Analysis Of The Protection For Abstract Dividend Distribution Right

Dividend distribution is the core of the shareholders’ assets profit reflected the provisionsof article4of the "company law", is the core of shareholder rights, also is the ultimatepurpose that shareholders participate in company by equity investment. In beneficial rights ofshareholders, dividend distribution is the most valuable right for the shareholders especiallyfor the plaintiff not participating in the management of company. Arguably, dividenddistribution are the final point in the company management right, right to know, right ofshareholder lawsuits and other rights. Dividend distribution can be divided into abstractdividend distribution and specific dividend distribution. The abstract dividend distributionright is one inherent right enjoyed by shareholder and does not allow to be deprived bycorporate governance institutions or the company’s articles of association.This article selects Guangzhou henghe company v. Guangzhou juntai propertymanagement company, juntai department store, junhao company and jungang company. Thecase in dispute of dividend distribution is quite representative. From Guangzhou Intermediatepeople’s court’s support of plaintiff to Guangdong high court’s cancellation of first-instancejudgment, we can conclude the core focus of the case: abstract dividend distribution rightwhether or not can been prosecuted. Analyse the current "company law"’s approaches torealize the right of dividend distribution claim, such as equity transfer, stock repurchase,request dissolution of the company and so on, to determine whether these pathways areenough to protect shareholder’s dividend distribution right. Analyse actionable property ofdividend distribution, in the case of its actionable property, then analyse some closely relatedissues:such as the statute of limitation, the determination of plaintiff and the defendant’seligibility, the allocation of the burden of proof in litigation and court judge standard, etc.Through analysis of protect path for shareholders’ dividend distribution right,we can findthat whether transfer of shares, the exercise of share repurchase claims, request the court toconfirm the shareholders’ committee resolution invalid or revoked, or loyalty constrain bycontrolling shareholders fiduciary duty, or even request a company dissolution, are notenough for relief and protection of the shareholders’, especially minority shareholders’,abstract dividend distribution right.These protection pathes with negative common feature arenot so much relief approaches for dividend distribution as the no options of denying the actionable nature of the abstract dividend distribution.Whether inspecting nature of theabstract dividend distribution, or observing judicial practice of the Anglo-American lawsystem and the civil law of France experience, you can see that the actionable property ofabstract dividend distribution is no doubt. Abstract dividend distribution as the core content ofshareholders’ earnings, naturally have to get a return by investment.In this sense, if the lawdoes not give it actionable properties, that is a rejection of shareholders’ assets profit ability.That cannot be established in theory, and in practice that has contributed to the capitalmarket’s speculation. Court in hearing the case should adhere to the "tolerance" ofintervention, so as to ensure the dynamic balance between private law autonomy and judicialintervention. Shareholder qualification shall be the only condition used as judgment ofwhether or not having right to appeal, no matter how much the number of shares held by theshareholders and the length of a stake. Due to information asymmetry between sufferingshareholders and company, burden of proof in reasonable dividend policy shall be allocated tothe company.