Research On The Relief Of Shareholders' Rights Under The Oppression

Shareholders oppression in limited liability companies is an issue that has been discussed in the practice of corporate law in China recently.Due to the complexity and concealment of shareholders oppression,the accurate conception of shareholder oppression is still undefined both legislation and theory in China.This paper argues that the shareholder oppression infringes the shareholder's legitimate right,which is caused by the majority shareholders who take advantage of their dominant position and the continuation of the infringement in a limited liability company.According to the general view,the typical behavior of shareholders oppression in practice includes infringing shareholders' right to information,depriving shareholders of their official duties,refusing to distribute profits or carrying out unfair distribution of profits,and so on.And due to the characteristics of the limited liability company such as the closure of the organizational structure,the capital majority rule,the lack of effective exit mechanism,shareholder oppression are phenomena which are difficult to avoid and cannot be exhausted in advance during the course of operation of limited liability companies.Referring to the criteria for defining shareholder oppression refers to the fiduciary duties and reasonable expectation principles which is developed in British and American juridical practice,this paper argues that relief to shareholder oppression is necessary for shareholders' right protection.Therefore,this paper focus on the relief of shareholders' claim for profits distribution,through the research on the improvement of the remedy of shareholders' claim for profits distribution,to provide reference for the improvement of the relief of shareholders' rights under the state of oppression in our country.According to whether the shareholders' meeting makes a resolution on the company's profits distribution,the claim of shareholders' profit distribution can be divided into specific shareholders' claim for profits distribution and abstract claim for profits distribution.Through introducing of the remedies of shareholder oppression in legislation and judicial practice in Germany,Britain,and America,this article summarizes the existing major legal rules concerning the application of shareholder oppression relief in China,including the principle of prohibiting abuse of rights,share repurchase claims,and judicial dissolving litigation.Concerning about the shareholders' claim for profits distribution,according to the provisions of existing laws,the judicial practice can only remedy for the specificshareholders' claim for profits distribution.But the abstract shareholders' claim for profits distribution is difficult to obtain the judicial protection through the existing laws.This paper will focus on the relief measures for the infringement of the right of profits distribution claim due to shareholders' oppression.Then this paper further points out the inadequacy of relief for other shareholders oppression in China such as vague provisions on specific relief rules,narrow application scope,lack of operability,lack of prior legal provisions that restrict the improper behaviors of controlling shareholders,and the lack of judicial remedies.Therefore,in order to provide comprehensive relief to the shareholders oppression,there are two ways to address the problems,improvement for the specific remedial measures and introducing general remedial measures.This article is divided into four parts.The first part mainly introduces the relevant basic theory about the relief and remedy systems of shareholders oppression.It discusses the definition of shareholders oppression,the reasons for its formation,and the main forms of expression.This part selects the shareholders' claim for profits distribution as the typical manifestation of shareholders' oppression in practice,and analyzes the concrete manifestation of the infringement of shareholders' claim for profits distribution.In the second part,the fiduciary duties and the principle of reasonable expectation in other countries will be introduced and interpreted.Then,the necessity of the oppression relief of shareholders is analyzed.The legal rules are applied in China in the remedy of shareholder oppression will be sorted out Where emphasis is on the claim for profits distribution.And there will be a summary about the deficiencies in our country's remedies of shareholders oppression;In the third part,the current legislation and judicial protection of the claim for profits distribution in our country will be introduced and interpreted first.Then it points out that the deficiencies in our country's remedies of the claim for profits distribution are mainly cauesed by the rough legislative provisions,the lack of procedural provisions,the narrow range of judicial protection,and the unfair distribution of the burden of proof in the proceedings.At last,the paper argues that the lack of protection is caused by the indistinct boundary between judicial intervention and corporate autonomy.In the fourth part,it will put forward improvement measures for the claim of profits distribution both in the legislative and judicial practice.Firstly,aiming at the deficiency of objection shareholder share repurchase system,the criteria of the repo price will be establishedand the conditions and procedures to bring back the repo litigation will be improved.Secondly,it demonstrates the feasibility and necessity of applying the claim for compulsory profits distribution in China in order to realize the relief of the claim for the profits distribution of the oppressed shareholders.