On The Establishment And Applicability Of Dual-class Share Structure In Stock Corporations In China

The traditional theory of corporate law strictly complies with one share-one vote rule,and prohibits the separation of stock rights as a legal system.But with the development of financial markets,the conflict between financing and control has intensified under the rule of one share-one vote,resulting in a number of companies'initial public offering going abroad.This paper applies the methods of comparison and case analysis focusing on research of the conflict between financing and control.It will be necessary to introduce dual-class share structure.How to build and apply dual-class share structure is worth studying,in order to improve the ownership structure of our country.In addition to the introduction and conclusion,the full text is divided into five parts,and the main contents include these.The first part talks about that it is difficult to maintain the control if the company obtains financing from a typical case.If the original shareholders don't increase the shares under the financing,their rights will be diluted under the rule of one share-one vote.With the development of the market,the basic of one share-one vote has been replaced.What's more,it strictly limits company.It's necessary to break through one share-one vote.Through comparative analysis between the optional paths,the second part finds out what's the best way to solve problem of control and financing.The preferred stock,the voting trust,the Alibaba partner system and dual-class share structure can keep controlling the stock rights.By the comparison,it's hard to issue the preferred stocks,and the preferred stocks can't thoroughly work out the problem between control and financing.The voting trust is faced with the risk of being revoked from time to time.Dual-class share structure is more easily institutionalized and standardized than the Alibaba partner system.Dual-class share structure is the better way to maintain control of company.The third part focuses on the feasibility and institutional barriers,if we introduce dual-class share structure in China.First,the Company Law has assigned the State Council to set up classified shares.The preferred stock system and special management unit system can show that legislation has opened the door to dual-class share structure.Second,the securities registration system has planned to reform.The draft of Securities Law has increased the mandatory dividend system.Third,the system is changing all over the world.The introduction of a new system to break the existing system inevitably faces a variety of questions and obstacles.Obstacles in theory include these.Dual-class share structure violates the principle of equality.It's hard to protect the minority shareholders' rights and interests from damage.It's also increases the cost of agency and supervision.In the legislative aspect,we should find out a solution to the connection problem of Company Law and Securities Law.For the principle of equality of shareholders,one share-one vote rule under the equality is only formal equality,because the difference of shareholders originates from the quantities.The distribution of the shareholders' rights helps to promote the balance of rights.The theory of rights balance is more accurate.The perfect system can guarantee the fundamental rights and interests of shareholders.Dual-class share structure and one share-one vote rule aren't the determining factor.The value and the cost are side-by-side.If we want to take in the value of the system,we should accept some costs.The fourth part mainly studies the foreign systems through the way of representative analysis.The United States and the Germany have opposite propositions.The United States prove the ownership structure is changing.The realization of dual-class share structure in US includes convertible,voting rights and IPO.Convertible and voting rights are capital replacement,which affects the value of the stock judgment.In my view,we should build the dual-class share structure through initial public offering.The fifth part clarifies the basic idea of dual-class share structure.Although there is an imbalance between reality and law,it is not suitable to abolish one share-one vote rule.Equity protection system and the incomplete rationality of the investors are the reasons.Innovative technology companies rely on entrepreneurial talent,which depends on the decision and management of the stability.It is recommended dual-class share structure is first applied to innovative technology companies.The qualification of the high voting rights holders should be strictly examined.The issuance of the dual class stock is limited to the IPO.In order to protect every shareholder,we should establish a compulsory information disclosure system,improve the independent director system,and establish a class-action lawsuit system.If some suggestions are closely related to the minor shareholders' interests,it's necessary to be decided by double votes.