The Rights Limitation Of Shareholders Who Has Defective Capital Contribution

This research paper is based on the case China Guangshun real estatedevelopment company v. Shenzhen Guangshun Industrial Company Limited aboutcorporater solution, and then try to discuss the problem of rights limitation ofshareholders who has defective capital contribution.This research paper is divided into following three parts except for TheIntroduction and The Conclusion:The first part is about the of the effectiveness of the shareholders’ meetingresolution of Shenzhen Guangshun Industrial Company Limited in2001, which is notonly the key problem of this case, but also the base of analysis of this case judgments.And it will focus on whether it is legal that the company limits the shareholder rights.Though the analysis on the problem whether company hold the power to limit therights of those shareholders in the company judicial interpretation third, we arrive aconclusion that the company do not has this power. Therefore, the shareholders’meeting resolution in2001is invalid in Company Law. However, the resolution is anagreement between these attendance shareholders with consensus nuptialis, and is anarrangement of the shareholders for their own rights and obligations. So, theresolution is valid in Contract Law.The second part is to discuss the effectiveness of Shenzhen Guangshun the firstgeneral sharehoders’ meeting resolution in2004, which is the dispute problem in thiscase. This effectiveness problem is mainly about two issues：one is about whether theconvening process of this meeting is illegal；another is about whether the calculatingstandard of total number of voting rights changes. The shareholders’ meetingresolution in2001, as a contract agreement, is binding to shareholders, so the rights ofshareholders who has defective capital contribution is limited and the voting right islimited too. As a result, the proportion of shareholders’ voting rights is more than half.However, this resolution is voidable because of the illegal convening process.The third part is about the critical analysis of the judgments of the first instanceand the second instance. And then this essay will give some suggestions about how toregulate the rights of shareholders who has defective capital contribution, and we believe it is good way to prevent from the risk of defective capital contributionthrough countermeasures in advanced and liability for breach of contact.