Research On The Legal System Of Multi-class Share Structure And Corporate Governance

This study aimed to address the financing problems encountered by current small and medium-sized enterprise in the process of development, especially the current interest financing system cannot adapt to the development of enterprise-demanded science and technology innovation, resulting into the lack of innovative impulse to the society structure transformation and upgrading.The author analyzed the problems existing to the interests financing system from the perspective of double empowerment mechanism. Specifically, the first layer of empowerment system endowed enterprise founder and manager team with super-voting authority with the aid of multilayer structure, which enabled founder with absolute-numbered voting rights. The founder could affect the final result of specific decisions or resolution in the company’s shareholders meeting and control the domination of the company by influencing the decision of the shareholders’resolution. In addition, the company founder was in the possession of small quantities of company’s share and sold more shares into circulation market for financing, which could solve the contradiction of control right and financing needs in the traditional interest structure. The founder gained the absolute control of the company after the first layer of empowerment, in the combination of the decision-making and controlling-right of the company. This situation was similar with the traditional interest structure of existence of large shareholders, which would be easy to produce the action of’controlling shareholder’infringement of the company’s interest. After the first layer of empowerment, the company’s control belonged to’controlling shareholder’, which would result into the supervised invalidity of the company operation and management board and supervisors. And the rights and interests of small and medium-sized shareholders and company would also be indirectly damaged. Accounting the above situation, it is very necessary to put forward the mechanism to secure the rights and interests of minority shareholders. The second empowerment was established on the basis of the first empowerment. It combined the shareholders’ commitment of restricted system with resigning voting power of small and medium-sized shareholders to’resurrection’in the multilayer structure. The voting rights is not simply’resurrection’, and the rights of minority shareholders were expanded to the equal status of’controlling shareholders’, even beyond the ’controlling shareholder’. In this way, the small and medium-sized shareholders could have enough ability to maintain the interests of the company and themselves’. The empowerment of the first layer mechanism was the adopted multilayer interest system in many capital market of western developed countries. The second empowerment mechanism—shareholders’commitment restricted system, was a new system conceived by the author through comparative analysis of the multilayer structure and the traditional mode, but this mechanism had limitation of enabling small and medium-sized shareholders to prevent violations of’controlling shareholders’for the companies interests. Then after the second empowerment, a combination of shareholders commitment of restricted system with shareholders derived litigation system would break the limits of the promised restricted system and derived litigation system, also strengthen the supervision role of small and medium-sized shareholders, in the form with a set of complete and reasonable system of multilayer interest structure.