The Research On The Protection System Of The Small Shareholders’ Rights And Interests In Company Law

The protection of the interests of minority shareholders is an urgent need tocrack the important issues of corporate governance institutions. Widespread violationsof the interests of minority shareholders in the face of the company’s internalphenomena abound, the reasonable and legitimate interests of minority shareholdersis difficult to protect. At the institutional level, the protection of minority shareholdersthe right to appeal is difficult to achieve, comparing to the controlling shareholder,which occupies majority stake domination and a strong position. And in real termslead to the legitimate interests of the minority shareholders cannot be achieved, eventhe aggravations cannot get reconsideration and solutions.With the continuous development and improvement of the market economy, theinterests of minority shareholders are increasingly subject to social concerns with thesupervision of public opinion, at the same time, this will be contributed to the wishesof the competent authorities to establish rules and regulations of the medium andsmall shareholders, it will play the role of the controlling shareholder and the largestshareholder of the constraints or pressure. This will curb the small and medium-sizedshareholders face a variety of potential threats and the imbalanced state of theinterests, and ultimately preserving reasonable and legitimate interests of minorityshareholders.I believe that, from the legislative point of view, it should introduce the legalsystem to protect the interests of minority shareholders. First, there are laws to protectthe real interests of minority shareholders from the source; second, effectivelystrengthen and maintenance the reasonable interests and aspirations of mechanism ofthe minority shareholders; third, exclude wrongful act against the interests of minorityshareholders and obstacles; four, the interests of minority shareholders faced with avariety of forms and means tort by the controlling shareholders, the board of directors,board of supervisors and senior management.Although the <Company Law> on the protection of the interests of minority shareholders mechanism than ever, with further refinement. However, to protect theinterests of minority shareholders is needed long-term, persistent and continuous,which urgently requires the <Company Law> and its related laws and regulations inthe formulation process, to leave some flexibility in space, to better protect theinterests of minority shareholders.In this paper, on the basis of the necessity of the protection of minorityshareholders, analyzes the protection of minority shareholders, through analyzing thearticles of association of the company, the necessity of protecting the interests ofsmall shareholders, the limitation of the articles of association itself and the basicrestrictions of the principle of equality of shareholders and other content. Thelegislation improvement for the interests of small shareholders and the systemdesigned for their protection, construct the protection of the rights and interests ofsmall shareholders in China. This paper is divided into four parts.The first part is to analyze the necessity of protection of minority shareholders’rights, from how to achieve substantive equality of shareholders equity, the necessityof dispersion and protect the legitimate rights and interests of the shareholders, aswell as the concentration of the controlling stockholders abuse to discuss; the secondpart is the protection of minority shareholders rights in charter, including thenecessity and significance of the protection of minority shareholders, the fundamentallimit to the articles of association of the company itself and the principle of equalityof shareholders, so as to realize the protection form sense and real significance on thelegal status of their rights and interests; the third part is the perfection of legislation toprotect the rights and interests of small shareholders. From the system designed forthe protection of minority shareholders rights and the limitation of the largeshareholders, the relief ways of The legitimate rights and interests of smallshareholders; The fourth part is the construction of the minority shareholder rightsand interests protection system, starting from the substantive, procedural rightsprotection, to establish the advance and the relief mechanism.This paper discusses the theoretical basis of the protection of the interests ofminority shareholders, on the legitimacy of the protection of the interests of minority shareholders, and reflects the legal status of the consistency between minorityshareholders and the controlling shareholder in the company’s articles of association,as well as the design of <Company Law> on the protection of interests of minorityshareholders, the limitation of protection and relief system, build the basicassumptions of the protection of the interests of minority shareholders in China. Thispaper is divided into five parts.The first part is the theoretical basis of the protection of the rights of minorityshareholders, from the substantive equality of shareholders, the scale of corporategovernance and the negative effect of highly concentrated equity; second part is theanalysis of the legitimacy of the protection of the interests of minority shareholders,manipulate the board of directors and shareholders’ meeting, the use of illegal relatedparty transactions against the legitimate rights and interests of the minorityshareholders as well as the lack of reasonable profit allocation method; third part forequal status in the articles of association of the company, depending on theassociation theory and the shareholders qualification theory, and analyze theequality of shareholders’ legal status in the form and substance of sense; fourth part isthe protection of interests of minority shareholders in the <Company law>, designedto limit the controlling shareholder system; the fifth part, the focus of this paper is tobuild the basic assumptions of the interests of minority shareholders protectionmechanism, and to build the advance mechanism and afterwards relief mechanismfrom the substantive and procedural rights protection perspective.