The Judicial Application Of Compulsory Dividend Distribution Rules Of Limited Liability Company

Compulsory dividend distribution rule is one of the typical manifestations of judicial intervention in corporate autonomy.The article 15 of the Judicial Interpretation of Company Law(IV)indicates that the compulsory dividend distribution rules have been preliminarily established.However,it can not be ignored that the compulsory dividend distribution rules still face some theoretical disputes and practical obstacles.The main theoretical dispute is whether the judiciary should intervene in dividend distribution.And the practical obstacle is not optimistic as well because it exists in the beginning and end of the judicial application of the compulsory dividend distribution rule:First,the judgment criteria of the applicable conditions of the compulsory dividend distribution rule are not clear,that is,how to determine the existence of abuse of shareholders' rights to initiate the compulsory dividend distribution rule;second,the realization path of the compulsory dividend distribution rule is unclear,that is,after judging the existence of abuse of shareholders' rights,it is not clear how to realize the compulsory dividend distribution rule so as to implement the relief for minority shareholders.It can be seen that the judgment standard of abusing shareholders' rights and the realization path of the compulsory dividend distribution rule are the core content of the judicial application of the compulsory dividend distribution rule.For a limited liability company,it shall first,demonstrating the legitimacy of mandatory rules of dividend distribution,on the basis of empirical research on the present situation and problems of the judicial application of the rules,and then carries on the judicial application of obstacles to its analysis and concluded that to improve the mandatory dividend distribution rules and its application.In view of this,this paper is mainly divided into the following four parts:Chapter one expounds the institutional advantages and theoretical basis of the compulsory dividend distribution rules in the limited liability company.For the limited liability company,the system of the compulsory dividend distribution rule has two advantages: one is to correct the alienation of the capital majority under the limited liability company;the other is to make up for the lack of effective alternative solutions under the limited liability company.Its theoretical basis mainly includes the company justice principle,small and medium-sized shareholder protection theory,the principle of good faith and abuse of rights theory.In general,for the limited liability company,the mandatory dividend distribution rule has legitimacy.Chapter two focuses on the application of compulsory dividend distribution rules in the limited liability company.In practice,it is found that the implementation effect of the compulsory dividend distribution rule is not ideal after it is established.The judicial application obstacles mainly include the unclear scope of the applicable situation,the unclear judgment standard of the applicable conditions and the burden of proof,and the simple judgment method of the compulsory dividend distribution.In the limited liability company,the specific cases of abuse of shareholders' rights are mainly manifested in three ways: controlling shareholders conceal or transfer the company's profits,controlling shareholders distribute profits in a disguised way,and controlling shareholders retain high profits.The judgment methods of compulsory dividend distribution mainly include the direct judgment of the company by the court to pay a specific amount of dividends to shareholders and the judgment of the company by the court to make a resolution of the board of shareholders with a specific distribution plan.Chapter three defines the judgment standard of abusing shareholders' rights under dividend distribution of the limited liability company.From the perspective of behavior,abuse of shareholders' rights is related to the fiduciary duty of controlling shareholders.From the perspective of results,abuse of shareholders' rights is associated with the reasonable expectations of minority shareholders.Therefore,on the basis of explaining the fiduciary duty of controlling shareholders and reasonable expectation of minority shareholders,this paper analyzes the standards of fiduciary duty and reasonable expectation respectively.Then the following conclusion is drawn: under the dividend distribution of the limited liability company,it is appropriate to select the judgment standard of abusing shareholders' rights,which is mainly based on reasonable expectation and supplemented by fiduciary duty.Chapter four establishes the realization path of compulsory dividend distribution rule.Under the guidance of the basic ideas,those are respecting of autonomy and business judgment of company at most and maintaining a balance between the interests of all parties,the court's particular way is: first,it shall give a deadline on which the company should make an effective shareholders' committee resolution of dividend distribution,meanwhile set forth a standard specific allocation with the reasonable minimum allocation standard accepted by the court;second,when determining the amount of profit available for distribution,it shall be based on the audit report of a professional organization;thirdly,the longest time for the shareholders' meeting to make a resolution can be determined by referring to the time for professional organizations to issue audit reports and the longest time for the company to complete dividend payment should be set in accordance with the article 4 of the Judicial Interpretation of Company Law(V).