Research On Preferred Stock System Construction Of China

There was not yet made any provision for preferred stock in Chinese current company law. Preferred stock system from survival space where is article 131 of the company law stipulate: The State Council may make separate stipulations relating to a company’s issuance of shares of classes other than those prescribed herein. The absence of preferred stock system in the company practice is due to the imperfect of the law. But as China’s economic developing and financial market reforming, legislators increasingly recognized that preferred stock system indispensable in the company’s legal system, and therefore the State Council and the Commission in 2014 has issued regulations in an attempt to break the status quo of China’s preferred stock system deficiencies in the existing legal institutional framework.Preferred stock has priorities mainly on dividend distribution and the distribution of residual property compared with other types of shares, but its voting rights generally restricted. Preferred stock is the product of "Autonomy of Private Law ", it has the characteristics of the contract and its internal rights construction is very complex. The internal structure and the specific form of preferred stock are mainly to be agreed by the Company’s Articles of Association. Shareholders can set a variety of types of preferred stocks by way of negotiation, so they have very strong dependence in the Company’s Articles of Association. Preferred stock can build a bridge between the individual needs in the company practice and the equilibrium state among shareholders because preferred stock’s setting has a great deal of autonomy space. Preferred stock can play a huge role in free commercial society.This article is divided into four chapters. As a part of overview, the first chapter mainly introduced the basic theory of the preferred stock which is including concept, characteristics, classification, etc. In addition, the author alleges that Legal Philosophical Basis of "freedom" and "equality" in order to explain the growth and development of the preferred stock system. In second chapter, the author alleges analysis of preferred stock system mainly from the perspective of comparative law. Firstly, several representative preferred stocks system which in the Civil law system and the Common-law system was selected as the object and then the author introduces the legislation mode of preferred shares and characteristic rules. Then, the vision was transferred from international to domestic; this paper expounds the legislation present situation and the way of preferred stock system in China. The third chapter analyzed the preferred shareholders rights protection mechanism in the construction of system of preferred stock. In this chapter, the paper discusses the preferred shareholders rights were infringed is the root cause of the conflicts between preferred shareholders and the common shareholders. On the basis of it, the author analyzes the omission of preferred stock rights protection rules in dividend distribution, distribution of surplus, company information acquisition and the process of stock repurchase. Through draw lessons from foreign mature experience preferred shareholders rights protection, the author comes up with some corresponding settlement mechanisms by whether can achieve rights protection effect as measure standard. The fourth chapter is the full text of the summary. In this chapter, the author summarized the practical value of the preferred stock used in improving corporate governance, the reform of state-owned equity, and enriches investment and financing tools, etc. The author put forward some legislative Suggestions in the choice of legislative mode, the revision of the basic law, the conflict of laws and preferred stock shareholders’ rights protection based on the analysis of the preferred stock system in China and reference for foreign legislation.