Research On Legal Issues Of Dual-class Share Structure

For a long time,China's company law has pursued one vote per share system,but Article 131 of the company law leaves room for the design of the dual-class share structure.In recent years,with the establishment of many science and technology-based enterprises,the oretical and practical circles have begun to re-examine China's equity system arrangements.In 2019,the landmark dual-class share structure was officially opened,giving different types of equity with different powers and values.The dual-class share structure through the different equity arrangements for different stocks,so that the founder team can obtain higher voting rights for special stocks with less capital considerations,thus maintaining a stable control of the company.The dual-class share structure not only has important significance for the company to resist malicious mergers and acquisitions and resolve financing conflicts,but also meets the diversified investment needs of heterogeneous shareholders and promotes the long-term development of the capital market.With the improvement of the rule of law environment in the capital market,the development of the economy promotes the birth of all types of enterprises,and the institutional arrangements should also follow the needs of the times.The dual-class share structure that has been' developed overseas for more than 100 years was introduced into China's capital market in February 2019.The article starts from the current situation of the legal regulation of China's dual-class share structure,and analyzes the specific rules of the dual ownership system in China.China's dual-class share structure has problems such as unclear specific rules of the supervision mechanism,unclear specific rules of the rotation mechanism of special voting rights,and lack of effective judicial remedies.The regulation of the dual-class share structure outside the territory is usually coordinated by the legal provisions and the autonomy of the charter.There are common methods of dividend preferential treatment,preferential voting methods,and distribution of dividends.This article takes Xiaomi Group and Alibaba as examples to analyze the design arrangement of dual equity structure under the extraterritorial legal system.Through the empirical analysis of the extraterritorial system,it is clear that while constructing a diversified shareholding structure in China,it is necessary to further strengthen the director's fiduciary duty and improve the company's supervision mechanism.Through the analysis of the status quo of China's dual-class share structure regulation and the experience of the implementation of the dual-class share structure outside the territory,the article points out the following perfect opinions.First of all,China should recognize the legitimacy of dual equity at the level of company law,amend the legal provisions of one share and one right,and at the same time,in the construction of the dual equity system rules should abide by the basic concept of company law-the principle of equality of shareholders.Secondly,in the design of the specific rules of the dual-class share structure,the provisions of the supervision rules should be clearly defined,and the provisions of the sunset should be introduced.In addition,the construction of the supporting system should focus on the protection of the rights and interests of small and medium-sized shareholders,strengthen the supervision of corporate information disclosure,and strictly stipulate the content of disclosure and punishment measures.Finally,we will further improve China's securities support litigation system and provide effective and convenient judicial relief for investors whose rights have been infringed.