On The System Of Shareholder's Derivative Suit

The system of stockholder's derivative action was originated from England, developed in America and then was referred by countries of Continental Law system .Artical 111 of China's Company Law regulates :If the decision of the shareholders' meeting or board of directors is against law on administrative regulations and violates the lawful rights and interests of the stockholders,the stockholders are entitled to present a plea to the people's court to claim for termination of this illegal and injurious act .But this rule is too general so in judicial practice it is impossible to operate .It is reviewed in reactde China's Company Law, but still too general in action and practice. It is with important theoretical and practical meaning to review the legislative regulations of this system in different countries and make deep research into the system .Stockholder's derivative action means that when the company is encroached by senior partners,directors,supervisors,operation and management personnel and other people but the company delays or refuses to investigate the civil liability of the infringers concerned and fulfill other rights in means of proceeding,in the interest of the company ,according to legal proceeding,the stockholders with legal qualification in place of the company present a plea of the infringers. It is different from the stockholder's direct action .Under certain conditions,it is carried out by the stockholders substituting the company .The result of action belongs to company. It is a right of common benefit , derived from stockholder's right by the middle and small stockholders .It is a basic right for the middle and small stockholders to guarantee their legal rights and interests.The regulations of this system varies in different countries,but all limit the qualification of the stockholders as plaintiff and make the company as one of the parties ,allowing other stockholders to join in the proceeding .In the legal procedure ,it is generally regulated that whether the company has claimed to present a plea is the premise for the plaintiff whether to present a plea and demanding the plaintiff to provide security and that non-pros or reconciliation is not allowed during the litigious process .During the adjudgement,it is the principle that the defendant directly conducts compensation to the company with the...