On The Flaw Shareholder The Right To Limit

This paper mainly focuses on the impacts of flaw contribution on the shareholders. The shareholders'violation of the contribution obligation and the flaw contribution are found in multi-form existence. As for the flaw contribution, the《Company Law》specifies the responsible person shall assume the civil liability for the breaching to the other shareholders and outsiders, while the company and the shareholders assume the administrative responsibility. However, the impact of flaw contribution on the shareholders rights is not specified. The prevailing discussions are mainly stressing on the liability of those who committed the flaw contribution for the breaching to the shareholders. The author of this paper, based on the cases tried by herself, discusses on the impact of the flaw contribution on the shareholders'rights and comes to a conclusion that the shareholders'right for the shareholder that committed the flaw contribution shall be restricted. The extent of the restriction of the shareholders'rights may be specified in the Articles of Association or in the laws. When there is no such Articles of Association nor laws available, a consideration of the restriction of the shareholders'proprietary right and the voting rights in the shareholders'co-benefit right.This paper is divided into 4 chapters. The first chapter mainly relates the discussion on the general conditions of the shareholders'rights in the limited corporation. A discrimination of the meaning of the shareholders'rights is discussed. Then foundation for the shareholders'rights is discussed. After the"Theory of Shareholders'Contribution"and"Theory of Shareholders Qualification"and their reasons are analyzed, it indicates that the qualification of the shareholders is more rational. In the Section 2 of this chapter , the details of the shareholders'rights are related including the request right for the dividend payout(investment earning right), right for participation in company operation management, assignment of contribution or shares, rights to know, share subscription priority, distribution of residual property, as specified in《Company Law》or Articles of Association. Also the analysis is done on the disputed appealing right of shareholders. an analysis on the structure of shareholders'rights is presented following the elaboration of the nature of the shareholders'rights. The author, therefore, puts forward that the different functions of the shareholders'rights have their own right's basis under the unique prerequisite.The second chapter analyzes the conflict between the flaw contribution with the shareholders'rights. In the first section, the stress on the shareholders'obligation for the contribution is given and author throws light on the shareholders'flaw contribution, that the shareholders'flaw contribution may fall into two categories and then break down to 8 cases: 1.No contribution, including refusal of the contribution, false contribution, spiriting away contribution and inability of contribution; 2. No proper contribution, including insufficient contribution, deferred contribution, value variance in physical contribution or intangible asset contribution, or flaw in physical contribution. In the second section, the discussion on the relationship between flaw contribution and shareholders'qualification and rights presents the idea of no inexorable relation between the flaw contribution and the acquisition, validation of shareholders qualification, and shareholders qualification does not equate shareholders rights. However, the flaw contribution has organic relation and conflict with the shareholders'rights.The third chapter carries out the theoretical analysis on the restriction of the shareholders'rights for those shareholders that committed flaw contribution. The first section analyzes the regard of the foundation of the shareholders right function, basic civil principle applicable to the rights and obligations, human nature and feeling, as well as the feasibility of the restriction. In the section 2 details the difference and the relation between the restriction of the shareholders rights for those shareholders that committed flaw contribution and the restriction arising from stipulations of the laws and regulations for the shareholders'rights. The difference lies in the basis for the restriction and the objects for the restriction, as well as the content and scope for the restriction; one of the relation between the two is that the stipulations of the laws and regulation for the shareholders rights is applicable to the shareholders that committed the flaw contribution; the other relation is that the restriction of the shareholders'rights for those that committed the flaw contribution may be stipulated in form of laws and regulations. In the third section, the principle for restriction of the shareholders'rights for those who committed the flaw contribution is"distinguishing": no contribution and insufficient contribution shall be distinguished; the content and the foundation of the shareholders'rights function shall be also distinguished respectively by applying restriction or no restriction.Chapter 4 analyzes the type of the shareholders rights for those who committed flaw contribution. Distinguishing may be may required in restriction of the shareholders'rights for those who have not contributed and for those who have contributed insufficiently. Of the two, the former is the basic factor. In case of the former one, the restriction shall comply firstly with the company's Articles of Association, and secondly with the laws'stipulations. If both are lacking, the determination shall be based on the theory concerning the shareholders'rights. The conclusion is: In principle, the shareholders'proprietary rights shall be restricted, and as for the shareholders'co-benefit right, in principle, it shall not be restricted. However, the voting rights may be taken into special consideration for a restriction.