right will be caused due to the absolute enforcement of "one-share, one-vote" principle and will arose some malpractices. Therefore, it has become an inexorable trend to restrict the voting right of the shareholders. In the practice of the Companies Act, the establishment of the restriction on voting right of the shareholder developed step by step. A case in German court in 1922 set a substantial limitation for the use of voting right of the shareholders, which marks the forming of the substantive restriction on voting right of the shareholders.The third part is the theoretical basis of restriction on voting right of the shareholders. It has a profound theoretical basis and discusses from three aspects----jurisprudence, civil and commercial law and economics. It holds that firstly, from jurisprudence aspect, fair and efficiency principle, justice principle, interests balance principle all set the restriction on voting right of the shareholders; secondly, from civil and commercial law, the persons who havethe rights shall not overstep their authorities according to the principle that the rights shall not be abused, which require the shareholders to be restricted specifically while exercising their voting rights; in addition, equality in shareholders principle demands a proper restriction on the rights of some shareholders who occupy an advantageous position, makes up the rights of those shareholders who occupy a disadvantageous position and realizes the substantial equality among shareholders, which make the restriction on voting right of the shareholders an inevitable outcome; finally, from the economics, "Economic people "hypothesis theory requires us to envisage that the shareholders have the nature of "Economic people" and restrict the voting right of the shareholders. From this point of view, every shareholder will get an equal chance of development, expressing their ideas and sharing the development outcome from the joint-stock company, which is the primary signification of the economic democracy principle.The fourth part is the system-formation of the restriction of the voting right of the shareholders. It is necessary for the maintenance of social impartiality, justice, the benefits of the companies and the rights and interests of the shareholders. Only is it regulated scientifically and clearly in the Companies Act. it can really take effect. This part approached the subject deeply from four angles—restriction on voting right of the big shareholders, restriction on the voting right of the shares owned by the company itself, restriction on voting right of the subsidiary holding the shares of the parent company. Combining the fact that the restriction on voting right of the shareholders aren't regulated in the existing company law in China, this article puts forward some specific designs for the system-formation of the voting right of the shareholders in China on the basis of using the legislation and cases in companies' law of the foreign countries and Taiwan region of our country for reference.