On The Protection Of The Rights Of Minority Shareholders In The Share Repurchase

This article mainly focused on fiduciary relationships inside the corporation, analyzed every details about principles and basic system construction of minority shareholders' protective mechanism in stock repurchases. Based on summary of different kinds of fiduciary duty requirements to directors and controlling shareholders in minority shareholders' protective mechanism, this article also made certain suggestion on China's legislatures and practice of stock repurchases. According to the article, the protective mechanism of minority shareholders was very important to the whole stock repurchase and the fiduciary duty was the most efficient way of protecting minority shareholders rights by adjusting the inside interest relationships of the corporation. China should try her best to consummate its minority shareholders' protective mechanism by regulate the fiduciary duty of directors and controlling shareholders in order to promote the further development of stock repurchase system.The were large number of cases concerning impairment of minority shareholders by controlling shareholders and in order to realize equality during shareholders, fiduciary duty required directors and controlling shareholders not to seek for unjustified interest in repurchasing stocks. Both continental law and Anglo-American law countries imposed such fiduciary duties on directors and controlling shareholders. By comparison between limitation of Business Judgment Rules and regulations on Corporation Law of Germany, this article comes to the conclusion that laws and regulations required higher-standard fiduciary duties during stock repurchase.This article also advanced certain suggestions on how to improve the fiduciary duties mechanism of directors and controlling shareholders on observing the present legislature of China on stock repurchases. It particularly paid special attention to the repurchase activities during State-Owned-Stock repurchase.