China Shareholders' Voting Rights To Exclude System

In the modern corporation system, the majority-capital-decide principle is not only an established model, but also confirmed by legislation of corporation law. However, this principle results in the deprivation or negligence of the interests of medium-and-small-sized share holders by those who own the majority of the corporate capital. With a view to protecting the rightful interests of the medium-and-small-sized share holders, countries around the world are making active efforts to establish relevant policies to counteract the consequences of the majority-capital-decide principle. The best approach is to establish preventive policies against the abuse of the majority-capital-decide principle, it is the principle of excluding-voting-rights of share holders. Although it was included in the Corporation Law of China enacted in 2005, the principle of excluding-voting-rights of share holders was impractical due to its ambiguity.This article tries to use the method of compare identification .This paper intends to investigate the root causes of dissimilation of the majority-capital-decide principle by conducting a case study in order to illustrate the necessity of establishing the principle of excluding-voting-rights of share holders.Meanwhile, an analysis of the relevant articles of law in the overseas principle of excluding-voting-rights of share holders helps complete the principle of excluding-voting-rights of share holders of our country.Besides, the paper also conducts an in-depth analysis of the relevant regulations on excluding-voting-rights of share holders of our country and of the advantages and disadvantages of the current principle of excluding-voting-rights of share holders of our country before advancing suggestions for improvement. The present paper is divided into four sections:Part 1: Identification of the Problem. 1. The dissimilation of the principle of the majority-capital-decide. Dissimilation of policies refers to its deviation from or opposition to its original nature and purposes due to some reasons. The ever-changing economic environment and the increasingly complicated corporate decision-making have rendered the principle of the majority-capital-decide dissimilatory and deviant from its original intention. 2. Reflection on the approaches to the protection of stock rights against this background. By analyzing the root causes of the principle of the majority-capital-decide with, the paper suggests that the preventive measure is to establish the proactive policies, it is the principle of excluding-voting-rights of share holders. Theoretical bases are also sought out from various perspectives. In the meantime, the paper reiterates the rationality of this principle by refuting the prevalent point of views proposed by the academic circle on opposing the establishment of the principle of excluding-voting-rights of share holders.Part 2: Case study of the legislation of the principle of excluding-voting-rights of share holders overseas. 1. Relevant legislations in major countries and regions overseas. 2. Argument over the value of the foreign principle of excluding-voting-rights of share holders.The questioning of the principle of excluding-voting-rights of share holders originates from the revision of the relevant laws by Germany and Japan. An examination of the social background of legislative revision reveals that the legislative modification ensues not from the lack of its legislative values but from the lack of protective systems for implementation. 3.The sphere of application concerning the principle of excluding-voting-rights. Two problems hold great significance in this respect: one is the selection of. The other is concerned with the selection of sphere of application. The latter mainly concerns itself with the definition of. Views on this can be classified into three categories: Legal interest ,Special interest ,and Personal Law.Part 3: Analysis of the principle of excluding-voting-rights of share holders of our country and its defects. 1. Comment on relevant laws concerning the principle of exclusion. There have already been some regulations on the principle of excluding-voting-rights of share holders. In 2005, the sixteenth provision of the new corporate law established the principle of excluding-voting-rights of share holders again, which is arguably a step forward in legislation. However, problems still exist in these provisions. 2. An in-depth analysis of the defects in the principle of exclusion reveals the root causes are incorrect orientation of the values of the system and incompletion of the system.Part 4: Completion of the principle of excluding-voting-rights of share holders of our country. 1. The structure of the system. Firstly, the system and it should be rightly oriented. The principle of"Residual Claim"and"Reducing the cost of collective decision-making"will be implemented. Secondly, the framework of the system shall be completed and systematized. 2. Specific analysis of the structure. Firstly, the problem of identifying the exclusion of subjects in the trustee-and-trusted relationship will be dealt with and the idea of the control force of the right to vote is forwarded.Secondly, the sphere of application of the excluding-voting-rights of share holders will be holistically understood. The paper identifies the of interest our country as generalization combined with particularization and the interested relations as.Thirdly, planning of the sphere of application for the principle of exclusion. Finally, the paper proposes a renovated process of application for excluding-voting-rights of share holders and tentative suggestions on the completion of remedy by devising...