Research Of Preferred Stock Legal Issues In Entrepreneurial Companies Of China

The current direct provisions of preferred stock have2013years of the State Council instructional advice on the pilot implementation of preferred stock and in March2014the pilot measures for the administration of preferred shares, preference shares in China’s regulation is of great significance, promotes the development of entrepreneurial firms, startup issue preferred stock is of great significance to our country. Due to the business enterprise has its own particularity, investment requirements for start-up companies is directly proportional to the risks and benefits, is very necessary for preferred stock in the startups. Until today in development of foreign system of preferred stock, is very flexible, have important reference sense to the improvement of the system of preferred stock. Our country should adopt the French legislation pattern, namely by the "Company Law" and the company’s articles of association of preferred stock regulation, regulation on the preferred stock, should be treated differently, the obligations and responsibilities for startups to preferred shareholders, preferred stock rights and interests protection question, it must be mandatory provisions, shall be formulated by the "Company Law" in order to protect the interests of the preferred shareholders. In order to strengthen the protection of entrepreneurial enterprises preferred shareholders, at the same time to make up for the shortage of the existing rules to preferred shareholders. protection in China, you can set the preferred shareholders conference system, specific investors demand to the components of the system of preferred stock and improve our preferred shareholders voting rights recovery system, etc., so as to benefit the improvement of the system of preferred shares in start-up companies.Besides introduction and conclusion, this paper mainly consists of three parts:Preferred stock system in China, the first part mainly studies the relevant legal basis, analyzes the legal connotation and characteristics of preferred stock, due to the business enterprise has its own particularity, investment requirements for start-up companies is directly proportional to the risks and benefits. Inevitable for the business enterprise of high risk high return of preferred stock, the characteristics of the business enterprise management team ownership belonging inevitable requirement investors do not participate in the decision-making, preferred stock investment in start-up mode is better than that of other financing way, many preferred sort, enrich the exit of venture capital enterprise, introduction of preferred shares in start-up companies to balance the governance structure of venture enterprises, etc., therefore, necessary for preferred stock in the startups.The second part intends to examine the continental law system and Anglo-American law system represented by France, represented by the United States in the system of preferred stock. On the legislative model of preferred stock, common law mainly is authorized by the company’s articles of association autonomy completely, the company’s articles of association of autonomous regulations related questions of preferred stock, or preferred stock issues to make use of preferred stock contract regulation; Continental legal system mainly through its preferred shares been regulated in the company law, at the same time the company’s articles of association also needs to be clear about these issues, taken at the same time the company law and the articles of association regulation pattern. Priority of preferred stock, concentrated on the right to preferred stock, namely, priority of dividend distribution, distribution and cumulative preferred shares of the company’s remaining property priority, etc., has an important significance to improve the system of preferred shares in China. Due to preferred shareholders usually have no voting rights, often abused its interests, in order to strengthen the protection of preferred shareholders rights, voting rights under the cumulative preferred stock, preferred stock recovery system, preferred shareholders conference system and preferred stock repurchase system, strengthen the protection for the interests of the preferred shareholders. To our country preliminarily establishes a system of preferred stock, preferred stock shareholders’ interests protection problem has important reference significance.The third part intends to put forward the perfect our country business enterprise legal system of preferred stock. Our country should adopt the French legislation pattern, namely by the company law and the company’s articles of association of preferred stock regulation, regulation on the preferred stock, should be treated differently, in order to strengthen the protection of entrepreneurial enterprises preferred shareholders, at the same time to make up for the shortage of the existing rules to preferred shareholders protection in China, you can set the preferred shareholders conference system, specific investors demand to the components of the system of preferred stock and improve our preferred shareholders voting rights recovery system, etc., so as to benefit the improvement of the system of preferred shares in start-up companies.