Dual Class Share Structure And Protection Of The Interests Of Small And Medium Shareholders

The dual-class share structure originally originated in the United States at the end of the 19 th century and the beginning of the 20 th century.at that time,some family enterprises were able to maintain family control of the company under the condition of equity dilution after financing the company's listing,and out of the consideration of dealing with hostile takeovers,and so on.Begin to issue shares of the same share and different shares.Later,the dual ownership structure was widely used in the media,the Internet and other industries in the United States,but also adopted by many other countries in the world,and became an effective tool for founders to maintain the control of the company.As far as our country is concerned,some emerging enterprises often need a lot of financing in the early stage of growth and development,which is often accompanied by the dilution of equity and the loss of founder's control after multiple rounds of financing.The founders of this kind of enterprises have a strong demand for the control of the company,which results in the irreconcilable contradiction between the control of the founders of the company and the financing of the company.In the dual ownership structure,the founder can obtain the control of the company through less capital,thus effectively solving this problem.In addition,the reform of the mixed system of state-owned enterprises is also faced with the problem of whether state-owned capital can effectively grasp the control of the company,and there is also a lot of room for application of the dual ownership structure.At the same time,the capital market of our country is also facing the pressure of competition with the foreign capital market,which is illustrated by the choice of many domestic high-quality Internet enterprises to list abroad.Thus it can be seen that China has a strong institutional need for the dual ownership structure and the competitive demand of the capital market.However,the dual ownership structure was not allowed in our country.it was not until March 2019 that the Securities Regulatory Commission(CSRC)issued new rules to allow the joint-stock companies with special ownership structure to list in our country.The reason is that the dual ownership structure violates the principle of "the same shares and the same rights",which carries the democracy of shareholders and the equality of shareholders,which may lead to the moral hazard and opportunism of the controlling shareholders and increase the infringement of the interests of the minority shareholders.The biggest theoretical obstacle to the dual ownership structureis the principle of "the same shares and the same rights",which is based on the theory of "homogenization" of shareholders.Nowadays,this theory is constantly challenged,and the theory of shareholder "heterogeneity" is beginning to be accepted by more and more scholars.The theory of "heterogeneity" of shareholders is consistent with the dual ownership structure,which can become a powerful support for the dual stock ownership structure.In addition,the contract theory,which emphasizes corporate autonomy,also supports the dual ownership structure.However,it is undeniable that there are certain institutional risks in the dual ownership structure itself,the most important of which is the infringement of the interests of minority shareholders.If we can solve this problem,it will help to give full play to the advantages of the dual ownership structure,but also effectively prevent its institutional risks.This paper uses the research methods of theoretical analysis and comparative analysis to demonstrate the rationality of the dual ownership structure from the theoretical basis level,the institutional advantages of the dual ownership structure and the realistic demand level.The dual ownership structure is compared with the traditional "one share,one right" and Alibaba's "partner" system,which shows that the dual ownership structure is a more appropriate and effective way to maintain corporate control in our country at present.On the basis of analyzing the institutional risk of dual ownership structure and drawing lessons from the practical experience of other countries and regions,this paper puts forward some suggestions for protecting the interests of minority shareholders under the dual ownership structure.Including restricting the application of super voting rights,strengthening the supervision of independent directors,improving the information disclosure system,strengthening ex post facto relief,increasing illegal costs,improving the structure of investors,and so on.