A Study On Fiduciary Duty Of The Controlling Shareholder Of The Closing Companies

Considering the impact of the majority principle, the study on the corporate governance focus on the director regime rather than the interests exploit between shareholders and the supervisor system against shareholders. The traditional company law does not require the shareholder to bear additional obligation to the company or other shareholders considering its ownership interest in the company. However, considering the concentrated shareholding structure, namely "sole majority shareholder " gradually emerging, the abuse of the interests of minority shareholder and company by the controlling shareholder becomes more and more frequent. But in the other hand, the legal system and corporate governance against the controlling shareholder's abuse of the shareholding rights is relatively incomplete, thus to prevent the controlling shareholders from abusing the interests of the company and the minority shareholder by taking the advantage of the majority shareholding, we shall strength the obligation on the controlling shareholders.First of all, the first part of this paper discuss the phenomena that the increasing presence of the abuse of the interests of the minority shareholder and the company by the controlling shareholder in China and list certain typical behavior in term of the abuse of controlling rights by the controlling shareholders; in addition, this paper states the necessity of introducing the fiduciary duty of the shareholders in PRC legal system; the second part of the paper put emphasis on analyzing the factors of controlling shareholders' violation of the fiduciary duty, explaining the original problem source of the agency problem; the third part of the paper deal with the nature, content and characters of the fiduciary duty born by the controlling shareholder of Chinese closing companies; and the forth part refers to the suggestion with respect to further improve the fiduciary duty of the controlling shareholder in China.We shall note that to improve the legal system of controlling shareholders' fiduciary duty can prevent the controlling shareholders from the abuse of the rights and protect the rights and the interests of the minority shareholder, which is in favor of the further development of the corporate regime.