Research On Legal Problems Of Minor Shareholders’ Qualifications

Qualification as a shareholder, in accordance with the provisions of the Companies Act and the articles of Company Law, is a kind of association identity which is obtained in the cost of contribution to the company. So shareholder’s qualification is also known as shareholder status. Shareholder Qualification is the possibility of legal subjects become shareholders, is a combination of legal capacity and identity to become shareholders.In recent years, the phenomenon of "Doll shareholders" in listed companies and limited liability companies continues to emerge. Then it sparked a big discussion on whether the minor shareholders’ qualifications should be recognized.Opponents argue that: due to the lack of independent will and the necessary decision-making and judgment, minors can’t support the company with good experience or provide intellectual contributions; they also can’t meet the interests of the company’s internal decision-making balance requirements. It is difficult for them to participate in the specific business management affairs; neither can they effectively supervise the company’s operation and management. What is more, they can not effectively understand and analyze their own interests and the interests of the company. However, there has been a considerable part of foreign legislations recognize the qualification of minors as shareholders, and there have been some positive judicial practices and local government policies in China to allow minors become shareholders. Moreover, capacity is only the rule to determine the effectiveness of behaviors, rather than the rule to confirm the main eligibility, so it can not become barrier to minors to obtain the qualification as a shareholder.Minors can obtain shareholders’ qualifications through four ways:inheritance, recipient, purchase of shares and the establishment of a company. When minors become shareholders in any of these ways, they will be faced with legal representatives’ abuse or indiscriminate use of power of attorney. The legal representatives may even behave illegally to damage the interests of minors. The blank or incomplete in Corporate Disclosure, not only violates the principle of continued openness of information, but also help to disguise legal representatives’ unreasonable behaviors, such as illegal holdings, which is unhelpful for the government to conduct market supervision, and may fundamentally undermined the interests of the minors and other shareholders of the company.There is no theoretical barrier for minors to obtain shareholders’ qualifications, but in order to make the minors exercise there shareholder rights smoothly and make the company and the entire market operate efficiently, it is necessary to perfect the whole system. Therefore, in the access to company, a distinction should be made between the one-man companies, limited liability companies and stock limited companies, and strictly limit minors entering the former. We should establish the company registration censorship,limiting the investment scope and amount, so as to reduce investment risk. We should establish the system of independent property of minors, the system of information disclosure of minors’ legal representatives, and improve the legal representative supervisory system, to prevent legal representatives abusing their power and to safeguard the interests of minors and public shareholders.