On The Action Of Mandatory Distribution Of Dividends Of A Limited Company

The main purpose of a shareholder to invest a company is to obtain dividend distribution.But too often,due to the difference in status between controlling shareholders and minority shareholders,there is inclination towards different benefits and interest between shareholders,even conflicts in severe situation,which further leads to the infringement of minority shareholders’ right to claim dividend distribution.The action of mandatory dividend distribution,newly regulated in the Provisions of the Supreme People’s Court on Several Issues concerning the Application of the Company Law of the People’s Republic of China(IV),is brought out in our legislative system for the first time to protect shareholders’ right to claim dividend distribution.However,obstacles still exist in theory study and practice.Chapter one of this paper is based on the concept of claims of dividend distribution,discussing the substantial requirements and procedural requirements concerning dividend contribution,the dilemma in judicial remedies between company autonomy and judicial intervention,and the current limited approach to judicial remedies,including both procedural and institute limitations.Chapter two mainly compares and analyses the legislative cases between common law system and civil law system,referring to unfairly prejudicial system in UK,and fiduciary duties in justifying a oppressive conduct and rational expectation standards in the US,as well as the legislative cases in common law country Germany and Japan.While the legislative cases in Germany focus on the right of cancellation on shareholders’ distribution resolutions and how shareholders should exert their cancelation right,the Japanese legislative cases discuss how to restrict the autonomy on non-distributive dividend.In Chapter three,research methods are taken to collect data concerning action of mandatory dividend distribution under the disputes of company distribution via China Judicial Online and Wolters Kluwer.These data are analyzed in both macro and micro perspectives,in order to conclude the judicial process for the action of mandatory dividend distribution,the conditions and possibility for minority shareholders to win a lawsuit,and the general reasons for the infringement of right to claim dividend distribution.The inclination towards different benefits and interest between shareholders,and deficiency and imperfection in distribution institute contribute a lot to the reasons.Chapter four sheds light on the Provisions of the Supreme People’s Court on Several Issues concerning the Application of the Company Law of the People’s Republic of China(IV).The subjects to claim the right regulated in current law system are discussed in this Chapter.Moreover,feasible advice is give on the following aspects:first,whether it is necessary to delete the part of“defenses of not executing a resolution” in the articles? Second,how to prove the existence of distributive profits and other factual requirements?Third,the distribution of burden of proof should relatively protect the minority shareholders in a reasonable way.Four,how should judicial decisions been formed concerning this issue?...