Study On The Legal Regulation Of Company Actual Controller

Corporation Law was revised in2005, marking the end of the vacancy of actualcontroller legal regulation. Corporation Law sets regulations over the concept of actualcontrollers and their responsibilities for the abuse of control rights; other regulatorydocuments also have relevant provisions over actual controllers. With the development ofpractice, we should further improve the normative system of the legal regulation of actualcontroller in China.This paper starts from the relevant fundamental theories of actual controller,introduces the actual controller legal regulation mode and relevant systems inextraterritorial companies, points out the current situation and existing problems of suchlegal regulation in China and then, draws abroad legislation experience to put forwardcorresponding advice for perfection.The first part of this paper states the fundamental theories of the laws andregulations on actual controller of a company, including the meaning and the necessity ofregulating the actual controller. Actual controllers are diverse in type, includinginvestment-oriented actual controller, agreement-oriented actual controller, voting rightoriented actual controller and so on. The necessity of such regulation is embodied in thepreservation of the benefit of other benefit subjects, the perfection of the corporategovernance structure and the unity of the rights and responsibilities of actual controllerand so on.The second part introduces the regulation mode and relevant systems of the actualcontrollers in extraterritorial companies. Extraterritorial actual controller regulation modeis mainly divided into the following three types: integrated regulatory system mode with“Control” as its core; integrated regulation mode with “Enterprise Group” as its core andintegrated regulation mode with “Directors” as its core. These three models providereference for the perfection of the actual controllers’ legal regulation in companies ofChina.The third part introduces the current situation and the existing problems of actualcontroller legal regulation of companies in China. Identify that our country adopts theindependent actual controller regulatory system mode. Pointing out our present law’s on actual controller. Our current Corporation Law on actual controller regulatory system has the following major defects:the demarcating of the concept of the actual controller is unscientific; actual controller’s independent regulatory mode has defects; lacks the clear provisions on fiduciary duty; relevant systems are not perfect; the relief of the loss caused by the controller’s abuse of rights is not comprehensive enough.The fourth part provides, combined with China’s national conditions and the status, with some suggestions for perfection and improvement on the basis of the previous analysis of shortcomings and defects as well as of the experience of extraterritorial legislation. Such suggestions include:first, the amendment of the concept of actual controller. This paper also put forward the responsibilities that the actual controller should undertake; second, learning from exterritorial company’s regulation system of actual controller; third, gives the way for relief of the loss caused to the related benefit subjects by actual controller’s abuse of rights.