The Research Of The Shareholder Inspection Right In The Limited Company

Modern companies separate ownership from managerial authority. Directors, managersand financial executives are in charge of the management and forbid other people to join in,which make the board of directors become the core of the company. In order to require thereal information of the management, shareholders have the right to check the finance. And theright is important to protect the benefits of shareholders. Checking is the fundamental right ofshareholders, which is also a premise for shareholders’ other rights. In China, we have a newlaw-“Company Law” to regulate the system of shareholders’ checking, but the rules are toodoctrinal, lack of specific regulations to perform. In fact, the understanding varies fromperson to person, leading to a lot of argument. The actual legislation is opposed to the purposeof the law. This paper aims to put forward suggestions with improving the inspection byanalyzing typical cases as well as the difficulties they reflect. In the process of writing,methods such as comparison, historical and systematic analyses are adopted.This paper is divided into four parts:The first part mainly introduces the reason of the lawsuit and the detail, pointing thatdual parties focus on whether shareholders have rights to check accounting document andhow to affirm shareholders’ proper purpose.The second part is about the conclusion. Before answering whether shareholders cancheck accounting documents, we need to confirm the quality of shareholders and the scope oftheir rights. This part states the definition of the inspection and its right, pointing the qualitiesthat shareholders should process. Shareholders’ Inspection Right section refers to shareholderscan inspect companies’ information and important materials. The subject of the implementshould be the companies’ shareholders. In terms of whether shareholders have the inspection,the author analyzes the question from the explanation of literal, systematic, historical and thepurpose of the legislation. Generally, shareholders won’t check Accounting Documents,unless shareholders have the evidence to prove there are unreal information in the AccountingBooks.And then we talk about how to make sure that shareholders check AccountingDocuments with the Proper Purpose. The Proper Purpose refers to shareholders inspecting Accounting Documents with the purpose of kind and proper. They want to protect theirbenefits in the company. If companies refuse shareholders’ request, they need to provideevidence to show the inappropriate intention of shareholders. If they have no such evidence,they should meet shareholders’ demand. Shareholders should state the Proper Purpose andgive evidence to show that Accounting Books hide some real information. Otherwise, thecompany can refuse shareholders’ request.The final part is the author’s suggestion. In order to protect shareholders’ benefits, thelaw should specify and expand the scope of shareholders’ checking rights, making it clearwhenever shareholders can check Accounting Documents as well as the standard of properpurposes and the distribution of the responsibilities between the company and shareholders.