The Study On Dual-class Share Structure

Dual-class share structure is a design of stock equity which begins with the conflict between a stock company’s capital raising and maintaining of the control power. In recent years, many Internet technology companies, such as Baidu, Jingdong, Sina Weibo,have listed in the United States with the dual-class share structure, which makes the legal profession started to rethink the value of the dual-class share structure. This paper intends to take the definition of the dual-class share structure as a starting point, and recognize the value of the dual-class share structure from its process of production and development, then to summarize its role and significance. Through a comparative research on the present provisions of share structure between China and other countries, I’m trying to find the defects existing in the setting of share structure in China, and to find other share structure rules worthy of reference. On the premise of the reality, in combination with our country’s situation, advanced concepts and systems should be actively introduced, the current “one share one vote” structure of our country should be revised and innovated, to make it not only conform to the requirement of modernization of company law but also promote the development of enterprise. Details are as follows:The first chapter is an overview of dual-class share structure, which is consist of three sections. The connotation of the dual-class structure and the distinction of related concepts, its historical revolution, its characteristics are respectively described. At the meantime, the fundamental issues of dual-class share structure from the macro can be the foundation to further discuss.The second chapter is the theoretical and rational analysis of dual-class share structure. Firstly, the principle of “one share one vote” is analyzed from the perspective of law and economics and its legal basis and concept are introduced. The second section is the analysis of the dual-class share structure on law and economics, focusing on its reasonableness. The third section analyzes the pros and cons of dual-class share structure from both positive and negative angles, involving its system costs and benefits. Section IV describes the ways to make the dual-class share structure come true.The third chapter is about the legislation and practices of dual-class share structure in various countries and commercial areas and introduces the laws and regulations of other countries about the dual-class stock structure. In this paper, the selected countries are not only the world’s most developed countries, but also the typical representatives of the two legal systems, which ensure the comprehensiveness and advancement of the study. Through the study and summarization of these countries’ provisions on dual-class share structure, experience can be provided to our country’s system design.The fourth chapter is the reflection of dual-class share structure. The first section describes the present legislative situation on the voting shares of the Company Law, which involves the different provisions related to the limited liability companies and joint stock limited company. Section II provides some feasible suggestions for improving the dual-class share structure, which includes how to work to achieve dual-class share structure under existing laws and regulations, the design of future amended legislation law, and striving to learn from the experience of advanced countries under our country’s current situation, at the same time, to go with the tide of the world’s most advanced system.