The Legal Analysis On Surplus Distribution Dispute Between Liyugang And Xianjuyuan Company

Dividend is the most important way for medium and small shareholders to obtain asset income in limited liability companies,with the rapid development of economy.The number of companies has increased dramatically in recent years,distributive rights disputes of limited liability companies have appeared again and again.The reason is that,on the surface,it is the abuse of shareholder rights by major shareholders that the company evades dividends and damages the dividend rights of small and medium shareholders.The actual reason for this is the incompleteness of the protection system for dividend rights of small and medium shareholders in China's limited liability companies,resulting in an endless stream of disputes over surplus distribution.Looking at such cases in judicial practice,the judgment of the court is not exactly the same,there are even cases where the same case is differently judged,therefore,there is still room for discussion on the role of the judiciary in the distribution of company surplus distribution disputes.Li Yugang and Xian Ju Yuan Company's Earnings Distribution Dispute Case is about the distributing disputes over the distribution of profits caused by the company's failure to meet the investment expectations of the company,the case from the first instance to the second instance coincided with the promulgation and implementation of the" Supreme People's Court's Provisions on Several Issues Concerning the Application of the,Company Law of the People's Republic of China"(4)"(hereinafter referred to as the,Company Law Interpretation IV").it is a typical case.One of the controversial issues in the case is the Judicial Intervention in Li Yugang' s complaint on the protection of dividends.First of all,the shareholder dividend right is necessary for Li Yugang ' s fundamental shareholder rights to protect his dividend rights,especially the abstract dividend rights.Secondly,through legal and institutional analysis,it is concluded that small and medium shareholders should be protected by the judicial involvement of dividends if they cannot obtain remedies within the company.Combined with the typical cases and judgments that occurred in practice,it can be seen that the court's refereeing attitude is not consistent before and after the implementation of "Company Law Interpretation IV",summarized briefly is that before the implementation,"the power of abstract dividends cannot be claimed,and the specific dividend rights can be sued." After implementation,"abstract dividend rights and specific dividend rights can be sued.”It follows that Li Yugang ' s case should be protected by judicial intervention in dividends.The second focus is on Li Yugang' s judicial remedy in the process of protection of dividends.According to the analysis of typical cases,it can be known that the company's articles of incorporation do not necessarily have direct validity as a basis for dividends.Therefore,Li Yugang cannot directly obtain judicial remedies according to Xianjuyuan's articles of incorporation.According to the dilemma of Li Yugang' s right to share dividends,we found that all judicial remedies under the existing legal framework have their own corresponding deficiencies and they cannot achieve the effect of relieving Li Yugang ' s right to distribute dividends.In this regard,it is necessary to complement and improve the protection of dividend rights for small and medium shareholders of limited liability companies in terms of concepts,systems,and mechanisms.Only this can better protect the dividend rights of small and medium shareholders.