The Comparative Research On The Pre-suit Requirement Of Hareholders’ Derivative Suits

The shareholder’s derivative suit originated from the Common Law. It meansshareholders with statutory qualifications can sue the offenders in their own name when thecompany is indolent or declines to prosecute the offenders. The Shareholder’s derivative suithas become the important tool of protecting minority shareholders’ lawful rights andcompleting the corporate governance structure since its birth in the nineteenth century.However, the company has independent personality as well as a small number of shareholdersmay abuse shareholders’ derivative suits. It needs to limit the application of shareholders’derivative suits. Otherwise it may lead to the improper interference with normal operations ofthe company and violating the intent of legislative. The pre-suit requirement of shareholders’derivative suits is used to limit derivative suits and achieve its original purpose. It means theshareholders must request particular company authorities to sue the offenders before bring aderivative suit to the court. The shareholders are able to bring a derivative suit to the courtwhen company refuses to sue the offenders or replies in excess of the deadline. China has nolegal provisions of the shareholder’s derivative suit in a long time until revising the CompanyLaw in2005.The pre-suit requirement is mainly regulated in article152of2005CompanyLaw. But the article itself is so general that many problems in practice haven’t been solved. Inorder to fix the existing provisions about shareholders’ derivative suits, this paper will discussthe theoretical basis of derivative suits and pre-suit requirement, make a comparative researchon the specific systems of derivative suits. This paper will make several improvementsuggestions about the pre-suit requirement of derivative suits, hoping it make sense.The introduction of this paper leads to the topic of study, including the purpose of study,the overview and innovation of study. The conclusion part summarizes the basic view of thispaper in the end. In addition to the introduction and conclusion, it’s divided into three parts.The first part is the basic theory of shareholders’ derivative suits and pre-suit requirement.This part dissertates mainly about the concept and development of derivative suits as well asthe theoretical basis and system value. Subsequently it leads to the pre-suit requirement whichis the topic of this paper. On the basis of comprehensive analysis of pre-suit requirement’sconcept and theoretical, it indicates the system value about pre-suit requirement.The second part is the comparative analysis of pre-suit requirement’s specific systems. Itbegins to discuss several specific systems about pre-suit requirement. This part is mainly about the comparative research on the precondition, applicant and the accepting organ of thedemand. Meanwhile, it involves comparative research on the form and content of the pre-suitrequirement, the deadline and exemption, and the effect of the decision made by the organ.The third part is the reflection and improvements about our country’s pre-suitrequirement. On the basis of basic theory and comparative analysis of specific systems, it willmake several improvement suggestions about the pre-suit requirement.