Research Of The Legality Of Anti-takeover Provisions In The Articles Of Association Of Listed Companies

In recent years,there have been several hostile takeovers of listed companies in China’s capital market.In order to prevent the transfer of control caused by hostile takeovers and the forced departure of management,more and more listed companies want to learn from foreign experience.Various anti-takeover clauses have been added to the company’s articles of association,but the legality of these anti-takeover clauses has been questioned.Anti-takeover clauses are clauses created by the shareholders of the company based on their own autonomy.Whether such clauses are valid depends on whether the content of the clauses exceeds the boundaries of the autonomy of the company’s articles of association.It is stipulated that,for listed companies,the boundaries of their charter autonomy are particularly restricted,and the legal space for anti-takeover clauses is extremely limited.This article combines the qualitative nature of the trust relationship between the company and the directors as determined in the "Company Law Judicial Interpretation 5" and related theories,and focuses on the analysis and discussion of two types of anti-takeover provisions that restrict shareholders’ re-election of directors-absolute majority voting terms and restrictions on re-election directors,And the anti-takeover clause to increase directors ’compensation—the golden parachute clause.First of all,for absolute majority voting clauses,such clauses increase the voting rights requirements of the shareholders ’general meeting to pass resolutions,so that all proposals at shareholders’ general meetings require the consent of a greater number of shareholders to pass.In China’s "Company Law" and other laws and regulations,the minimum voting rights ratio of all shareholders passed by the resolution of a company limited by shares is not stipulated.The requirement for a higher voting rights ratio for important matters such as amendments to the articles of association also reflects caution on these matters.From a value perspective,the capital majority decisionmaking form reflects the balance between democracy and efficiency on the basis of equality,and increasing the voting right requirements for forming a resolution reflects shareholders at the cost of certain efficiency.The democratic nature of the General Assembly,combined with relevant judicial practice and empirical research results,such clauses should be considered legitimate.Secondly,with regard to restrictions on the proportion of directors to be reelected,such provisions stipulate that the number of directors for each re-election must not exceed a certain percentage of the total number of persons,which delays the progress of the restructuring of the board of directors of the acquirer.Based on the trust relationship between the company and the directors,when the collective will of the shareholders meeting changes and the trust relationship between the company represented by the shareholders meeting and the directors is lost,the termination of the trust relationship is a more favorable choice for both parties.Limiting this process in the articles of association is not in line with the interests of all parties and is not conducive to the company’s stable operation.Therefore,such provisions should be invalidated.Finally,with regard to the golden parachute clause,combined with the provisions of the "Company Law Judicial Interpretation Five" and related literature research,in the case where the employment contract between the director and the company has no special agreement on compensation for termination,the director’s compensation for termination shall be equal to the remaining term of office of the director Within pay.The golden parachute clause stipulates that directors can receive a high one-time termination compensation after leaving,which is a special agreement in the employment contract between the director and the company.Its role is not only to protect the material life of directors after they leave,but also to attract them.Talent,certain anti-acquisition effects,etc.In China,the questions on the golden parachute clauses mainly include interest transmission,breach of fidelity obligations,and unreasonable amounts.In view of this,based on the fairness standards of directors and the company’s self-transaction,the director should prove that the compensation clause has been established when a dispute arises.Proof of fairness through proactive disclosure of stakeholder and uninterested shareholder voting,and the amount of compensation should also be set within a certain limit,that is,based on the remuneration of directors during their remaining terms of office,which can be appropriately higher than this standard but should be Within reasonable limits.Based on the "The Judicial Interpretation of the Company Law 5" on the determination of the trust relationship between directors and the company and related theoretical analysis,this article believes that the absolute majority voting clauses do not violate China’s laws and should be considered valid.The restrictions on directors’ re-election proportions limit the appointment and removal of directors Rights shall be deemed invalid,and the golden parachute provisions shall also be considered valid if they have performed appropriate voting procedures and the amount is reasonable.