| Preference shares is one kind of the financing tools,which can effectively balance the high risk of venture capital and the demands of controlling power over the enterprises by entrepreneurs,however,issuance of preference shares as financing tool by start-up companies is not regulated from the perspective of legislation.Guidelines of the State Council on Launch of Preference Shares Pilot Scheme issued by State Council only provide that listed companies and non-listed public companies are allowed to issue preference shares,which has severely inhibited the development of venture capital market.On the one hand,following the deployment of venture capital market,it has been commercial practice and tendency for start-up companies to grow up by bringing in outside capital.In practice of venture capital area,investment terms imitating issuance of preference shares have been applied in real financing and investment transactions,which implies the strong craving of a flexible preference shares systems in venture capital area.On the other hand,in order to avoid legal risks and facilitate the exit from investment,a lot of venture capitals adopt the offshore investment model,which makes it difficult to enforce legal monitoring systems by Chinese authorities and results in a lot of outstanding companies or even companies in strategic industries are controlled by foreign capitals,as a result,it may increase the industrial risk and make domestic market unable to share the benefit of the development of such outstanding companies.By studying the protection of rights of preference shares holders in venture capital,from the perspective of market demands,analyzing the characteristics of venture capital investment and preference shares,this thesis discusses the factors that may affect the protection of rights of preference shares holders and the necessity to protect rights of preference shares holders,and further analyzes the compliance state of dividends preference,liquidation preference,restriction of voting power and repurchase of shares under the current framework of the Chinese Company Law.This thesis also makes reference to the preference shares systems and shareholder protection mechanism of other jurisdictions,and throughout discuss how to construct shareholder rights protection mechanism,from the aspects of selection of type of preference shares,arrangement of special rights,and arrangement of right of control and exit mechanism.In the end,this thesis puts forward some suggestions on the legislation of preferred share system in China based on the existing problem in venture capital area and current legislative situation.This thesis is divided into four parts to discuss the research of protection of rights of holders of preference shares.In the first part,the author briefly introduces the characteristics of venture capital,the basic implication of the rights of holder of preference shares,and the factors that may affect the protection of rights of holders of preference shares and the necessity to protect rights of holders of preference shares;in the second part,the author analyzes the framework of Chinese Company Law,the status of protection of rights of holders of preference shares including dividends preference,liquidation preference,voting rights,restriction on voting rights and repurchase of shares;in the third part,the author analyzes the protection mechanism of rights of preference shares in the United States which is a common law country and Germany and France which are civil law countries;and in the fourth part,the author puts forwards the suggestion of structuring the rights protection system of preference shares based on the existing problem in venture capital area and current legislative situation. |
