On The Right For Shareholders To Vote Separately

The so-called right for shareholders to vote separately, literally means, when a shareholder has two or more votes, he/she can use part of the right to vote in favor of a proposal, then use the rest to vote against or abstain.It may sound irrational for a shareholder to act like this. However, in recent years, the capital market in China has developed rapidly. The path of the capital markets in developed countries shows, the more mature the capital markets grow, the more professional institutional investors will emerge. However, the data we got by November of 2012 shows, the number of the professional institutional investors who held effective A-share accounts is approximately 97,000, increasing by 12% in 5 years since 2007.Among those institutional investors, the company pension, the collective asset managed by security firms, QFII and the securities investment fund increased by 150%.However,unlike the situation in developed countries that the professional institutional investors often occupy 50%-60% of the capital markets,the proportion in China is only 13.6%.Due to the big gap, we can rationally expect that, in the future, both the number and the proportion of the professional institutional investors will continually grow at a fast pace.At the same time, because Chinese government has not fully opened the capital market, which means the vast majority of foreign individual investors can only buy the funds issued by QFII or entrust the QFII to invest for them, if they want to invest in domestic A-share market. In addition, it is not rare for shareholders to hold shares for others or co-owner shares with others. In the above conditions, the law of our country says nothing about whether shareholders are permitted to vote separately. If the shareholders are forbidden to vote separately, a large number of substantial shareholders have to give up their right to vote if they can not reach an agreement, which will hurdle the development of capital markets obviously. If the law does not forbid shareholders to vote separately, under which conditions and follow which procedures can shareholders vote separately are urgent problems be solved.My essay is made up with six parts. The first part is the introduction of my essay. In this part, I described the practical meaning of the right for shareholders to vote separately. And I gave a rough introduction of the relevant research so far.In order to view the problem on a relatively high lever, the second part of my essay is on the theorical description of the shareholders’ vote and the right for them to vote separately. In this part, I want to draw a conclusion that as time goes by, the voting right has shown a clearly tendency of becoming objective and instrumental, so there is no problem for shareholders to vote separately.The third part is a comparative-law analysis. In this part, I gave an introduction of the relative law in both the system of common law and the system of continental law.The forth part of the essay is to analyze the necessity and feasibility to allow the domestic shareholders to vote separately. Because it is theorically proper and is technically available, as a result it is feasible. And as the right can protect the legal right of the substantial shareholders, it is necessary to allow shareholders to vote separately.The fifth part of the essay is the construction of the system for shareholders to vote separately in domestic law.The last part of the essay is the conclusion, in which I reiterate the key points and the importance to plant the system in China law.