Type Analysis For Defects Of Shareholders' Meeting Resolution

Pursuant to Company Law of the PRC revised in 2005,the mechanism of defective shareholders' meeting resolution is provided in Article 22 under the overview section.As provided in Company Law,in the event that the resolution and procedure of the shareholders' meeting are defective,the relevant parties may bring the lawsuit for relief.However,as this provision is too simple,there remains uncertainty for the application of this provision in trial.Judges may make different judgment on the similar cases.In fact,the Supreme People's Court has worked on legislating the judicial interpretation since 2011.On April 12,2016,the Supreme People's Court published the Provisions of the Supreme People's Court on Issues about the Application of the Company Law of the People's Republic of China(IV)(Draft for Comment)(hereinafter referred to the “Judicial Interpretation IV”)for the public comments.Judicial Interpretation IV sets out more detailed provisions of the mechanism of defective resolution.However,the classification of defective resolution under Judicial Interpretation IV remains unreasonable and requires further revision.Based on 12 provisions of the mechanism of defective resolution of shareholders' meeting under Judicial Interpretation IV,the writer analyses relevant legislation in China and overseas and discusses the relevant theory.The writer finds that the legislator and the scholar intends to deem the resolution of shareholders' meeting as a legal act and ignores its characters of commercial laws.They pay less attention to rules such as convening procedures and rules of debate,which makes them unable to determine the reason for defective resolution and provide the effective relief with shareholders.Based on the procedure of issuing the shareholders' meeting resolution and its validity,the writer determines the nature of the shareholders' meeting resolution and makes the reasonable classification of defective situation.The writer also put forward the standard and principle for classifying the defective resolutions of shareholders' meeting as invalid resolution and revocable resolution.Through analyzing the situation and legal consequence of invalid and revocable resolution,the writer hopes that procedure justice of shareholders' meeting resolution can get more attention and relevant theory can be enhanced.In practice,the writer hopes to raise some suggestions on the supplement and revision of relevant provisions on Judicial Interpretation IV,which will make the juridical application more reasonable and provide effective relief.The paper is divided into the following four chapters to study type of defects in shareholders' meeting resolution:The first chapter is the existing type of defects in the shareholders' meeting resolution,including not only the types stipulated in legislation,but also the academic viewpoints.On the one hand,by analyzing the classification of defects in shareholders' meeting resolution between countries and comparative observing legislative thinking,the paper found that different countries have different emphases on the classification of defects in the shareholders' meeting resolution;On the other hand,by analyzing the “two-point method” and “three-point method” proposed by the academia,and screaming the advantages and disadvantages of two different dividing methods.Thus,the current research progress of the defective types in shareholders' meeting resolution and the fundamental problems existed in them are truly understood.The second chapter is the division of defects in the shareholders' meeting resolution.By studying the formation process and effectiveness of resolution,the nature of shareholders' meeting resolution is gradually clarified.Based on the nature of the shareholders' meeting resolution,combining the relevant provisions of Judicial Interpretation IV(Draft for Comment),the reasonable division of the defects in the shareholders' meeting resolution is carried out.There is no need to set up two types that are no-formed effective resolution and no-exist resolution.The defects in the shareholders' meeting resolution shall be divided into two types based on the existence of shareholders' meeting resolution.However at this time,the "two-point method" is not the original "two-point method",although it is also divided into invalid resolution and revocable resolution,the principle and criterion of division are different from the original.New dividing principle balanced procedural justice and substantive justice and new dividing criteria are the severity of defects.Although the dividing principle and criteria has been established,the application of the defective types requires specific analysis because different types of shareholders' meeting resolution resulting from different breached matter.The third chapter is invalid shareholders' meeting resolution.According to the classification criterion of the severity of defects and the current legislative provisions in our country,the invalid resolution should include the content illegality and the serious procedural defects.First,not all the resolution whose content violates the laws and administrative regulations is attributed to the invalid type.The legislation should be limited to the extent of its illegality and clarified only violates the mandatory provisions of laws and administrative regulations and to enumerate the above-mentioned situation.Second,the serious procedural defects should be attributed to the resolution of invalid matter.The concept should be changed and emphasis on the protection of procedural right,not on protection of voting rights.The legislation directly makes a negative evaluation to serious procedural defects of the resolution.The fourth chapter is revocable shareholders' meeting resolution.It includes the general procedural defects and the resolution whose content violates the company regulations.Firstly,according to the formation procedure of the shareholders' meeting resolution,the specific situation of the general procedural defects is analyzed.Should the general procedural defects include minor procedural defects? Is it necessary for minor procedural defects to apply the remedy of the revocable type? Therefore,we should learn from extraterritorial legislation and the minor procedural defects supplemented by the complementary system of revocation lawsuit: the court discretion rejection system.Secondly,the extent of the defects in violation of the articles of the company's statute is explored.By analyzing the extraterritorial practices and academics ' viewpoints,it is attributed to the revocable type.