Discussion Of Protection Of Limited Liability Companies Shareholders' Right Of Profit Distribution Claim

Through sorting out the existing ways of protection and relief in China's limited liability company's shareholders' profit distribution request,combining with the current situation of protection and relief of the limited liability company's minority shareholders' profit distribution request in our country's company law practice,this paper analyzes the existing problems from the two aspects of legislative protection and judicial relief.Afterwards,through the understanding of the relevant advanced systems in Britain and the United States,this paper analyzes the concepts and mechanisms that our country may draw lessons from,and from this point of view,puts forward suggestions to perfect our country's shareholder profit distribution protection system from the legislative and judicial perspectives.The brief content is as follows:The first part of this article is the basic theory of shareholder's right to claim profit distribution.In this part,the author gives a brief description of the definition and theoretical source of the shareholder's right to claim for profit distribution.The right of shareholders to claim profits distribution refers to the right that shareholders enjoy according to law to request the company to distribute the company's after-tax profits to themselves based on their qualifications as shareholders of the company.it is a basic right for shareholders to realize their investment goals.According to the classification of the nature of the shareholder's profit distribution claim right,there is a specific and abstract distinction between this right.The specific claim for profit distribution formed on the basis of the company's profit distribution resolution is the common creditor's right,which is applicable to the civil law litigation method of debt.China's " judicial interpretation of company law(iv)" has clearly stipulated this.However,the abstract shareholder's right of claim for profit distribution is based on the rights of fixed rights and expectation enjoyed by shareholders.At present,our country's legislation has confirmed the actionable nature of abstract shareholders' profit distribution claims.The theoretical sources of this right include: 1.the theory of reasonable expectation of shareholders,that is,the reasonable expectation of small and medium shareholders of the company is used to judge whether it is necessary to protect their right of claim for profit distribution;2.the principle of equality of shareholders means that all shareholders have equal status in the company and shall not be treated unfairly among the members of the company.3.shareholder's fiduciary duty theory,that is,in terms of the relationship between shareholders,this theory requires shareholders to exercise their power in a fair and trustworthy manner when they commit acts that may affect other shareholders of the company.4.incomplete contract theory,that is,it is impossible to conclude a perfect contract at the beginning of the company's establishment.when dealing with such contracts,one should make good use of the contract interpretation method to explain what kind of new contract should be reached after the blank part of the company's developing articles of association or shareholders' agreement that does not stipulate the adjustment rules has changed.The second part of this article analyzes the present situation and dilemma of the protection and relief of the shareholders' profit distribution request of our limited company.Among them,the problems of legislative protection include: 1.lack of mandatory norms for profit distribution;2.there is no restriction on the proportion of any provident fund;3.ignoring the role of the prior defense mechanism;4.the protection effect of the shareholder withdrawal mechanism is insufficient;5.the appeal against defects in resolutions of the board of directors and the shareholders' meeting is limited to formal examination.However,there are the following problems in judicial relief: 1.the protection of directors,senior management and other shareholders in direct litigation is insufficient.the identification of " abuse of power" is mere formality,and the proof of damage is very difficult.2.problems existing in shareholder profit distribution lawsuit.Including: the standard of " abuse of shareholders' rights" is not clear;the meaning of " defense reason for failure to implement the resolution" is not clear;the problem of symbolic profit distribution of the company has not been solved;the effectiveness of the judgment method of abstract dividend distribution lawsuit is poor;and the difficulty of proof of " causing losses to other shareholders" is difficult.In the third part of this article,the author introduces some parts of the protection and relief system for shareholders' profit distribution in foreign countries that are of referential significance to our country.The introduction of the " unfair damage system" in British legislation can help our company law to solve two problems: first,when the judiciary will interfere with the autonomy of the company,and second,how to make shareholders' profit distribution claims obtain substantial and effective relief through litigation.Unfair damages can cover most of the situations that are infringed upon during the distribution of the profits of the shareholders of the limited company,and can more fully protect the right of claim for the distribution of the profits of the shareholders.Because our country is not a case law country like England,we can draw a few judgment standards from the existing cases in England as a reference for our country's legislation.The United States protects shareholders' right to claim profits distribution through two measures,pre-defense and post-relief measures.Prior protection refers to how the various contents and steps in the profit distribution are agreed upon by the shareholders through an agreement before the occurrence of the profit distribution of the shareholders,so as to prevent disputes in advance and reduce judicial costs.In the legislation of the company,our country should point out more clearly the way to formulate the preventive mechanism in advance and clarify the rights,obligations and responsibilities among various subjects within the company.Afterwards relief is a special system of state-owned by China and the United States,that is,to distinguish the distribution of shareholders' profits.Including mandatory profit and discretionary profit.this system meets the interests of large and small shareholders at the same time,and can better conform to the objective reality of actual company operations.the protection of shareholders' profit distribution rights and interests in our country can also serve as a reference.In the fourth part,the author puts forward some perfect suggestions on the protection and relief of the shareholders' profit distribution right of our limited company.In the aspect of legislative protection,the author suggests: 1.to introduce mandatory norms of profit distribution and protect the interests of the company and creditors;2.strictly carry out any method of fund withdrawal,and specify the withdrawal conditions and proportion according to different situations;3.strengthen the preventive mechanism in advance,including prior consultation of the articles of association of the company and encouraging the conclusion of profit distribution agreements among shareholders;4.improve the withdrawal mechanism of shareholders,including clarifying the determination method of equity transfer price,expanding the scope of application of share repurchases,and specifying the determination method of repurchase price,etc.5.in order to perfect the lawsuit against the defects in the resolutions of the board of directors and the shareholders' meeting,the substantive examination level should be introduced in combination with the principle of " unfair damages" in England,so as to avoid the judgment becoming mere formality.The author believes that the perfection of judicial relief should include:1.Perfection of direct lawsuits against directors,executives and other shareholders.Among them,the legislation should clarify the situation of " abuse of shareholders' rights" in direct lawsuits against shareholders.However,the direct procedural law for directors and executives should specify the timing and even the calculation method of profits.The definition of " causing losses to shareholders" should also be clearly defined.2.In view of the perfection of shareholder profit distribution lawsuit,the author believes that on the basis of the existing legislation,it should be extended to the following aspects:(1)introducing discretionary shareholder profit distribution according to the actual conditions of the company's operation;(2)for the defendant company to bear the burden of proof in the abuse of shareholders' rights,its scope should include the subjective malice of the defendant company and the rationality of the withdrawal of the accumulation fund;(3)at the same time,the abuse of shareholders' rights will be detailed;(4)clarify the connotation of " the defense reason for failure to implement the resolution is established".(5)to expand the scope of application of the lawsuit of profit distribution,and to provide relief to the three cases of different degrees of infringement,namely " no distinction between advantages"," less advantages" and " advantages should be divided";(6)to perfect the applicable conditions of the shareholder's profit distribution lawsuit,it is necessary to clarify in the procedure that the lawsuit of mandatory distribution of shareholder's profit is an ex post relief mechanism provided for the shareholder's profit distribution dispute.to a certain extent,it is necessary to meet the requirement that the non-distribution of shareholder's profit should reach a certain time limit;(7)clarify the realization method of abstract dividend distribution claim right so that the judgment can be implemented and the judicial purpose can be truly realized.The author believes that the current legislative system of our country's company law still needs the above-mentioned progress in the protection of shareholders' right to claim profits distribution.