Research On Subject Of Shareholders Double Derivate Suit

Company is an artificial legal entity from who shareholder gains profit, and the establishment of subsidiary is an extension of the shareholder’s will. Under the background of seperation of owner’s rights and management’s rights, and collectivization of corporate governance, parent company base on their own interests tend to not bring an direct action and derivative action when they control the director to fraud, or connive with the director of subsidiary in illegal activity, or they have the same director to run the company. As the final owner of subsidiary’s profit and direct victim of offense, parent-subsidiary corporation can’t be protected by law when that happened. Minority shareholder’s rights narrowed when the corporate form become more complicated. In face of legal dilemma, taking the unity of legal system into account, learning from the excellent legislation of United States, Japan and other regions. This paper tries to discuss theoretical basis and function value of the double derivate suit, and tries to provide an theoretical framework of necessity and reasonability to integrated the double derivate suit into the legal system. The double derivate suit has general characteristics of the company law and procedure law. The value of double derivate suit is to make up the vacancy of substantial law through procedural law. The subject system is the core content of procedure norm. This paper aims to giving reasonable suggestions for system construction of subject of shareholders double derivate suit.This paper is consist of introduction, main body, conclusion, there are four parts among the main body.Introduction is about the background and meaning of the research. By adopting the method of norm analysis, comparative analysis, historical analysis, try to reshape the inner logic and external frame of shareholders double derivate suit.Chapter I is about theoretical basis of shareholders double derivate suit. Firstly, define the shareholders double derivate suit by norm analysis method, clarify the intension and extension of derivate suit. Secondly, discuss the undertaking system in civil action, protection of Minority Shareholders ’ s rights theory, stakeholder theory, material injury theory, and criticize existing theories, then verify the reasonability and necessity. Thirdly, introduce the function of compensation and deterrence value through protecting the interest of parent-subsidiary corporation. Fourthly, build framework of subject of shareholders double derivate suit by comparing with shareholder’s derivate suit.Chapter II is about construction of plaintiff system in shareholders double derivate suit. The dualism of derivate suit determines the complexity of plaintiff system. It is necessary to restrict the stock holding period and share proportion of shareholders of the parent company, because the nature of mention right is minority stockholder’s rights. Also there are three exceptional cases in shareholders double derivate suit such as transmission of shares, exchange of stock and Stock-Exchange M&A. In exceptional circumstances, the subject of shareholders double derivate suit require specific regulations. In consequence of breakthrough on personality independence principle, system construction need to abide by great cautious. On the foundation of plaintiff qualifications, the set of subjective elements, pre-procedure, litigation guarantees have specific meaning.Chapter III is about construction of defendant system in shareholders double derivate suit. This section include the defendant subject range and the defendant objective behavior. First of all, there are some disputes about whether outsiders would be included in the defendant subject range. Due to the derivation of litigation right, the defendant subject range should include any subject the subsidiary could sue. In other place, illegal activity has different forms. In order to enhance operability of the rules and definiteness, it is necessary to list the specific situation and separate into different types.Chapter IV is about lawsuit status of parent-subsidiary corporation and other shareholders. The particularity of the double derivate suit determines the duality of corporation and other shareholders. In the first place, parent-subsidiary corporation are interested party in legal relation of double derivate suit, its lawsuit status need to be defined. The lawsuit status of subsidiary is similar to the corporation in derivate suit, it can be defined as third party without independent claim. The parent company could be defendant and third party without independent claim depends on its behaviors. Lastly, other shareholders have the right to participate in derivate suit, but they should participate in the litigation before the end of the court debate.Conclusion is about the summary of plaintiff system, defendant system, lawsuit status of parent-subsidiary corporation and other shareholders, then represent legislative suggestion.