Research On The Pre-suit Requirement Of Shareholders’ Derivative Suits

The pre-suit requirement of shareholders’derivative suits means before bring a derivative suit to the law, the shareholders have to seek relief within the company. Only after the shareholders are unable to find internal relief can they obtain the right of subrogation to the interests of the company. Only then can they be qualified to bring the derivative suit to the law.At present, the design of the pre-suit requirement of shareholders’derivative suits has had a positive significance in maintaining the independent corporate personality and protecting the directors of independent business judgment. It also helps to save litigation costs as well. But there are still some problems which include the following aspects:The first one is the applicant of the shareholders’derivative suits, including the identity of the applicant requirements and share holding requirements. The second one is the accepted people of the shareholders’derivative suits. In this section, I mainly focus on the infringer who is an individual or an organization other than the Board of Directors and the Supervisory Board and or the joint infringement of the Board of Directors and the Supervisory Board. Third, I will discuss the obligation to inform of the company in the pre-suit requirement of shareholders’ derivative suits. The final problem is the exceptions of the pre-suit requirement.For the above four questions, I made the following recommendations. First of all, rather than make rigid restriction for the holding time requirement of the applicants, we should analyze the purpose and motivation of the shareholders that bring the lawsuits. Secondly, when the infringer is someone outside the company, the Board of Directors should be the priority to accept the case. While when it comes to a joint infringement of the Board of Directors and the Supervisory Board, the specific shareholders can directly bring the suit to the law without going through the process of the pre-suit requirement of shareholders’ derivative suits. Thirdly, laws should make it clear about the Board of Directors and the Supervisory Board’s legal obligation of not informing the shareholders without a good reason. Fourth, the exceptions of the pre-suit requirement shall include the following situations. To begin with, the Board of Directors and the Supervisory Board are the joint infringers. In addition, the related property is about to be transferred, making it difficult to implement. Then, the Board of Directors and the Board of Supervisors mutual shielding, not recognizing each other’s infringement, and continue to implement tort. Last but not least, the exercise of the rights of shareholders is about to expire or the statute of limitation of the case is about to exceed.