The Study On The Shareholder S Proposal Right From The Perspective Of Interests Balance

The Large-scale modern enterprises are the entity of contradictions, which involve various related interests, while controlling shareholders and minority shareholders are all found in the contradictions. Whereas, when facing practical issues, minority shareholders are in week position, whose rights and interests are always infringed and invaded. The ascendancy of controlling shareholders ensures their effective voice towards the company’s governance, which restricts minority shareholders’rights of governance. As a part of shareholders’ general meeting, minority shareholders are unable to play its proper role in the company. The shareholder proposal rights, which put forward by minority shareholders, is to construct an effective supervision and control over the power of controlling shareholders and encourage minority shareholders to stand up for their own rights of governance as well. The shareholder proposal is of vital importance in balancing various benefits or interests among enterprise, controlling shareholders and minority shareholders.The shareholder proposal has been clearly established in Company Law in China. However, compared with the United States and Japan’s proposal, China’s shareholder proposal is too simplistic to put into operation. Nevertheless, many scholars’studies on shareholder proposal are only limited to the difference of external manifestation’s with foreign countries’ proposal. The imperfection of the shareholder proposal rights has failed to balance the interests among enterprise, controlling shareholders and minority shareholders, which is an obstacle to the development of company.This paper studies on the legal issues involved in shareholder proposal rights from the perspective of balance of interests, the author firstly put forward the idea that the reforming of shareholder proposal rights could not only guarantee the steadiness of corporate governance structure and safeguard the interests of minority shareholders, but also prevent their abuse of rights. Secondly, based on the predominance of controlling shareholders, the reformed shareholder proposal rights would encourage controlling shareholders to admit shareholder proposal rights, and clarify the duty and right of controlling shareholders. In addition, the reformed shareholder proposal rights would assure minority shareholders’ right towards company’s operation and prevent their abuse of rights. Lastly, the reformed shareholder proposal rights would effectively prevent monocracy of controlling shareholders and guarantee the state of checks and balances among enterprise, controlling shareholders and minority shareholders, which would ultimately perfect corporate governance structure.This study divides into four chapters to discuss about the shareholder proposal rights. Chapter one gives a clear explanation to the legal theory of shareholder proposal rights, including the connotation, characters and value of the proposal. Chapter two covers the appeal of different interests related to shareholder proposal rights, which respectively introduces conflict of interests among enterprise, controlling shareholders and minority shareholders. Chapter three analyzes the current situation of legislation and deficiency exists in China’s shareholder proposal on the basis of the balance of interests. Chapter four mainly focuses on reform of the shareholder proposal rights based on balancing the interest relationship among enterprise, controlling shareholders and minority shareholders. This part references relevant mature foreign legislation of shareholder proposal rights, and coming up with the system design of shareholder proposal rights, which refers to lowering the qualification, broaden the scope and restrict the details of proposal. Apart from above, reforming of shareholder proposal rights should build the audit rule towards controlling shareholders and minority shareholders’ proposals, clarify the process of proposal, establish relief system and increase the social responsibility of Shareholder proposals.