On The Introduction Of The System Of Preference Shares In The Protection Of Shareholder Rights

The Corporation Law of the People's Republic of China has just been amendedand put into effect, which stresses on the protection of the shareholder's rights furthermore. The article hopes to emphasize the importance of the system of preferred stockwhich has not been established in Chinese company law yet, and then draws aconclusion that we should make an amendment for our company law further andintroduce the system of preferred stock. On the other hand, the article views theshareholder as a member of the company with the "member rights" and tries toprovide a new road to do some research about this system, combined with the studyon the development of the company law and the companies in our own country.Firstly the article demonstrates some kinds of elementary questions related to thepreferred stock, which include the development of history, the main substance of thissystem, and the inter-relation with the theme of the protection for shareholder's rights.Then based on the study about the newest legislation from overseas and home, thearticle argues the necessity of the establishment of this system in the field oflegislation for our company law, which may be viewed as to secure the interests of thepublic investors, or to solve the problem in the process of the reform for state-ownedstocks etc. Finally the article makes a comparative study on all sorts of legislation inother countries and provides that our own company law should be further amendedand perfected, and the system of preferred stock should be established as soon aspossible.