A Study Of Restrictions On Shareholders’ Voting Rights Of Flaw Contribution

The shareholder’s flaw contribution damages the interests of companies, othershareholders and creditors. Therefore, how to effectively curb the behavior needs tobe solved in theory and practice. The Act of regulations aims to strengthen theliability of flaw shareholders, but with little success. The main reason is that theselaws have failed to touch the voting right which is the core right of shareholder’srights. Shareholder’s voting right is the basic right of the all rights. Theories over therestriction on the flaw shareholder’s voting right cause a lot of controversy, whichleads to a loss in the specific cases. Furthermore, this also can encourage theshareholder’s flaw contribution in practice. From a legal perspective, the flawshareholder exercising voting right in accordance with the full contribution violatesthe principle of the unity of rights and obligations. From the analysis of the specificlegal system, such behavior violates the principles of the company’s capital-basedprinciple, the legislative purpose, the contribution and the articles of association, etc.The shareholders’ voting right is the focus of company’s control which affects thecompany’s overall operations. Therefore, to curb the behavior of shareholders needsto start from the restriction on the flaw shareholder’s voting right. The restriction onthe flaw shareholder’s voting right is inseparable from applicable procedures. Takingit into consideration that this system is directly concerned with shareholder’s votingright which belongs to the company’s internal problems. So the subject to start thesystem should be limited in the company, that is shareholders, the board of directorsand the board of supervisors. In the specific application of the process, the boar d ofdirectors accept the applications and make the appropriate treatment in accordancewith the provisions of the company law and articles of association, etc. Once therestrictions on the flaw shareholder’s voting right made, it will produce a series oflegal effects, including direct effects on the company, flaw shareholders and othershareholders and indirect effects on the related rights of the flaw shareholder, theresolution of the shareholders’ meeting, etc. After the flaw shareholder s’ voting rightis restricted, the effects will contribute to the eradication of the shareholder until theshareholder pay the contribution. The flaw shareholder’s voting right can be restoredwhen the shareholder pay the contribution, but it does not have retroactive effect.