A Research On Judicial Relief Of Shareholders' Claims Of Abstract Dividend Distribution In Limited Liability Companies

The purpose of the shareholders who invest companies is to make a profit.The right to distribute dividends is the embodiment of the most important asset income right and is the core of the equity property rights.When the specific dividend distribution claim right is violated,the shareholders can seek relief from the court according to the creditor theory.However,the abstract dividend distribution claim right as the expectation right can be disputed.The closed nature of the limited liability companies makes the shareholder's abstract dividend distribution claim right vulnerable to the infringement of the controlling shareholders or the actual controllers.The existing remedies in the company law do not provide the direct and effective protection path for the small and medium shareholders.After the introduction of the fourth Judicial Interpretation of the Company Law,the fifteenth article of the interpretation has attracted widespread attention.It is considered by the academic circles to be the door to the mandatory dividend distribution lawsuit,but the provision is vague and poses great challenges to judicial practice.This paper studies the abstract dividend distribution claim and finds out the reasons for its infringement and the lack of existing legal protection.This paper will combine the current situation of judicial practice and improve the judicial relief path to protect the abstract dividend distribution request right.This paper analyzes the 336 relevant cases which were downloaded from China Judgements Online including referee documents from 2013 to 2017,and analyzes some typical cases.The claim of the abstract dividend distribution of small and medium shareholders in a limited liability company is more vulnerable to violations and it is difficult to obtain direct and effective judicial relief.Data found that 95% of the cases in which the dividend distribution of shareholders was infringed occurred in limited liability companies,and 94% of the cases in which the plaintiff shareholders held shares were less than 50%,indicating that the minority shareholders' abstract dividend distribution claims are more vulnerable.70% of the cases of plaintiff shareholders do not work in the company,so they can not enjoy the benefits of wages,bonuses,etc.,when the company does not pay dividends and internal employees enjoy high benefits,the right to distribute dividends is more vulnerable.In the first instance of 49% of the cases,the summary procedure was applied.That is,nearly half of the courts in the first instance held that the case in which the shareholders requested the company's dividend distribution was not complicated and could be tried by a judge.92% of the courts require the plaintiff's shareholders to bear the burden of proof that the company has distributable profits and a dividend distribution resolution.The plaintiff is in danger of losing the lawsuit if it fails to provide these materials.22% of the courts of first instance held that the judiciary should respect the autonomy of the company to determine its own affairs.Judicial power should not be involved before the shareholders' meeting did not make a resolution.41.8% of the courts of second instance did not want to intervene in the protection of the abstract dividend distribution claim.In addition,clear shareholder status,actual payment of capital,distributable profits after deducting taxes and provident fund according to regulations,regulations on profit distribution in the articles of association,or agreements on profit distribution among shareholders are all key factors in court trials.When the plaintiff's shareholder proves that there is a plan about profit distribution,the probability that the court will protect its dividend distribution claim is greater than that of the non-profit distribution plan.When the share of equity is greater than 10%,the greater the share of equity,the more the court tends not to interfere with the company's dividend distribution.The three months after the implementation of the Judicial Interpretation of the Company Law did not cause a surge in the number of such cases.In addition,most courts require the plaintiff's shareholders to bear heavy burden of proof,resulting in the plaintiff's substantive rights falling through.The judicial practice of “the abuse of shareholder rights by major shareholders violates the interests of other shareholders” does not form a unified cognition,so that the protection of abstract dividend distribution claims is still in an elusive state.This paper believes that the distribution of dividends belongs to the company's autonomous affairs,unless when the autonomy becomes alienated,the judiciary has the necessity to intervene to make up for the limitations of the company's autonomy.The introduction of compulsory dividend distribution litigation has become a powerful means of protecting the minority shareholders' abstract dividend distribution claims,and also acts as a deterrent to the company's controlling shareholders or actual controllers.When a court hears a mandatory dividend distribution lawsuit,uniform procedural rules and refereeing standards shall be applied.For example,the conditions for prosecution shall include the company's existence of profit available for distribution,the existence of a company's indivisible or symbolic minority or avoiding the distribution of profits,the controlling shareholder or the actual controller has malicious acts of exercising power,and the shareholders have exhausted the internal remedies of the company.In the trial,the burden of proof of small and medium-sized shareholders should be alleviated,and the burden of proof should be allocated reasonably.In the cases of no profit distribution plan,the court may actively rely on the accounting firm to audit the company's finances and determine the amount of company's distributable profits based on the experience of the judge.It is necessary to pay attention to strictly grasp the boundary of judicial intervention.When the behavior of the major shareholder does not belong to reasonable commercial judgment and seriously damage the interests of the minority shareholders,it is determined that the major shareholder has the malice of abuse of shareholder rights.It is recommended that the company law increase the mandatory dividend distribution litigation clause,refine the operational path of the fifteenth article of the judicial interpretation of the company law,and provide a clear legal basis for the mandatory dividend distribution lawsuit.In addition,the charter should include the profit distribution plan in the absolute necessary record,and agree to withdraw the maximum amount of the any provident fund.If the limit is exceeded,the company must distribute the profit.Only by combining prior prevention with ex post relief can we effectively protect the right of small and medium shareholders to distribute dividends.