On Restriction Of Shareholders’ Rights

As we all know, the rule of law to promote rights-based concept, but perhapspeople are more concerned about how to direct protection of rights, does not knowthat, by setting the right to limit and sometimes better able to protect rights, and thesubject of rights to be protected is not a single subject, and will not let the law into atool of protection of individual human. It is the expression of this concept, by settingrestrictions on the rights of shareholders, to achieve coordination of the two majorconflicts of interest the main relationship,(conflict of interest of large shareholdersand small shareholders coordination and the coordination of the shareholders andcreditors of a conflict of interest). And reached a purpose, as pointed out in one ofthe "Company Law" to regulate the organization and behavior, protect the legitimaterights and interests of the company, shareholders and creditors, safeguard social andeconomic order, promote the development of the socialist market economy ", thearticle adhere that the stakeholders on the Company Law is not a single, and there isa conflict between them,"Company Law" must shoulder the mission of equitable tothe interests of various stakeholders. The article to talk about instead of focusing onthe protection of said protection, and the limited protection from Tan novel point ofview on the purpose of protection of shareholder rights and creditor rights, so thisarticle topics is positioned as "limitation of shareholders’ rights.The article pointed out that limit shareholders’ rights, including internalconstraints and external constraints, limited restrictions and completely restricted,and that the identity of the shareholders is different from the shareholders’qualifications, the identity of shareholders that it is the shareholders’ rights to enjoythe premise, and then to have or not the identity of the shareholders for the verticalboundary points restrictions and the rights of shareholders from the shareholders’rights to enjoy the exercise of the restrictions on the two point of view on the path tothe shareholders the right to limit, and further pointed out that the development,proposed to affect the larger types of rights can be agreed upon by the articles of association limit between inside shareholders law there is no need to dictate, andrelates to the major conflict of interest of the shareholders and external creditors,shareholders’ rights must be the point of view of legal restrictions. The articlepointed out the lack of restrictions on the rights of shareholders in the "CompanyLaw" legislation and in practice, including the largest shareholder of seriousviolation of the rights of minority shareholders, the lack of protection of the interestsof the creditors of the company. Further pointed out that the root of the problem isthat the "natural advantage" of the provisions of the Companies Act on the rights ofshareholders, the independent system of corporate personality, the principle oflimited liability and the capital of the majority decision principle. Then elaboratedon the necessity or propriety of the restrictions of the rights of shareholders,including the default point of view from the evil human nature, from the perspectiveof fairness and justice, should be the boundary from the right angle, and angle fromthe natural advantages of the Companies Act the rights of shareholders. Alsodiscusses the basic principles and legal requirement to limit shareholders’ rights.Finally, this paper proposed the system to limit vision to improve shareholders’rights in China, first, that the scope of application of the system of corporatepersonality should be appropriately expanded. Damage the interests of creditors isthe behavior of corporate behavior through the company’s resolution to make theminority shareholders of the resolution to abstain from voting against the case, thelargest shareholder abuse of the rights of shareholders should bear the primaryresponsibility or all responsibilities, should be allowed to shareholders to recover itsmajor shareholders should not pay for that part. Should be expanded at the sametime the subjective purpose of the scope of the abuse of shareholders’ rights toshareholders, and should not be limited to evade the debt on the same time do notthink it emphasizes the element of "serious harm" results, as long as the creditor isable to adduce evidence to prove shareholder abuse of corporate personality andlimited responsibility for the exercise of the rights of shareholders, creditors canadvocate the case of possible damage to the application of the system. Second, thepaper proposes the participation of creditors in corporate governance are reasonable,its theoretical basis derived from the1984Freeman, stakeholder theory. The article put forward the "Company Law" provides that "the creditor shall have the right toattend shareholders’ meeting, to convene a shareholders’ meeting shall notify thecreditors, but creditors the right to interfere in the resolution of the shareholders’meeting to make creditors bear the obligation not to divulge company trade secrets".The purpose of such provisions is the protection of the interests and the interests ofthe creditors at roughly balanced protection status..