On The Multiple Representative Litigation Of Shareholders

Since the industrial revolution in nineteenth Century, the organizational form of enterprises has gradually evolved from singularity to complexity .In the survival mode of the enterprise group,the parent company is shareholder of subsidiary company by holding stocks, and the interests of both is closely linked .So if the subsidiary company's directors are not good at management, the subsidiary company's interests may be harmed and the parent company will be involved as well.The outcome of it ,the shareholders of parent company will become the real victims .According to the article 152 of Company Law of PRC, in this case, if the subsidiary company refused to file a lawsuit against directors who didn't take responsibility,so the shareholder of the subsidiary company (including parent company) can take a case to court to preserve their interests .However,sometimes the parent company is not willing to hold legally responsibility of the subsidiary company's directors by making up all sorts of excuses .Faced with many things that have harmed the company and interests of minority shareholders , minority shareholders have still not managed to get a word in edgeways,making it difficult to protect their legal rights .In order to solve this problem, Multiple Derivative Suit was introduced to Japan in 2014.Multiple Derivative Suit has its origins in case law of the United States,the main purpose is to solve the problem that Shareholder Representative Lawsuit can not be applied between parent company and subsidiary company .In order to meet the needs of the development of the company, and further improve the management system of parent subsidiary companies, the author believes that the introduction of Multiple Derivative Suit will play an important role in the governance of companies in China .This article examines whether a double derivative actions should be permitted and also gives a detail discussion regarding its fundamental theory and proceedings in five chapters.Chapter one: Overview of Multiple Derivative Suit, including its definition, historic development and characters .Compared with Shareholder Representative Lawsuit, it may need to establish Multiple Derivative Suit in China.Chapter two : Analysis of the theory foundation of Multiple Derivative Suit.Next three chapters are the legislation suggestions of Multiple Derivative Suit which include the party qualification restrictions and prepositional procedure related issues.