On The Introduction And Perfection Of Dual-class Share Structure In Mainland China

Dual-class share structure is a special share structure which separates voting rights and earnings rights.With a history of nearly 100 years,it has been widely used in capital markets of European and American countries.In recent years,the structure has been adopted by more and more Internet companies and high-tech enterprises.The huge advantage of the dual-class share structure is that the founder of a company can continue to control the company even when its share is diluted by the company's acquisition of financing.In the introduction part,illustration is made on the domestic media's attention to the practice of dual-class share structure and the current situation of research on dual-class share structure in domestic academia.In the first part,discussion is conducted on the concept and connotation of the dual-class share structure.On one hand,the characteristics of the dual-class share structure are introduced from the aspects such as the inequality of voting rights,the equality of property rights,the characteristics of the holders of B shares,the different liquidity between B shares and A shares,and the one-way conversion between B shares and A shares.On the other hand,the dual-class share structure is compared with other similar structures such as the preferred share structure and the "partner" structure of Alibaba,and the differences between it and other similar structures are discussed in this part.In the second part,the theoretical value of the dual-class share structure is analysed and discussed from the three values of modern commercial law,namely,efficiency value,share value and security value.Specifically,the efficiency value of commercial law embodied in the efficient decision-making advantages of the dual-level share structure in modern corporate governance is discussed from the following four aspects: maintaining the strategic stability of the company;improving the efficiency of internal decision-making;improving the execution efficiency of corporate decision-making;and increasing the financing scale of the company.Based on the analysis of the differentiated interests demand and corresponding rights and obligations arrangement between founder(s)and different investors,the dynamic embodiment of the share and safety value in the dual-class share structure is expounded,and the guarantee of share and safety value by dual-class share structure is discussed from the aspacts of market supervision mechanism and legal remedies.In the third part,it talks about the historical evolution of the dual-class share structure.The structure first came into being at the end of the 19 th century and the beginning of the 20 th century and,after nearly a hundred years of development,has now become a widely accepted special share structure.Meanwhile,taking Google,Facebook and JD as examples,typical cases of dual-class share structure are introduced.In the fourth part,analysis is made on the rationality of the construction of dual-class share structure in China,and it is proved that it is necessary to introduce and perfect the dual-class share structure in China from three aspects: the demand for long-term stable development of enterprises,the demand for institutional innovation of state-owned enterprises and the demand for attracting high-quality enterprises to be listed in China.In the fifth part,it talks about the introduction and application of dual-class share structure in GEM in China for the first time.In accordance with the GEM Listing Rules of Shanghai Stock Exchange,the issue is analysed and discussed from the following four aspects: the precondition of setting up differentiated arrangement for voting rights;the subject qualification of shareholders with special voting rights and the subsequent change restriction;the full safeguard of the legitimate rights of ordinary voting shareholders;strengthening the information disclosure and supervision mechanism by companies.Meanwhile,some suggestions are put forward on the improvement,regulation and remedy of the dual-class share structure in China from the aspects of legislation,information disclosure structure,independent director structure,restraint of articles of association,investor litigation structure and so on.