On The Shareholder Representative Litigation System

The procedural system of shareholders' representative is the key item in modern company law and becomes the necessary measure to make up for the company's inadequate administrative structure and other inadequate relief methods and will play a significant role on protecting the rights and interests of small and middle shareholders. As the final guard to protect a few shareholders of the company, though developed from the case law of England and America, the procedural system of shareholders' representative has been defined by the mainland's lawful system and most of the countries with the legal system of England and America to establish the commercial laws. Although the procedural system of shareholders' representative was established by the form of law in the newly-revised "Company Law" in China, the rules are considerably principal and are of poor operability and more holes, for example, the legal status of the company in the procedure of shareholders' representative, the procedural status of other shareholders, paying of procedural expenses, etc, no detailed regulations are defined for these matters so that every local court is at no judicial order when dealing with such cases. So this is the obstacle to establish the legal society with united judicature in China.In view of perfecting the procedural system of shareholders' representative in China in which the main characteristics are to use the methods of comparison and analysis, this article mainly introduces and compares the procedural system of shareholders' representative in the legal systems of England and America and of the Mainland and the emergence and development of the relevant procedural system in China, and describes the basic theory of the procedure of shareholders' representative and analyzes the basis of legal theory and legal value of the procedure of shareholders' representative and the necessity to set up such a system in China. Through the comparison of the relevant regulations in the areas of America, Japan, etc., some questions, i.e. litigant, the encouraging and restricting system of the procedure of shareholders' representative, the legal result, jurisdiction, procedural prescription and evidential burden distribution of the procedure of shareholders' representative as well as the procedure of multiple representatives, are discussed in the article, the proposal to perfect the procedural system of shareholders' representative in China. The article is divided into foreword, text and conclusion. The text is composed of three parts.In Part 1, the legislation situation for the procedural system of shareholders' representative in China is described. It introduces the legislative background and process of the procedural system of shareholders' representative in China and demonstrates that the establishment of the procedural system of shareholders' representative is the consensus of the theoretical and judicial circles and is the necessity for the procedural practice.In Part 2, the basic theory of the procedure of shareholders' representative is investigated. At first, it investigates the emergence and development of the procedural system of shareholders' representative in the legal systems of England, America and of the Mainland, including the origin of the procedure of shareholders' representative in England, the development of the procedure of shareholders' representative in the United States and in the other countries with the same legal systems as England and America and in the legal system of the Mainland. Secondly, through the comparison of the procedure of shareholders' representative with the direct procedure of shareholders, it induces and concludes the characteristics of the procedure of shareholders' representative and its relevant functions and it is thought that the prior defensive function is the most important function in the procedure of shareholders' representative. Finally, through the analysis on the theory to set up the procedural system of shareholders' representative, especially on the three key opinions for the basis of legal theory of the procedural rights of shareholders, the conclusion is shown as following: The respect of the company's independent personality is the premise of the procedural system of shareholders' representative; the protection of the shareholders' rights is the theoretical basis of the procedural system of shareholders' representative.In Part 3, it pointed out the detailed measure to perfect the procedural system of shareholders' representative in China. At first, in view of the stipulations in Article 152 of the Company Law, the restriction on the shareholder prerequisites of plaintiff isn't reasonable and isn't useful for the development of the procedural system of shareholders' representative and also isn't useful for realizing its owning two key values: to maintain the rights and interests of middle and small shareholders and strengthen the restriction and supervision of the company, and to perfect the structure of legal theory of the company. Secondly, in view of the procedural participants (including the prerequisites of plaintiff, confirmation of defendant, the legal status of other shareholders and the legal status of company), the encouraging and restricting system (including the calculation and collection of litigious expenses, the compensation of litigious expenses, the claim of the separate shareholder as plaintiff to receive compensation, pre-procedure, guarantee for litigious expenses, judicial review and approval of withdrawal of an action or settlement, and the compensation of the shareholder as losing plaintiff to the company), jurisdiction, procedural prescription and evidential burden distribution respectively, the relevant regulations in other countries and regions are analyzed. Combining the current the procedural system of shareholders' representative in the Chinese Company Law, applying the comparative demonstration method, the interpretative analysis method and the interest use and/or reject method, etc, the more thorough investigation and research are made so that the detailed plans to perfect the procedural system of shareholders' representative in China have been proposed, meanwhile, it is pointed out that the procedure of multiple shareholders' representatives should be accepted in China and the personal opinion to the case execution of the procedure of shareholders' representative should be provided.