The Construction Of Dual Class Structure Of Joint-stock Company

The dual class structure is a special equity structure which is formed by issuing stocks with different voting rights or special interests agreement. Under this equity structure, part of the ownership of relatively low shareholders can vote in either high or special rights to achieve control of the company. One-share-one-vote principle is the foundation of constructing dual share, special stocks is the path to building the dual class structure.The development of dual class structure is not a plain sailing. In hundred years, the debate between accommodationists and radicals has never stopped. there are two core problems. The first one is that if different voting rights can help reduce agency costs or not; the second one is that if the market pricing mechanism can ensure equity trading fair and efficient or not. The author also illustrates these two problems through relevant theories of economics.On the legislative model, the current legislation for dual class structure has two modes, the one is legalize voting pattern represented by Germany, the other is modes of liberalisation of voting rights epresented by Britain and the United States. The equity reset and IPO are the main ways to accomplish this.In terms of our country, the best choice of constructing the dual class structure is to study the special stocks and set the setting of special stocks as the path. The setting of multiple-voting shares, the construction of dual class structure should also become the trend of commercial legislation in the future.The most important in construction of dual class structure is to establish diversified patterns of special stocks from the legislative level, to format the complete system of multiple voting model, the common stock model and the nonvoting stock model. As to the regulation of stocks with different voting rights, it is divided into the general principles and specific rules of two dimensions. General principles including express principle, interests of mandatory disclosure principle and rights protection principle. Specific rules mainly include six aspects as limited offering multiple voting shares of the industry, norming the program of the cognizance of the ownership subject, limiting the liquidity of multiple voting shares, clearing the rights of nonvoting shares, clearing the way for corporation to setting up different voting shares. Generalprinciples and specific rules form the different voting shares in China’s basic law and framework of rules and regulations, and this provides the path for our country to build dual class structure.