On The Improvement Of The Shareholders'-Right-to-Know System In China

While economic development is given the top priority in both China and the other countries,companies undoubtedly play a key role in the market economy.The smooth operation and effective management of the each company is the cornerstone for the booming market economy.As the foundation for the realization of other rights,the shareholders' right to know call for improvement so as to protect their rights and stimulate the interest in investment.Therefore,it is of great significance to study the issue of shareholders' right to know.Generally speaking,the current arrangement of shareholders' right-to-know,which is based on Securities Law and Corporate Law,is far from satisfactory.The shareholders,the small and medium-sized shareholders in particular,usually have their rights-to-know infringed.Moreover,due to the imperfect substantive laws and because the litigation procedures for the relief system have some loopholes,quite a few shareholders,when their rights-to-know are offended,are unwilling to seek legal assistance,or will not obtain any legal protection even if they resort to law.Therefore,the infringement of shareholders' right-to-know remains a frequent issue.Under such background,when formulating the first version of Corporate Law,the concept of shareholders' right-to-know was mentioned.Since 2005,the Corporate Law and Securities Law have been constantly revised and interpreted,developing and improving the shareholders' right-to-know system.Compared with the 1993' Corporate Law,the current version and the affiliated legal interpretation have conducted a series of adjustments.For instance,the denotation has been enriched,the scope of the subjects enjoying the rights-to-know has been expanded,the external conditions for the enforcement of the rights have been further clarified,and the shareholders' rights of limited companies shall be different from those of the joint-stock companies.In spite of such progress,there are still some defects,such as the incomplete connotation of the shareholders' right-to-know,the unspecific qualification of the subjects,lack of rules concerning the appointment of examiners.Given the improper protection of the shareholders' right-to-know under current laws,it is of great urgency to analyze the issue and study how to improve the shareholders' right-to-know.This thesis is to offer some suggestions and proposals to perfect the relevant laws and regulations.The thesis consists of four parts:The first part introduces the origin and meaning of shareholders' right-to-know,clarifying the sub-rights,and analyzing in detail the shareholders' right to consult,inquire,acquire information,and call for the appointment of examiners.It lays the foundation for the subsequent exploration of the issue in the thesis.The second part describes the current status of the shareholders' right-to-know in China and the limitations,pointing out the defects in the present Corporate Law concerning shareholders right to consult,inquire,and appoint of examiners.There are still some uncertainties on the definition of shareholders' right to consult,the restriction of the qualification of the shareholders' right to inquire,the scope of the enforcement of the right-to-know,and the relief procedures once the rights are infringed.Consequently,the similar case can not receive the similar judgment,impacting the legal authority.The lack of the appointment system of examiners renders the shareholders unable to resort to law for their legal rights.Quite a few legal workers have called for the introduction of the appointment system of examines.The third part discusses the reference of laws and regulations in other countries concerning the protection of shareholders' right-to-know.By analyzing the common law system and civil law system,the defects of the current shareholders' right-to-know in China have been pointed out,laying the groundwork for the suggestions and proposals in the next part.The fourth part,the most important part of the thesis,offers some feasible suggestions on how to improve the shareholders' right-to-know.The suggestions are of two types: the substantive law and procedural law.The former mainly involves the scope of the right-to-know,the acknowledgment of “justifiable purpose”,the protection of shareholders' right-to-know and the business secret.The latter includes the division of the burden of proof,litigation procedures,terms,evidence preservation,judgment and enforcement.