Research On The Identification And Variation Of Classified Rights

As the name suggests,“Classified Rights” is the general term for a series of special rights attached to classified stocks by the shareholders.The Classified Stocks,which may also be called special stocks or classified stocks,is the collective name of other shares that are different from ordinary stocks,and constitute different categories due to the different rights attached to them.From the perspective of comparative law,classified stocks and classified rights are all the concepts of English law.Thereinto,classified rights refer to a series of special rights that are different from ordinary stocks in certain categories of shareholders such as dividend distribution,exercise of voting rights,and liquidation of residual assets.Because the preferred stocks typically embody the dual-attribute characteristics of classified stocks,it belongs to a typical classified stock,and the special rights attached to them are called priorities.In fact,regardless of preferred stocks or priorities,classified stocks or classified rights,there are certain explorations in the theoretical,practical,and judicial circles within and outside the domain.Among them,the results of extra-territorial research are relatively mature,especially the series of rules for identification and variation of classified rights established by the UK case law.In addition,the United States,South Korea,Japan,Germany,France and China's Hong Kong and Taiwan regions also have corresponding exploration and practical application,and have gradually formed a system of classified rights with local characteristics.These extra-territorial advanced experiences have some inspiration and reference for the study and construction of the localized classified right system in our country.Specific to the theoretical research and practical application of China's mainland,the research on the issue of preferred stocks has gradually become systematic in the theoretical community,especially the research on voting rights of preferred stocks.Recently,the State Council,the Securities Regulatory Commission and the other departments have successively issued series of documents on the trial and promotion of preferred stocks,and the practice community has also begun to try to use the preferred stocks to expand the company's financing channels,facilitate investors' investment,and improve the company's shareholding structure.That means the preferred stock system is constantly playing its institutional value in China's homeland,and both the theoretical research and practical application are increasingly perfect.However,it goes without saying that relatively few scholars in China's theoretical circle specialize in the study of classified stocks and classified rights,which are usually mentioned when introducing the issue of the type of company's stocks or the voting rights of preferred stocks.Secondly,the legal status of classified stocks and classified rights has not yet been defined in the relevant legal system in China.Although,there are several relevant normative legal documents,these documents are generally of low effectiveness,and relevant regulations are not systematic or even conflicting.Furthermore,existing preferred stock practices have not fundamentally implemented their institutional advantages,such as protecting the legitimate rights and interests of small and medium shareholders,resolving corporate financing difficulties,and optimizing corporate governance structure.And finally,preferred stock only belongs to one typical category of stocks.The existence of specific classified rights does not mean that China has established a system of classified right.Therefore,a further theoretical research and discussion is needed to build a localized classified rights system.Hence,with the implementation and promotion of China's preferred stocks,it is urgent to carry out systematic research and theoretical analysis on the theoretical system of classified stocks and classified rights.It has been found that the establishment of a local institutional system of classified stocks and classified rights is crucial and necessary to reform and improve the corporate governance structure,build a multi-level capital market,meet the investment needs of different investors,and even perfect the company's shareholding system,solve the company's financing difficulties,and build a systematic equity theory.Although some scholars believe that the concepts of classified stocks and classified rights are defined in two cycles,it is undeniable that the key and prerequisite for differentiating the company's different types of shares and shareholders and building the company's shareholding system is to accurately identify the special rights attached todifferent types of shares,that is,classified rights.Only by accurately identifying different classified rights,clarifying what is the change of classified rights,and how to change classified rights and establish corresponding identification and variation rules,can we build a sound system of classified rights,and can the institutional value of classifieds and classified rights be fulfilled.For providing advice and suggestions on how China's corporate system is integrated with the development track of international companies and the improvement of the company's shareholding system,through multiple methods and multi-dimensions such as case study,comparative analysis,value analysis,and historical analysis,this article intends to explore the nature of classified rights,accurately identify different classified rights,and establish corresponding identification rules;to study different situations of variations of classified rights and the specific rules and regulations of the variations;at the same time,to analysis the existing situation of China's preferred stock combining the existing provisions of numerous prescriptive laws such as the "General Principles of Civil Law","Company Law" and "Securities Law",and to analyze the necessity and theoretical and practical significance of introducing and building a localized classified right system in China.Specifically,the article is consisted of the following six parts:The introductory part puts forward the question first,introduces the background of the topic of this article and the theory and practical significance;then,starting from the research status of the relevant stocks and classified rights in and outside the domain,systematically reviews and summarizes the existing research results,and points out that the current theoretical and practical circles face certain bottlenecks in the institutional research and application of classified stocks and classified rights,and it is urgent to conduct in-depth research and discussion;finally,briefly introduces the main research methods of this paper.The first chapter is the theoretical starting point of this article.First of all,it explores the nature and power of equity,analyzes the right composition of equity,and points out that the shares have different capabilities,according to which stocks can freely combine and form share types with different forms of rights.This is the legal basis for classified stocks.Secondly,it explores the nature,the institutional value and the relationship with the principle of equality of shareholders of the classified stocks,and points out that the classified stocks do not violate the principle of equality of shareholders,which is a deep understanding and implementation of the principle.Thirdly,it analyzes the characteristics and nature of classified rights,and proposes that classified stocks and classified rights aregeneric concepts,both of which are cyclically defined and essentially a kind of balance mechanism that balances and rebalances the interests of different shareholders of the company and protect the legitimate rights and interests of minority shareholders.Finally,it analyzes the jurisprudential value,institutional function and practical significance of the introduction of the classified right system in China,and points out that it has important theoretical and practical significance to construct the rule of classified rights system in our country.The second chapter is the first research topic of this article-the identification of classified rights.This chapter mainly includes two major issues: why to identify the classified rights and how to accurately identify the classified rights.In this part,firstly the necessity of classified rights' identification is explored by combining the value function of classified rights and the purpose of identifying classified rights.Secondly,combining with the classical discussion of classified rights' identification in extraterritorial jurisprudence,it analyzes the general abstract standard of classified rights' identification in case law.Finally,it briefly introduces and analyzes the specific types of classified rights under different modes of legislation,which will lay the foundation for the subsequent construction of localized identification standards of classified rights.The third chapter is another research topic of this article-the variation of classified rights.This section mainly addresses two major issues: what is the "variation" of classified rights and how to "alter" classified rights.First of all,the chapter is also imported with extraterritorial judicial precedents,analyzes the "variation" situation of classified rights in case law,and explores what's the "variation" of classified rights under different legislative models.Then,it explores how to "alter" the classified rights and its specific procedural rules in conjunction with the statute-type categorization rules of various countries and regions.Finally,from the level of substantive law and procedural law,the author analyzes the basic rules and criteria for the construction of variation of classified rights,which lays a logical foundation for the construction of localization of variation of classified rights.The last chapter is the focus and the core content of this article.Firstly,from the examination of China's existing shareholding structure,it points out that China has specific types of classified rights.However,the legal system rules related to classified rights have not yet been established in the company law system of our country,and no practical rules have been formed in practice,which have led to a series of issues arising from the application of specific laws.Secondly,combining the nature of classified rights,to establish a classified rights system in China should always follow and implement severalbasic principles and spirits: legality,openness and fairness,balance of interests of different shareholders,and maximization of the company's overall interests.Thirdly,from the point of view of substantive law,the specific rules for the identification and variation of China's classified rights should include the rules of the company law,the specification of the company's articles of association,and specific practical applications and so on.Finally,combined with related supporting systems,it explores the procedural rules that China should follow to build the rules of identification and variation of classified rights,i.e.build a class shareholder meeting mechanism.In summary,this paper expects to use the previous theoretical research results as a basis to improve the theoretical research on the issues related to classified rights,and provide a solid legal basis for China to establish a localized classified rights system,perfect the corporate governance structure,and protect the legitimate rights and interests of small and medium shareholders.At the same time,it also seeks legal basis for companies to issue classified stocks,create classified rights,attract investment,and expand financing paths in practice,thus providing legal basis for China's judicial practice to resolve classified rights disputes.