On Judicial Intervention Of Company Profit Distribution

Obtaining the profit distribution of the company is not only the fundamental purpose of the shareholder investment company,but also the legal right given to the shareholder by the Company Law.In this regard,Article 4 of the Company Law of China clearly stipulates that "shareholders of a company shall have the right to enjoy assets income,participate in major decisions and select managers according to law." However,the realization of shareholders' claim for profit distribution depends not only on the profit status of the company,but also on whether the shareholders will vote on the profit distribution scheme.The corporate autonomy based on the capital majority decision is actually the majority shareholders' control of the company's operation and management with the majority investment.Therefore,whether and how to distribute the profits of the company involves both the operation of the corporate autonomy and the exercise of the rights of the majority shareholders.The difference in the amount of shareholder investment makes it possible to hide potential conflicts of interest within the company.On the profit distribution of a company,this conflict can be shown as between different business philosophy to the profits to the company shareholders is reserved for reasonable investment development or return for shareholders conflict,can also be characterized by big shareholders abuse of rights control shareholders' profit distribution resolution to damage other shareholders' investment profit of reasonable conflict.At this time,if the shareholders seek judicial relief from the court in order to realize the investment income right,the judicial power should actively intervene in the company autonomy and safeguard the fair and just value in order to protect the shareholder's investment income right.However,the provisions of the Company Law on the claim for profit distribution of shareholders are too general,which leads to the fact that in judicial practice,the court cannot provide effective judicial relief if a small share requests a court for compulsory distribution of company profits on the basis of shareholders' qualifications.The reasons are not only the restriction of the thinking of private law autonomy on commercial judgment,but also the restriction of commercial judgment rules on judges' discretion,as well as the unsound provisions on compulsory profitdistribution litigation in the current Company Law.The exercise of shareholders' claim for profit distribution depends too much on the internal autonomy of the company,which leads to the failure of the external judicial power to provide effective relief,which to some extent affects the shareholder's enthusiasm for investment and is not conducive to the development of the modern corporate system.Therefore,from the perspective of legal norms,it is necessary to make more detailed provisions on the compulsory profit distribution litigation of the company,so as to provide a clear legal basis for the judicial power to intervene in the profit distribution of the company,so as to better safeguard the shareholders' right to profit from investment.The intervention of judicial power in the company's profit distribution is,to a certain extent,a denial of the company's autonomy.Therefore,the intervention of judicial power in the company's autonomy must have a legitimate basis,which can be derived from written legal norms,guiding cases of the supreme people's court,or agreed provisions on profit distribution in the company's articles of association.At the same time,judicial power involved in corporate profit distribution should avoid blindness,while upholding the principle of fairness and justice,we should respect the principle of corporate autonomy and minimize the damage to corporate governance structure.Under the circumstance that the compulsory profit distribution system of companies is not perfect in the Company Law,some specific conditions in the distribution of company profits should be made clear by the judicial power,and how to determine the amount of profits should be allocated by the judge in the judicial trial.How to identify the fact of "abuse of rights by large shareholders" should be further clarified in the Company Law,which is the condition for the judicial power to intervene in the profit distribution of the company.In the process of the judicial power involved in the profit distribution of the company,we should also pay attention to the procedure,and should distinguish whether the shareholders' meeting has voted on the profit distribution scheme,which is not only related to the maintenance of the company's autonomy.It is also related to whether the judicial power can effectively protect the shareholders' rights and interests in the profit distribution of the company.