On The Shareholder Derivative Litigation The Burden Of Proof

Shareholder derivative litigation is if the company did not start a tort action when wrongful act happened to the company for some reason, shareholders of the company can start an action of subrogation. This is an important system of the company law. Shareholder derivative litigation tries to solve disputes of the company inside, and keep the correct behaving regulations for the senior supervisors and directors. To protect the company and minor shareholders' interest is the final function. In this essay, compared method and cases analysis are used. With the improvement of he burden of proof in shareholder derivative litigations will bring better function.The article is divided into four chapters to explain the topic.The first chapter introduces the legislation and some shortcomings of the shareholder derivative litigation. Firstly, the history of the shareholder derivative litigation is showed. Shareholder derivative litigation originated from some leading cases of Anglo-American Law System, which also exists in Chinese Company Law. I compared two familiar suits in Company Law to get the key point of the system. The shareholder derivative litigation is so important that it is beneficial to the market and is a necessary and effective method for some shareholders. In fact, it is not as useful as we thought because the lack of professional knowledge, the poor protection of the knowing rights, the disability in the suit and the unprejudiced burden of proof.In the second chapter, I emphasize the analysis of the burden of proof in shareholder derivative litigation. Above all I use a form to show the injustice in shareholder derivative litigation。 To change this situation, I introduce some theories about it. Chinese law, explanations included,are also displayed. The accordance and principle of the burden of proof is described. In the forth part, a German authority theory in this field is introduced, analyzed and questioned. To cater to the social fact, I use some reasonable thing in new theories to prove a legal, equal and useful burden of proof. Remedial action for shareholders was introduced properly.In the third chapter, the characteristics and their burden of proof of all parts involved in the shareholder derivative litigation are introduced. The regulation of France, Japanese, Taiwan and Hong Kong are listed and anglicized. Supposed that the rights to know are protected properly, and inequity still exists in the suit, maybe it is high time that the principal of the burden of proof was modified. The burden and rights of plaintiff and the company can be seen. Four cases are selected to prove the above theories.The last chapter of the essay introduces the possible results of the shareholder derivative litigation and gives some suggestions of both substantive and procedural parts. The substantive part uses a definition of doscovery to enforce the proof explosion and to regulate the company. The procedural part uses some primate result of some courts to give some legal suggestions.To sum up, shareholder derivative litigation aims to protect the interest of shareholders and the company. It is not functional if this protection only has a frame without something in detail. We must modify the burden of proof in shareholder derivative litigation which is different from others. Only in this way can we truly protect the interest of minor shareholders.