Equity Trust Legal Issues Studied

Shareholder's right trust is a kind of trust in which the fiduciary property is shareholder's right, so it follows all the principle's of trust law. Tt is a system through which the shareholder can enjoy and exercise his right and is an innovational use of trust in corporate field. The significance of shareholder's right trust is to centralize the power of control to the corporation. This legal system originated from American corporate law. Later it was transplanted by several countries which belong to the Roman Law system. It has already been used in many ways in China.The legal structure of shareholder's right trust is different from other systems for the shareholder to exercise his right indirectly such as proxy, commission, anonymous shareholder and shareholder voting agreements. It has a lot of functions in the corporate field: (A) to ensure the stabilization and continuance of corporate management, (B) to guarantee the repayment of the creditor's loan so as to help to reorganize the corporation, (C) to prevent the corporation from being hostilely purchased by competing companies, (D) to safeguard the interest of minor shareholders. In order to make our corporate law system work efficiently we need to transplant the shareholder's right trust system into our country.Shareholder's right comprises economic rights and noneconomic...