On The Protection Of Minority Shareholders' Equity Of The Company Under The Stalemate

The protection of minority interests has been hot in the Companies Act. Some foreign countries studied more thoroughly to this question, China also promulgated the new Company Law to strengthen the protection of minority interests in2005. But facing the emerging new issues, the law is difficult to deal with it smoothly. Most of our companies are closed, the shareholding of closed companies lack of liquidity, of trust and cooperation relations between the shareholders, shareholders often directly involved in the company management or directly elect representatives of their interests indirectly involved in the company management. Shareholders conflict makes the basis for cooperation between complete rupture, then the deadlock is very easy to produce. The current legal system of our country provides corporation the deadlock and the minority shareholders respectively, and doesn’t mention how to protect the interests of minority shareholders when the company deadlock occurs.On how to improve the protection system of minority interest in company deadlock, this paper presents the following comments:The first is to improve the decision-making mechanisms of participation of minority shareholders. Only shareholders have a say in the affairs of the company and have the right to speak to the company’s business decisions have a real role, other shareholders may be consider the interests of the shareholders. This requires the design of the voting rights of shareholders of our companies, and large shareholders and minority shareholders to maintain a certain balance on the right to speak, to prevent violations of the rights of minority shareholders of large shareholders.The second is to improve the company’s information disclosure system. Information disclosure system is the core of the modern market, only through fully public company information to prevent the company properly, in order to protect the legitimate rights and interests of the shareholders and creditors. Introducing information disclosure system is necessary and irreplaceable in the process of corporate governance. Firstly, market information is not complete. Secondly, market information are asymmetry. Finally, market information has the characteristics of public goods. The third is to establish the system of expert review. Experts involved in the interests of the merged company, a separate exercise their powers to review the merger materials and submit a report to shareholders and creditors. The system of expert review is the most prominent role is to oversee the merging process, more effectively protect the legitimate rights and interests of minority shareholders and creditors. It can strengthen the professional services of the company’s major business decision-making process, to help minority shareholders a better understanding of the pros and cons of the company’s major events, to help them make the right decisions and judgments, and effectively protect their interests.The fourth is to improve the dissenting shareholder appraisal system. The basic rule of the measure is that in some transactions, the dissenting shareholders may request the court to pay the fair value of its shares to exit the company; If the company does not pay, the dissenting shareholders may request the court to pay the fair value of its shares to exit the company In foreign legal literature, it is often with "appraisal rights" means the share repurchase claims.The fifth is to improve relief mechanism of minority shareholder, including litigation and non litigation. The main mode of action can be taken direct action of shareholders, shareholder derivative litigation, and the introduction of class action measures; Non-litigation can through the development of the minority shareholders of investment funds, the establishment of the Society for the Protection of minority shareholder rights and interests and other non-litigation to resolve.