A Research On The System Of Mandatory Distribution Of Dividends

The main objective of the shareholders of the company to invest is to getdividends, and the right of dividends is the core of the shareholders’ rights. But it isdifficult to realize the right of dividends of the shareholders. The Board abuse thebusiness judgment rule instead of charting profit distribution plans; ShareholdersMeeting misuse the capital majority rule to make their will impose on the company inorder to refuse the resolution of the profit distribution plan; the company extractsexcessive discretionary reserve fund, which causes the company has no profit toallocate. All the misbehaviors mentioned above damage the shareholders’ abstractright of dividends. The mandatory distribution of dividends system is an effective wayof protecting the abstract right of dividends of shareholders. Besides the equitytransfer; the null and void of company resolution and the repurchasing of objectors’shares, this system, which allows the shareholders to protect their own interests whilethey still work in the company, is another way of protecting the minority shareholders.The suability of abstract right of dividends is the premise of the mandatorydistribution of dividends system. No conclusion about the suability of abstract right ofdividend has been made yet. This thesis, which lays the foundation of the Mandatorydistribution of dividends system, demonstrates the suability of the abstract right ofdividend from the perspective of the shareholders’ rights and their appeal rights, andcorporate autonomy and judicial control. Conflict of interests between the controllingshareholders and the minority shareholders, and the contradiction between thedevelopment of the company and the shareholders demonstrate the necessity ofenforcing mandatory distribution of dividends system. This thesis, which emphasizesthe mandatory distribution of dividends system feasibility, begins with an introductionof the mandatory distribution system in the West, and then analyzes foreign classicjurisprudences combining with the main provisions in the system of mandatorydistribution of dividends. This thesis makes a preliminary design of the mandatorydistribution of dividends system, which sets preliminary principles on theprecondition of initiating the litigation of mandatory distribution of dividends, theprocedures, the shareholders’ rights to know, the basis and contents of the court’sjudgment as well as the litigation costs and execution. Minority shareholders canprotect their investment through the way of “voting with their feet” or applying the “stroke silly theory”. On earnings disputes litigation, almost all the defendants areLimited Liability Company. Therefore, the subject mentioned in this thesis is theLimited Liability Company.