| The nature of modern corporate governance theory and practice direction goal is to optimize the company control by means of configuration and construction, including how best to solve the problem of agency costs caused by the information asymmetry and the incomplete contract between shareholders and managers, as well as the problem of conflicts of interest between shareholders due to uneven dispersion and status of voting rights.The voting rights are the legitimate right, as well as the critical right, of shareholders to realize the company control, thus the key issue of the problems aforesaid mainly lies on how to reasonably design and arrange the voting rights system. In order to solve these problems, in the course of development in company law, a series of legal system gradually derived around voting rights, including but not limited to proxy voting system and voting trust system. Originated from the Anglo-American Equity Law, the essence of voting trust is the optimal allocation of voting rights through the trust mechanism to obtain company control and its greatest effect is to protect the interest of shareholders(especially medium and minority shareholders), witnessed by relatively adequate legal practices abroad.In our current legal system, there is no provision for the voting trust system, which is still in the blank stage of legislation but difficult to meet the needs of social development and practice. If the voting trust system was introduced into our Company Law & Trust Law legal systems, the functioning value optimization and equity benefit maximization of the voting right could be achieved thereby. Therefore, from the perspective of law history and social economics, firstly this paper analyzes the history of the voting trust; secondly from the viewpoint of jurisprudence, combining the use of comparative analysis method, the paper analyzes and clarifies the meaning of the voting trust in itself, during which the relevant legislation of the United States is deeply studied. And then from the angle of the civil & commercial law and economic law, the paper continues to make fundamental analysis on voting trust legal characteristics, composition elements, application principles, legal relationships and legal effect etc., by which the connotation extension is further clarified by comparative analysis of the similar systems afterwards. Meanwhile, the paper further discusses the necessity of the introduction of the system into China on the basis of shareholders’ right protection in reality and relevant problems in China. Finally, in order to build up and improve the voting trust system from the Company Law, Trust Law and relevant legal system, the paper mainly discusses the reference value of voting trust system, and puts forward legislative proposals and suggestions based on the specific background of our country’s existing insufficient trust legal culture and the lack of relevant legislative system.First of all, the first Chapter introduces the history of voting trust system and the present situation & problems in China, with big focus on its development history in the United States. Meanwhile, in view of a broad sense of demonstration effect of the Model Company Law in the United States, by which most of the states referred to make their company law, it provides a good reference to study the development history and specific content of the voting trust system, attributed to its detailed provisions regarding the legal structure and procedures requirement of the voting trust therein. Therefore, the paper mainly takes Model Company Law as a research object.The second Chapter discusses the legal nature and elements of the voting trust. As far as its legal nature is concerned, the voting trust is a kind of indirect exercise of the voting rights by way of combining the voting rights at Company Law and the function of Trust Principle. In essence, it is a legal design and arrangement to re optimize the allocation of corporate control right and ultimately get the right to dominate the business decisions through centralizing the use of voting rights at Company Law via the trust mechanism at Trust Law. Through the arrangement of this system, the functioning value optimization and equity benefit maximization of the voting right could be achieved. The form elements of the voting trust in law are as follows: the written form, the legal subject, the time limit, the registration and public disclosure, and the essential elements are that it should have legitimate reasons and purposes, for example, may not violate the mandatory laws and regulations, public order & good customs and other principles.In the analysis of its own unique legal characteristics and attributes of the voting trust in the second Chapter, the third Chapter focuses on the application of the legal principle of voting trust, including basic principles of private autonomy, Lutheran principle, public order & good customs etc., especially focuses on Lutheran principle and the principles of public order & good customs, as the latter generally deemed as an important criteria to review the voting trust purpose legitimate or not.The fourth Chapter focuses on a narrow point of view to discuss the voting trust legal relationship and expands the analysis from the subject, content and object. To further understand the essence of the voting trust, regarding the dispute of the voting trust object, this Chapter starts from the legal nature of the shares and voting rights to analyze the object of voting trust. Based upon the depth analysis of the property ownership of shares, non-property ownership of voting rights and its service in terms of property rights, it is concluded in the paper that the object of voting trust should be shares. The voting trust means a special legal arrangement to achieve optimal allocation of control right, by which voting rights can be stripped out separately from all rights of shares through legal technical means and transferred to the trustee, who is allowed to exercise in accordance with voting trust agreement, based on the principal’s specific purpose.The fifth Chapter mainly discusses the legal effect of voting trust from two aspects regarding invalid and/or revocable voting trust and then proposes that it is necessary to distinguish between the external and internal legal consequences based upon further analysis on the legal consequences thereof. External legal consequences shall mean what will be the impact of the invalidation and/or revocation of the voting trust on the effectiveness of shareholders’ meeting resolutions. This paper argues that voting trust invalidity and/or revocation impact on the effectiveness of shareholders’ meeting resolutions can not be generalized, as the case may be, that is, depending on whether the voting rights of the trust constitutes the effective resolution of the decisive votes directly affecting the shareholders’ meeting or not. If the voting rights of the trust become invalid or revoked and result in the number of votes obtained by resolution of the meeting was less than the minimum required motion by the requirements of the votes, even if only by one vote, the shareholders’ meeting should be valid, otherwise, it will not affect the validity of the resolution. Internal legal consequences shall mean what will be the impact of the invalidation and/or revocation of the voting trust on the voting trust agreement of the parties. This paper argues that, in case the trustee is in violation of the voting trust agreement, the legal consequences of a breach of contract occur only but it shall not affect the validity of the shareholders voting.The sixth Chapter focuses on the analysis between voting trust system and similar systems, by which its connotation and denotation can be further clarified, as well as it legal nature.The seventh Chapter analyzes the necessity of the introduction of voting trust system based upon a combination of protection of shareholders’ rights and the actual situation on the real problems in China, with focuses on strengthening the protection of minority shareholders, optimal control of the company, optimal operation and management of state-owned assets and attraction of foreign investment as well, meanwhile, to discuss main problems may existing, especially points out that due to lack of cultural traditions in the trust, plus the voting trust gaps in the system as well as rare in the legislation in practice, it has already resulted in the public relatively lack of the cognitive of the value and significance of the voting trust, and also not solid social foundation system, which will become the most important issue of the introduction of voting trust system.On the basis of the foregoing analysis, the eighth Chapter creatively puts forward that, from the overall standpoint, the voting trust system shall be established in this way as follows: taking Corporate Law as the main body, Trust Law as support and the Securities Law and relevant laws & regulations as backup. And when building our voting trust system, we must firstly focus on the top-level design of upper law, particularly to clearly stipulates the respective voting trust system in Corporate Law and Trust Law, and secondly to deal with the connection between the upper and lower law, with particular attention to the interface arrangements between the relevant laws and regulations. Regarding the specific rules design, applicable principles, legal components and legal effect of the voting trust shall be clearly made, with reference to the mature legal framework of the United States Model Company Law and also combination with our judicial characteristics. At the same time, since the inherent requirements of the voting trust system itself may not match or meet the existing laws & regulations, administrative regulations and other normative legal documents, taking into account the problem of convergence between our current legal systems, the paper finally puts forward specific proposals, mainly including as follows: a. Modify the "Company Law". Clearly state the voting trust system in the "Company Law", thus the voting trust, just like proxy voting, both as an indirect way to exercise voting rights, will have a clear legal basis, by which the shareholders with different needs can have more choices to exercise voting rights; b. Modify the "Securities law" and its relevant laws & regulations. Expressly build up voting trust system therein to improve the legal system; c. Modify the "Trust Law". Clearly state voting trust is a legitimate form of trust in the "Trust Law" and also state effective elements of the voting trust; d. Modify the "Trust and Investment Corporation Management Approach". Establish a qualified trustee access system to make clear qualified trustee access conditions, expand the scope of qualified trust trustees and particularly admit private equity fund managers as a qualified trustee; e. Modify the "Trust Capital Trust Scheme Management Approach". Admit the voting trust plan as an exceptional case. |
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