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Shareholders Voting Trust System A Number Of Issues

Posted on:2009-05-01Degree:MasterType:Thesis
Country:ChinaCandidate:Q HeFull Text:PDF
GTID:2206360272959553Subject:Civil and Commercial Law
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Voting trust is set up by contract of two or more shareholders. In a fixed period, the trustor irrevocably transfer the legal title of their stocks to one or more voting trustees for voting certificates of a certain number of shares, which are issued by voting trustees in their own name. Then the voting trustees hold legal title of such shares and may vote the shares in accordance with the trust instrument. The system of "voting trust" originated from American corporate law and existed for more than one hundred of years. Americans use the traditional trust system and flexibly utilize the fiduciary performance of the stockholder's voting right in order to perfect the system of stockholder's voting right, which solve all kinds of problems when the stockholders exercise the voting right, and which extensively apply it to the different development periods of the foundation, normal management and reconstruction of the companies. It has an excellent affect on the reconstruction of the companies, the persistence and stabilization of the enterprise policies, etc. It is certainly to say that voting trust is a unique innovation in the history of exploring how to thoroughly exercise the shareholder's voting right in the American jurisprudential circle. It also provides a new train of thought to perfect the system of voting trust.Pursuant to the information we have, there is neither the statutory law of voting trust, nor the prohibitive regulation without permitting the exertion of such right in China, Therefore, it is a lawful means which comprehensively use of the principles of Trust Law and Corporation Law, and a system under the prescription of Trust Law, Corporation Law and other relative laws and regulations. In 2002, Tsingtao Brewery Co., Ltd. is the first Chinese company which uses such means to transfer their equity. As the development of trust system and the extension of the field of performance, the voting trust will pay a more and more important role in stock corporations in China. What are the function, essence and theoretical foundation of voting trust? How does voting trust operate? How can we introduce voting trust? From the angle of corporate and trust law, this article is divided into four chapters to analyses such problems by institutional economics theory and try to contribute for the legislation of voting trust in the future.Voting trust is a newly-born system in our country. There are few people to thoroughly know about it, even in the professional practice circle of trust and jurisprudential circle, as well as the law circle. Chapter 1 of the essay will start form the first case which uses voting trust to analyze the essence and function of voting trust and points out the difference between the voting trust and other institutions. This article holds the view that voting trust is a kind of trust and its essence is to place the control of a corporation. Through the strict procedure of creation and flexible trust contract, voting trust satisfies the different requirements of the parties about corporate control and achieves shareholders' maximum profits.Voting trust was ever strongly opposed by the society, jurisprudential and law circles of the United States, for the reason that was abused to realize the illegal purpose, such as monopoly, cheat, etc. Later it played a positive role in the social economy to make American courts and scholars gradually change their attitude, however, the negative theories of voting trust had a great influence on it and in other countries, even now some people are opposing the effectiveness of voting trust according to the views of these negative theories. Chapter 2 will base on the introduction of the different countries' voting trust system and analyzes the basic theories of voting trust. Voting trust opens out the value of shareholder voting and induces the second separation of shareholder right after the first separation of shareholder's ownership and management right, which discloses the essence of the capital of shares deeply.On the basis of learning form and judging the concrete system of American voting system, Chapter 3 will point out the mainly format and substance requirements of voting trust. Voting trust contract decides the relationship of the parties. The system of voting trust is a strict and flexible institution, which provides freedom of corporate autonomy.Essentially, voting trust is to perform the voting right by means of trust, and to realize the purpose to dominate of the corporation through the re-arrangement of the stockholder's voting right. When the stock holder's voting right combines with trust system, it extremely expands the freedom of exertion of the stockholder's right no matter how is subjectively or objectively. As the centre of the dominant right of companies, the different functions can be realized and the different requirements of the party concerned can be satisfied through the creative design of voting trust. Certainly, the beneficial function, which is able to be realized by the system of voting trust, is limited by the imagination of people. Chapter 4 will especially discusses the special application of voting trust in China and take into consideration how to perfect our voting trust system and have a conclusion that we should constitute the specific regulations of voting trust according to the formation of the clause of Corporation Law, and have a discussion on their function and content. Besides that, this chapter reflects upon the perfection of Trust Law, Anti-monopoly Law and administrational system of the shareholder's rights in our country.In term of trust, voting trust has the characteristics of flexibility and elasticity the trust system owns to make the system possess the space of imagination and creation. However, it decides the multiplicity and complexity which is bought by the performance of the voting right. Therefore, the last Chapter will summarizes the article and makes a conclusion, at the same time, which shows that the rightness, comprehension and practical effect will be necessarily checked and complemented by the future voting trust nowadays of not extensive applying the voting trust in China under the shortage of cognition and examination of the domestic practice. This article also expects that voting trust will have an extensive application in China and make it play the positive role on our economical development.
Keywords/Search Tags:Trust, Voting Right, Voting Trust, Institutional Economic, Corporate control
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