Reseacrh On The Protection And Remedies For The Right To Dividends Of Shareholders

Corporate system---as the human creature, has been flourishing since itsinception because of its unmatched superiority. In the commercial affair area, thecompany's important position as the foundation and kernel of commercial affairorganization is self-evident. Besides, as the commercial subject, the company willnecessarily aim at the profit. Whereas the Corporation Law has become anindispensable instrument to implement the democracy in the company and equalitybetween shareholders, the basic principle of the Corporation Law----under thepremise of the majority of shareholders' rule, interests of minority also need to beprotected effectively. The phenomenon of suppress, cheat, squeeze-out towardminority shareholder by the majority must not be allowed inside thecompany---should be fully respected and implemented. Otherwise, the foundation ofthe company's lasting stability and steady development will be lost, the minorityshareholder will face the danger of benefits lost.The right to dividend of shareholders, also known as right to dividenddistribution, is the core of stock right. It is an important distribution method of profit.Shareholder's distribution of profit concerns various interested parties, also, theparties with different position and expectation hold diverse result about the dividenddistribution. All these make the dividend distribution become the focused area ofinterest conflict in the Corporation Law. In the Corporation Law, The right todividend in the limited liability company is characteristic of close-end and personaljoint. The shareholder of the limited liability company has the right to acquire profitbased on proportion of capital contribution. Due to inadequate market mechanism anddeficient credit system, majority shareholders are likely to infringe on minorityshareholders' right to dividend distribution. The principle of "Majority CapitalSpeaks" abused by the majority shareholders has harmed the benefit of the company and the minority shareholders, which influence the capital and social base fordevelopment of the limited liability company, thereby affecting corporate prolongedstability.The revised Corporation Law of our country after2005has already involvedspecial protection for the limited liability company, such as the right to repurchaserequest of dissent shareholders, controlling shareholders fiduciary duty, share transfer,invalid resolution or revocable litigation of shareholder general meeting, etc. Butthese protections also have their own defects. especially to the liability company,based on its particular characters,Such as close-end and personal joint. shareholdersof the limited liability company do not get enough legal attention and protection fortheir own special position and rights, particularly the right to dividend distribution ofminority shareholders. Meanwhile, in theoretical circles, research on the right todividend distribution of shareholders in close-end companies fall behind the needs ofpractice. The scholar and legislator in our country haven't been paid due attention tothe problem of right protection to dividend distribution of minority shareholders inthe limited liability company. First, both in theory horizon and judicial practice, theprotection toward minority shareholders' right to dividend distribution basically comeinto effect with the benefit of hindsight. The regulation of redemption right, forinstance, it is up to the courts to confirm the invalid resolution on distribution ofprofits as well as transfer or revocation of share. All these regulations as the remedialmeasures are taken after shareholders have suffered damage on the right to dividenddistribution, the interests-damaged shareholders struggle with passive disadvantage.Generally speaking, regaining damaged right is much more difficult than preventing,therefore, it has some realistic significance to seek defensive protection strategy onthe right to dividend distribution. Secondly, from the operational level, there are lotsof questions for the introduction of litigation system about mandatory distribution ofprofits. Thirdly, theorists in our country commonly have not fully realized the abstractright to dividend distribution which also has litigable quality.The improvement of Corporation Law should not be acted blindly, alsoappropriately absorbs the advanced legislation experience of foreign countries. TheCorporation Law of our country mainly takes note of continental law system, whereas corporation law in Anglo-American law system has more detailed and specificregulation, both judicially and operationally, to protect shareholders' interests. Themerits we can learn have practical significance to improve corporation law in ourcountry. On the subject of right to dividend distribution of minority shareholders,mature legislation system has been established in foreign country, the most typicalone is the regulation of unfair prejudice relief in United Kingdom Company Act.Unfair prejudice relief, which plays an irreplaceable part in maintaining minorityshareholders' rights and interests, is one of the most important systems to remedyshareholder in United Kingdom Company Act, Right of mandatory dividenddistribution under Corporation Law in America is the most direct remedy mechanismfor the right to dividend distribution. It provides a litigation opportunity of equitableremedy for interests-damaged shareholders under the condition of rights remediedand not withdrawing from the company. The legislation of mandatory dividenddistribution has obvious advantage, in the Corporation Law of America, it is createdand confirmed in the form of case law. With strong flexibility,it is adaptable to themore complicated litigation procedures. This is a valuable reference for the legislationpractice in our country.Therefore, the theoretical value of this thesis is as follows: First, research onright to dividend distribution of the limited liability company makes perfectimprovement of company law legislation, fills the gap of research on this subject inour theory circle, and promoting the long-term development of company. Secondly, itstrengthens the protection for the minority shareholders' legitimate rights andinterests in the limited liability company, enhances the confidence of small investor.Meanwhile, it also standardizes the company's management, optimizes the company'sgovernance structure, and promotes the prosperous development of Americaneconomy.