Studies On Passing-through Voting

The connection between parent-subsidiary corporations under the business group is increasingly complicated.In terms of the operation development in current enterprises,some business groups may reduce rights and interests of equity in parent companies,because of the rapid expansion in management authority.In addition,financial risk coefficient is too high for pyramid equity framework.In the current legal framework of China,rights and interests of minority shareholders in parent companies can't be maximized,because of severity in application conditions of corporate personality negation principle,hysteresis of rescue,difficulty of reinforcing responsibilities in board of directors,and effect limitation by introducing shareholders' declaration of intention.As a result,the best approach to solve this problem is to introduce a new system.Pass-through voting rule means that under the framework of parent-subsidiary corporations,when subsidiary corporations are merged,separated or sell major capital,shareholders of parent companies replace parent companies to exert the voting power of subsidiary corporations.It has the functions of improving the minority shareholders' ability on risk prevention,enhancing share holding value of shareholders in parent companies,and balancing interest mechanism in group enterprises.Also,it properly solves the stockholders'equity reduction of parent companies.However,the essence of shareholders' pass-through voting rule is to expand the exercise range of shareholders' voting right in parent companies.Without the appointment and safeguard of the corresponding supporting rules in the process,the existing power framework and benefit balance relationship in enterprise operation will be destroyed for expansion of shareholders'voting right.Under the precondition of summarizing theoretical system of shareholders' pass-through voting rule,it is better to reveal realistic necessity and feasibility of constructing the pass-through voting rule in China,refer to overseas legislation and practice about shareholders'pass-through voting rule,inspect existing rules of Chinese enterprise groups,analyze and solve possible defects in pass-through voting rule,and grasp principles abided by pass-through voting rule,so as to greatly design the introduction and specific construction of shareholders'pass-through voting rule.