On The Perfection Of The Judicial Rules Of The Shareholder’s Representative Action Of The Limited Liability Company In China

Shareholder ‘ s representative action refers to a lawsuit in which the company is unwilling to file a relief lawsuit in order to protect the interests of the company and infringe on the legitimate rights and interests of the company,and the legally qualified shareholders sue the infringer’s legal liability in their own name.Its characteristics are mainly manifested in the following six aspects: first,the establishment of shareholder representative litigation must be based on the premise of damaging the interests of the company;second,the shareholders must perform the legal pre litigation procedures;third,the company cannot be the defendant of the litigation,and the plaintiff must have the status of shareholder in the whole litigation;fourth,the litigation results are expansionary,and the shareholders of the litigation must not participate in the litigation if the plaintiff does not participate in the litigation Fifth,the interests of winning the lawsuit shall belong to the company.Finally,the people‘s court shall issue a conciliation statement only after the following situations are solved: the company’s sharehol‘ers’ meeting and the board of directors pass.At the same time,these characteristics are different from the direct behavior of shareholders.Shareholder’s direct litigation relief is the shareholder’s personal interest.In the lawsuit,the company can be the defendant,and the plaintiff’s qualification is not limited to the identity of the shareholder in the lawsuit.The result of the action only limits the participants of the action,and the in’erests of winning the action are enjoyed by the plaintiff.Mediation in litigation also follows the principle of party autonomy.With the reform of economic system after the Third Plenary Session of the Eleventh Central Committee,the shareholder representative litigation system of China’s limited liability company has also entered the embryonic stage of legalization.In 2005,the company law standardized the legislation for the first time,differentiated the litigation qualification of shareholders according to the nature of the company,and expanded the scope of litigation defendants.After that,the Supreme People’s Court issued five judicial interpretations to improve the shareholder representative litigation system from the aspects of litigation qualification,company status,pre procedural immunity,reconciliation procedure and scope of application.It not only has the relief function of protecting the interests of the company and shareholders,but also has the prevention function of disputes,that is,the supervision function of the interests of the company and shareholders.It is found by retrieving the dispute cases of “liability for damage to the interests of shareholders” from 2008 to March 2020 that,in addition to the three-month data in 2020,with the revision of the company law in 2013 reducing the threshold for the establishment of the company,the number of cases has increased sharply since 2014 and the overall trend is on the rise.There are 2388 cases in the first instance,with a winning rate of 10.43%,an appeal rate of 38.3%,an amendment rate of 8.42%,a retrial rate of 9%,and a retrial rate of9% The rate of trial and judgment is 3.26%,and the types of contradictions are diversified.In 2018 and 2019,the court‘s hearing opinions began to appear more frequently,which combined with the provisions of judicial interpretation(IV)of the company law and Article 151 of the company law issued in 2017 as the judgment basis for rejecting the lawsuit or appeal.A small number of judges will explain the reasons for the change,and then apply the substantive basis of shareholder representative litigation to hear.In thecourt’s ruling,it is a normal practice for the plaintiff to mistakenly bring a shareholder‘s direct action and be dismissed for confusing the company’s interes‘ with the shareholder’s inte ’ est,or for the plaintiff to be dismissed for not having the right of direct action.However,this type of case is increasing or decreasing.The basis of shareholder’s right to sue for shareholder’s representative action is an important factor to determine the direction of the case.The case analysis of “dispute of liability for damage to shareholder’s interests” finds that the direct action of shareholder is wrongly applied due to the improper understanding of the legal provisions of shareholder’s representative action,or the case that the shareholder’s direct action has to be chosen for judicial relief but lost due to the failure of shareholder’s representative action It continues to exist universally,and even the phenomenon that rights cannot be remedied appears,which shows that there are still four problems in the shareholder representative litigation of China’s limited liability company: the difference in understanding the legal rules,the lack of the plaintiff’s qualification examination,the difference in defining the company’s interests and shareholders’ interests,and the dispute on the analysis of causality.Due to the influence of various external factors,the courts at all levels have deviation in understanding the legal provisions,which will result in the phenomenon of different judgments of the same case objectively.At the same time,due to the lag of the law,it can not be applied to various types of internal and external conflicts and disputes in practice,and the shareholders lack a unified application standard in the choice of litigation path,so the root of the problem is It lies in the deviation of judicial concept,the defect of current legal rules and the deficiency of specific supporting system.The perfection of shareholder’s representative action in China’s limited liability company conforms to the original intention of the company law to protect the rights and interests of investors,and also meets the needs of judicial practice in recent years.First of all,we should reshape the concept of justice,pay attention to the balance between the interests of the entity and the interests of the procedure,and improve the litigability of the law.Secondly,we should perfect its legal rules,expand the scope of the plaintiff who brings the shareholder representative action,determine the litigation qualification by whether it has the shareholder status when the infringement occurs,and at the same time,we should use the unfair damage principle of England for reference to determine the legal rationality of the infringement,and strictly regulate the causality to avoid excessive judicial intervention.Thirdly,in view of the judicial difficulties,we should perfect the judicial rules,which should be connected with the disputes of shareholders’ right to know.In terms of the rules of proof,we should adopt the inverted rules,and at the same time,we need to play the role of guiding cases.Finally,improve the design of litigation supporting system,strengthen the regulatory role of the company’s articles of association,take responsibility in the form of contract,and learn from the concept of fiduciary duty in the company contract of common law system.