Study On Legal Issues Of Listed Companies’s Dual Share Structure In China

As a substitutive system of "one share-one vote",dual share structure is an important system of stockholder equity structure,providing a diversified choice for listed companies’ financing.Listed companies may freely choose the appropriate equity system based on their own development requirement and external market circumstances.The establishment of dual share structure is of great significance to the development of capital market in China.The first chapter of this paper mainly studies and summarizes the concept and characteristics of dual share structure.According to the practice of foreign capital market and research on institutional theories both at home and abroad,dual share structure has many manifestations,theoretically could be divided into generalized and narrow ones.Compared to "one share-one vote",the substantive nature of dual share structure is that the method for obtaining controlling right is by way of covenant other than by operation of laws.In addition,dual share structure has the characteristics of separation of voting rights and ownership,multi-level stock placement and separation of ownership and decision-making power.The second chapter mainly discusses the theoretical basis of dual share structure.Current academic study mainly focus on the aspects of fairness issue,the impact on corporate governance and the mechanism efficiency:the pricing mechanism of financial instruments in the efficient market could guarantee fairness in the initial right allocation of dual share structure;dual share structure does not necessarily lead to the increase of agency costs between the non-controlling shareholders and the controlling shareholders,on the contrary,the incentive and supervisory mechanism of the dual share structure could effectively prevent agency cost’s increase;dual share structure could contributes efficiency to enterprises’ development and value improvement,which is particularly distinct in high-growth innovative enterprises’ performance.The third chapter emphasizes the analysis of the legislative model of dual share structure outside the territory of China,and then provides reference for the selection of our legislative model.There are two basic legislative models in the practice of extraterritorial legislation,namely,the general legislative model of liberatzation and the general legislative model of prohibition.The operation of these two legislative models and the repetition of extraterritorial legislation on dual share structure has significant implication to our country.However,due to the particularity of China’s philosophy of corporate governance,the practice of capital market,our country needs to adopt a special legislative model,that is,by the State Council establish the classes of shares through the administrative regulations,and then enterprises may select the classof stock and the corresponding application within the scope of administrative regulations.From the perspective of combination of theory and practice,the fourth chapter summarizes the issues arising from or in connection with the establishment of dual share structure system,and puts forward some suggestions and solutions specifically.By introducing of’ dual ownership system,risks might be generated with respect to the generation and change of equity structure,information disclosure,exercise of control rights as well as the conditions of investor’s.Therefore,we should set up the dual share structure along with its supporting system taking governance strategy and corporate supervision strategy into consideration in order to secure against the systematical risk and guide the dual share structure to function positively.This paper mainly adopts the methods of literature research,empirical research,comparative research and historical research to forecast the dual share structure system in China’s capital market on the basis of fundamental theories.And afterwards put forward relevant solutions and problem solutions specifically by taking advantages of institutional strengths,to regulate the operation of capital markets,and further enhance China’s capital market competitiveness.