A Legal Study On The Defendant Of Shareholder’s Representative Action

Shareholder’s Representative Action is clearly stipulated in Article152ofCompany Law in2006version, providing new relief approach for the minorityshareholders. However, the legal provisions are too principle to judicial practice, andthe Article have not set out specific proceeds which seem like very abstract todetermine the defendant of Shareholder’s Representative Action. With thedevelopment of economic and right-protection awareness of the majority shareholder,the Shareholder’s representative action cases are gradually increasing, showing therelevant research is particularly necessary. In order to provide reference for furtherresearch, the article makes brief analysis of the defendant legislation confirmation、theelements for director, senior management, supervisors as the main defendant, as wellas the relevant relief method. This article consists of the introduction and text. Thetext mainly subdivided into the following three parts:The first part mainly introduces the scope of defendant of Shareholder’sRepresentative Action, summarizes two different legislative forms, that is, the free(loose) defendant form and restriction (strict) defendant form. After evaluates the twolegislative forms, we think five factors shall be considered: the nature ofShareholder’s Representative Action and its supplement application, the establishedgovernance mechanism of the company and the relative supervise mechanisms,lawsuit system design, the legislative concept、the purpose、the history and the currentsituation of Shareholder’s Representative Action as well as judicial practice in other country of the world.The second part is the main contents of this article, selective analyze thenecessity for the director and senior management who implement the company’saffairs, the supervisors who supervise the company’s affairs and the controllingshareholder who control the company to be the defendant, and the essentials thatdefendant should have. Among them, the analysis about the necessity is expandedbase on the special status of above-mentioned person. And the essential is provedbased on subject simultaneous, acts illegality and the losses company suffered.The third part is about the responsibility relief system for the director、seniormanagement and supervisor which includes responsibility reduction, compensationand insurance system. We should improve the responsibility relief system to fulfillresponsibility and enhance the competitiveness for the company, with a premise toprotect the interests of company and minority shareholders.