The Improvement Of The Pre-procedure Of Shareholder Derivative Litigation

The shareholder derivative action is a solution to representative problems in the situation where ownership and management right separate as well as a balancing mechanism to protect the benefit of the minor shareholders.It breaks down the traditional principle of company independent personality and the capital majority decision rule.According to its special nature,legislation provides a pre-procedure to limit its application range and to prove its legitimacy.The pre-procedure can protect the freedom of the company's will and warn the controllers of the company in specific cases.This thesis focuses on the pre-procedure of the derivative action and proposes suggestions to maximize its effectiveness by exploring the foundation of the theory and combining the society background and judicial practice.The thesis is composed of four parts:Part 1: This part discusses the legislation constitution of this pre-procedure of China.The derivative action system was brought in China in 2005 with the legislation pattern where the pre-procedure is a part of the derivative action and discriminates the request between the limited liability company and the company limited by shares.It provides the subject,form,the demand excused rule and so on.It is relatively complete and special to some degree from the other countries.However,it exists many problems as well.Part 2: This part comparatively analyzes the application of the pre-procedure through the obscurity of the request for demand,the difficulty in certificating emergencies,and the existence of the other demand excused facts.This part analyzes the methods that the court handles the relating case,the existing problem and the significance of the improvement.Part 3: This part concentrates on the principle of the improvement.The improvement should hold on to the principles of consistency with the condition of China,adequate protection for shareholder's suit right,convenient procedure for shareholders and maximization of system value.It should be coupled with the value of the rule,the theory foundation,the society background and the problem we faced.It should play a role that protects the legitimacy and the warning effect of the system and permeate the balance of the principle of exhaustion of internal remedies and the convenience of the procedure.Meantime,this part also attempts to find the improvable route to the discussed problems in consideration of following the pace of the law reformation,the development of the economy and thetendency of globalization.Part 4: This part offers some suggestions for the improvement of the pre-procedure:First suggestion is refining the provisions of the subjects by pinpointing the demander and accepter.For pinpointing the demander,the provision of the shareholding time of the judicial interpretation should be adjusted to the day the demand offered and the provision of the shareholding ratio should be replaced by a specific proviso.For pinpointing accepter,the specific person should be explicitly provided to represent the institution to accept the demand.And normally,the board of supervisors should be the accepter.The board of directors can only be the accepter when the board of supervisors is controlled by the infringer.When referring to the other infringer except the directors,managers and supervisors,the accepter should normally be the board of directors when it refers to outsiders.When the company is in the liquidation period,the accepter should be the liquidation team.Second suggestion clearly states the right and obligation of the subjects including the provision of the demand content and the provision of the report about why they decide not to sue and the obligation of informing to other shareholders.Third suggestion improves the demand excused facts.One is the categorization of the emergency,the another is the addition of the demand excused rule.