The Research On The Preemptive Right Of New Shares

The core of rights is the balance between the interests of rights holders,one’s rights mean another’s obligations,they always come up together,which constitute the main content of the relationship between two or more parties.The preemptive right of new shares we discuss in this article is no exception,it’s to protect the company’s shareholders,especially the legitimate rights and interests of small shareholders,and it’s mainly to maintain the balance between corporate finance interests and shareholders’ proportional interests.The pace of modern social development is rapid,business opportunities if not well grasped will be fleeting.Efficient financing for the company means that in the shortest possible time to raise the most high-quality funds,this will allow the company to spend the least cost.However,the company can not blindly pursue the financing efficiency regardless of the legitimate rights of the shareholders,the law provides that the shareholders of the company enjoy the preemptive right of new shares,which means they can take precedence over the third party who don’t hold the company’s shares to subscribe for new shares during the issuance.The preemptive rights of new shares entitle the shareholders to maintain their own proportional interests in the company and prevent the proportion of their shares from being diluted due to the issuance of new shares,thus affecting the voting rights of the shareholders in accordance with the shareholding ratio at the shareholders ’meeting or the shareholders’ general meeting.The preemptive right of the new shares requires the company to take into account the rights of the shareholders before the issuance of new shares,leaving a certain amount of time to give the shareholders the right to subscribe for or not subscribe,which is in conflict with the interests of the company’s efficient financing.How to determine the value of the two is what the law needs to resolve,the legislators should consider using the law to restrain the company’s behavior in order to prevent the company or the company’s major shareholders from doing bad things to shareholders’ legitimate rights and interests when pursuing financing interests,and should establish the correct value judgments to guide the behavior of the main market.This article consists of five parts.The first part gives an overview on the preemptive right of new shares and how to distinguish from other similiar rights,finally to analyze why we need the existence of this righ.In this part,the article mainly solves the basic concept of the problem for understanding it better,and the system of the preemptive right of new shares in different countries,and gives a brief introduction to the structure of the system in China.The second part is about the nature of rights in order to provide a basis for the discussion of the right’s system design in the latter part.The third part is the introduction of the two legislative models of arbitraryism and legalism.I believe that the relevant systems for limited companies and joint-stock companies can be divided according to their nature.The fourth part is the thinking and design based on the reference of other countries legislation and the combination of China’s actual national conditions,mainly from the subject and object of the division,the exercise of the rules and time limit,the right to transfer and give up these three aspects.The last part follows the fourth part,which discusses the remedies that can be taken when shareholders’ rights are unlawfully excluded.The above content implements the purpose of the author to maintain the balance between the legitimate rights of shareholders and the financing interests of the company.With the aim of calling for legislation to regulate and restrict the behavior of the company,the controlling shareholder and the major shareholders,guaranting the rights of the minority shareholders of the company,promoting the perfection of the preemptive right of new shares system and maintaining the steady and healthy development of the capital market.