On The Improvement Of Shareholder Derivative Action System In China

If a kind of law system can not be effectively used in the society, it will be like a piece of blank paper. In China, the one hundred and fifty-second of the new "Company Law" which was passed in October in 2005, for the first time, sets up shareholder derivative action system.This system has the meaning of milestone. It fills the blank of legislation in our country and provides legal protection for medium and small shareholders remedy their rights. However, due to the system existing many defects and traditional culture restricted in China, China's shareholders derivative action system is shelved, so it is difficult to play its proper role. Judging from the system design, the lack of incentive mechanism leads to lack of enthusiasm for shareholders lifting up the lawsuit while the imperfection of restraint mechanism leads to the injustices in fact, so that it has no function of constraint. By contrast, it refuses the goodwill shareholders out of the door. From the situation of China, the traditional thoughts still affect the behavior of people about suit. However the change of the traditional ideas is not possible to happen in one night, instead, it needs a long process. Starting from the motivation and restraint mechanism, this paper analyzes the existing problems of our shareholder derivative action system and the necessity of perfect. Finally, the author puts forward the relevant legislative suggestions. The article is divided into four parts.The first part states the basic theory of the shareholders derivative action system. It includes the origin and defining, features and functions about the shareholder derivative action system. Also it states the difference with the direct action.The second part analyzes the existing problems about our shareholder derivative action system from the lack of incentive mechanism and imperfect of restricting mechanism. Among them, the lack of incentive mechanism include:no litigation preferential fees policies, not giving to the winning plaintiffs compensation rights, not giving to the winning plaintiffs claim directly and not distinguishing the plaintiffs liability to pay compensation. The imperfection of constraint mechanism include:not perfecting the plaintiffs qualification restrictions, not limiting the plaintiffs sanctions rights and not setting up the conditional guarantee system of the litigationThe third part analyzes the necessity to perfect our shareholder derivative action system. Among them, the importance of incentive mechanism include:the need to Perfect the corporate governances, the need to protect the interests of small and medium shareholders, the need to improve investor shareholders and to change our traditional ideas. The necessity of constraint mechanism includes:the demand to prevent lawsuit abuse, the requirement of the normal operation of the company and the requirement of the reasonable use about the judicial resources.The fourth part puts forward the related suggestions about the above problems. First, construct the incentive mechanism:carrying out the lawsuit fees preferential policy. Giving to the winning plaintiffs compensation rights and claim directly subject, distinguishing the losing plaintiffs liability to pay compensation. Second, perfect the restriction mechanism:perfecting the restrictions of the plaintiff qualification, limiting the plaintiffs sanctions rights and establishing the conditional guarantee system of the litigation cost.