On The Conflict Of Extraordinary General Meeting (EGM) Convening Rights

With the development of Company Law in China and the release of the newCompany Law and relevant Judicial Interpretations, China has made considerableprogress in protecting shareholders’ interest and maintaining the independency ofcompanies. However, without more detailed provisions for Extraordinary GeneralMeeting (EGM) Convening Rights in the new Company Law, unnecessary argumentsmay be raised in practice. Many scholars have conducted researches and discussionson the subject on the theoretical basis and put forward proposes based on comparisonbetween regulations of various countries. Nonetheless, regarding EGM ConveningRights’ conflict types and solutions, no integrated categorization and summarizationhas been carried out yet. Therefore, how to reconcile the conflicts relating to theprocess of convening EGM and develop an integrated system of solutions has becomethe key to the research on the subject. This paper will focus on EGM ConveningRights regarding private companies only, and will also discuss and analyze thedefinition, basic elements, conflict types and solutions of EGM Convening Rights forthe purposes of deepening the research on the practical aspect of EGM theory andmaking humble contribution to the resolving of relevant problems such as inadequatetheories, summarizations and detailed regulations in China.This paper will be divided into five parts. The first part will introduce thedefinition of EGM Convening Rights. Based on relevant legal theories of companylaw and discussions conducted by various scholars, this part will point out that thereasonable definition of EGM Convening Rights should be: the rights for qualified persons to convene EGM including the logic intentions of convenor, conveningsituations and convening notice. Meanwhile, this part will also briefly explain ofEGM Convening Rights (private right, minority shareholders’ right and member’sright). The second part will discuss the basic elements of EGM Convening Rights.This part will summarize the regulations on EGM Convening Rights wishing to shedsome lights on Chinese regulations by introducing the legislative experience of othercountries. Referring to legislations of United States, England and Japan, this part willfurther illustrate issues including the priorities of convenors, the identification ofconvening situations and the content of convening notice. The third part willsummarize the conflict types related to EGM Convening Rights and the causes forsuch conflicts. In practice, the complexity of company structures and composition ofshareholders often gives rise to conflicts related to EGM Convening Rights. This partwill categorize conflict types according to established classification of companyinternal contradictions and briefly discuss possible solutions for the "double-headedgeneral shareholders’ meeting" issue. The fourth part will mainly discuss theaffirmation problem of EGM Convening Responsibilities caused by inadequacy oflegislative theories in China. This part will sum up the responsibilities that the boardof directors, the board of supervisors and minority shareholders shall bear on specificoccasions where certain EGM convening conflicts occur. The fifth part will analyzethe situation where EGM convening conflicts cannot be reconciled by regular meansthus leaving shareholders or the company the final option: quit or liquidate thecompany. The paper will mainly focus on the summarization, discussion and analysisof different conflict types arose from EGM Convening Rights, wishing to identifyrelevant solutions so as to enrich both the practical and theoretical aspect of thesubject.