Study On The Legitimate Of The Control Right Oh Limited Liability Company

This paper had comprehensively applied legal theory and economics theory to carry out jurisprudence analysis and system research on the legitimate exercise of the control right of limited liability company by taking the control right of limited liability company as the study object.Corporate control right is a decision-making power with the power and function of management and benefit distribution. The control right of limited liability company is mainly controlled by major shareholder, and mainly exercised by controlling shareholder. The concrete contents of the legitimate exercise of corporate control right include the effective exercise of the management decision-making right of controlling shareholders and the reasonable assignment of control right. The exercise of corporate control right would influence the interest of each stakeholder. This paper consists of five parts.The first part firstly analyzed the basic problems such as the meaning and nature of corporate control right as well as the recognition criteria of controlling shareholder, which laid basis for the following discussion on the reasonable assignment of corporate control right. The control right of limited liability company is not only a management right, but also a kind of benefit distribution right, which has transferability. The exercise of control right by the controlling shareholder of limited liability company should protect such characters based on shareholder, while exercising management right, they should carry out reasonable assignment on such control right.The second part investigated the theoretical basis of the legitimate exercise of control right. The legitimate exercise of the control right of limited liability company is not just for pursuing legitimate value, but also for improving the performance of company and protecting the characters based on shareholder as well as the stability of company. The third part carried out detailed illustration on the concrete contents of the legitimate exercise of control right, and summarized the basic principle for the legitimate exercise of the control right of limited liability company. Such legitimate exercise must observe the relevant regulations of Company Law and the contents of the Articles of Incorporation. Moreover, such legitimate exercise requires controlling shareholders to effectively exercise the control right and reasonably assign the control right. The control right of limited liability company should endow other shareholders the preemptive right in the process of assignment, and when assigning control right to the outside, controlling shareholders must strictly abide by statutory system. Thus it can effectively protect the preemptive right of shareholders and maintain the stability of company.The fourth part firstly started from current theoretical status, and discussed the necessity of assuming fiduciary duty to the company and minority shareholders by controlling shareholders. The fiduciary duty of controlling shareholders is the "transparency" provisions of relevant system for controlling shareholders to exercise control right, which requires that controlling shareholders should not sacrifice the interests of other stakeholders for self interest. The fiduciary duty of controlling shareholders has effectively offset the deficiencies of legal system. This part also expounded on the supervisory mechanism of the exercise of control right. The exercise of control right of limited liability company requires the supervision of shareholders and other stakeholders.On the basis of analyzing the legislation status of China, this paper finally proposed legislation suggestion on the legitimate exercise of the control right of limited liability company. It firstly suggested that the legal status of the control right of limited liability company should be established by Company Law; the fiduciary duty of controlling shareholders should be identified by legislation; and the establishment of supervisory mechanism should be strengthened. Meanwhile, the author proposed legislation suggestion on the system of reasonable assignment of the control right, hoping to provide guidance on the legislation of the control right of limited liability company.