The Study On Shareholder’s Representative Litigation Of Different Jurisdictions

Shareholder’s Representative Litigation means that where the corporations neglect ordeny bringing a lawsuit after their interests are infringed by the director, supervisor,manager and others, the shareholders can bring such a lawsuit for the interests of thecorporation in their own names. Shareholder’s Representative Litigation is playing animportant role on the improvement of corporation structure and relief to shareholders.Now Shareholder’s Representative Litigation has been adopted by most of countriesor regions.In China, there is no rule about Shareholder’s Representative Litigation before1993,and the different attitudes towards such suits led to lots of difficulties for shareholders.The new Corporation Law adopts the system of Shareholder’s RepresentativeLitigation, but the regulations are simple and strict. For that reason, focusing on theplaintiff, this article will discuss the litigation foundation, qualification of plaintiff,limitation to procedure and encouragement to plaintiff. I will discuss the system ofShareholder Representative Litigation in the states of USA, Britain, Germany, Japan,Korea, and Taiwan, and put forward legislative proposals to Chinese CorporationLaw. I believe that, in China now, the attitude to Shareholder Representative Litigationshould not be suppression but encouraging. Therefore the law should relax restrictionstowards Shareholder’s Representative Litigation. Indeed, some limitation should beadopted to limit the malicious litigation.This paper is divided into Preface, Text and Conclusion. And the text includes fourchapters, they are as follows:Chapter One will discuss the foundation of Shareholders’ Representative Litigation.This chapter focuses on the definition, origin, character and effect of Shareholders’Representative Litigation. And then, I will discuss the foundation of litigation rightsfrom the view of substantive law and procedural law.Chapter Two will enumerate different regulations about Shareholders’ RepresentativeLitigation in other countries and regions to discuss the qualification of plaintiff. Thischapter includes three parts: part one discusses the holding period and proportion; parttwo discusses the request to the subjectivity of shareholder; part three discuss Chineseregulation and put my suggestion.Chapter Three will discuss the procedural limitation to avoid malicious litigation. Thischapter includes the request before suit and its exemption, the rights to reject andterminate the litigation belonging to corporation, the system of warrant to litigationcosts, the limitation to compromise and withdraw.Chapter Four will enumerate some measures to encourage the shareholders to file theShareholders’ Representative Litigation.After above analysis, I emphasize my opinion: In China now, the attitude towardsShareholders’ Representative Litigation should not be suppression but encouraging.We should search for the balance of encouragement to just litigation and suppression to malicious litigation, to realize the purpose of system of Shareholders’Representative Litigation.