Discussion On The Protection Of Minority Shareholders' Rights In Limited Liability Companies

Due to the closure of the limited liability company, the majority rule seems been abused nowadays. The disputes between the shareholders are quite common and the problems that majority shareholders infringe the interests of the minority shareholders are raised. This paper is to analyze the minority shareholder's information rights/ share repurchase rights and the right to call dissolution of the company so that we can know the reason why the minority shareholders would been infringed and how to protect their rights base on law. Different countries have their own remedy model to protect these minority shareholders according to different legal tradition/rules and the legal practice. This paper will compare the different remedies about how to protect minority shareholders in the limited liability companies between the common law system/civil law system and Chinese law. The author concludes basing on the comparison that Chinese company law regarding to the protection of the minority shareholders need to be developed in both therapy and practice and it is necessary for us to learn the mature legal therapy and practice from other countries.This paper has five parts.The first part is to reveal, in present Chinese legislation, how to protect the minority shareholders'rights; especially in the information rights/ share repurchase rights and the right to call dissolution of the company. The representation showing that the minority shareholders'rights are infringed in practice.The second part is to remind the base and important meaning to protect those minority shareholders'rights; therefore legislation regarding to the protection of those minority shareholders in the limited liability is quite necessary.In the second part, the difficulties that the minority shareholders face when they want to protect their rights based on Chinese present law are revealed. The author compares the legislation in common law system and civil law system regarding to the protection of minority shareholders, and concludes that Chinese legislation is far from perfect.The third part is to compare the legislation on protection of minority shareholders'rights both in common law system and civil law system.The fourth part is to conclude the deficiency in Chinese present legislation regarding to the protection of minority shareholders'rights, especially in the information rights/ share repurchase rights and the right to call dissolution of the company.In the final part, the author raises several suggestions in order to develop the Chinese legislation aiming to protect minority shareholders in the limited liability company. The suggestions are still considering about the minority shareholders'information rights/ share repurchase rights and the right to call dissolution of the company. The author also emphasizes that not only the substantive law needs to be developed but the procedure law as well.On the whole, the author thinks that Chinese legislation is far from perfect in the aspect of protecting the interests of minority shareholder. We need to learn the advance legislation form other countries and meanwhile we should consider our present condition, including the characteristic of our economic development, so that we can really protect those minority shareholders by developing our legislation.