Research On The Plaintiff Qualification Of Shareholder’s Derivative Action

Shareholder’s derivative action has a unique charming in protecting the company rights especially the minority shareholders’, balancing and improving the cooperate structure,etc. However, it is a kind system which entitles the shareholders extra remedial jurisdiction as the company is under an abnormal situation, which breaks the principle of rightful plaintiff and "Majority Capital Speaks".To some extent,it violates the company independent management and brings risk to the normal operation of company.Therefore, it is of great necessary to-have a deep understanding of this system and design it deliberately. While the key in designing is how to find a critical point between litigation encouragement and suppression. To find this critical point, the most crucial step is to confirm the plaintiff qualification.In our country this system has been introduced into the company law revised in2005and with the developing of the legislation and judicial practice, it has been constantly developed. Judicial interpretation Four (draft) of company law has explicitly stipulates some procedures of shareholder’s derivative action such as the case jurisdiction,the company’s legal status,security for cost,reconciliation,win result disposal,retrial etc. Nevertheless, it is lack of practical operability considering the rule on plaintiff qualification. As a result, the qualified plaintiff is excluded, which goes against the protection of qualified plaintiff and to some degree impair the value of this system. The present thesis is designed to make a systematic and deep analysis on this problem through case study and comparative way. Furthermore, some suggestions about completing the qualifications on plaintiff in China’s shareholders derivative suit system would be proposed.Except the abstract and conclusion part, the analysis is conducted in four parts of this paper.The first part briefly introduces and analyzes the minor shareholders of Sanlian Group Company Case.Through the first case of China’s shareholder derivative action system,minor shareholders of Sanlian Group Company, a brief introduction and analysis are made, by which followed the topic of this thesis.Part two reviews some basic theories in shareholders derivative action system.At first, a brief introduction to the meaning, features and the values of shareholders derivative action system is made.Then, the legitimacy basis for shareholder derived litigation right would be explored from the entity and procedural prospective.The third part analyzes the eligibility requirement of qualified plaintiff shareholders in derivative action.Through the comparative study, advanced legislation examples both at home and abroad will be analyzed and discussed from the range of plaintiff body, formal essentials and substantial essentials in order to offer some help to complete China’s plaintiff qualification system in shareholders derivative action.The fourth part conducts an analysis on the existing problem of China’s plaintiff qualification system in shareholders derivative action and some suggestions have been put forward. At the beginning of this part, the existing problem in the rules about plaintiff qualification regulated in China’s company law has been analyzed and then some corresponding suggestions are proposed.