Autonomous Restriction And Deprivation Of The Defective Contribution Shareholder’s Right

On February 20,2014,the Supreme People’s Court issued the "Regulations on the Application of Certain Issues of the Company Law of the People’s Republic of China(III)"(hereinafter referred to as "Judicial Interpretation of Company Law(III)"),which made an interpretation for some substantive rules,such as the obligations and rights restriction,and deprivation of shareholders defective capital contribution.However,there is a evident absence of procedural norms in the process of companies restriction and deprivation of defective capital contribution.Merely summon exhortation requirement was defined in general,which leads to the lack of uniform operating standards in practice.Even worse,it severely affects the solution to shareholders of defective capital contribution due to the defect.Therefore,it is necessary to explore a integrate procedure for the autonomy restriction and deprivation of defective capital contribution in order to benefit the practice of the company.Firstly,positive responses are given to whether the company’s articles of association,resolutions of the shareholder meeting,resolutions of the board of directors,and agreements between shareholders that are not clearly stipulated by legislation can be used as the basis for initiating the procedure.Secondly,according to legislative demand,the pre-demand procedure should be constructed.While shareholders,directors,supervisors and senior managers are initiating bodies,the board of director and board of supervisor act as accepting bodies.This procedure adopts a twin-track acceptance mode that mainly based on board of director and supplemented by the board of supervisor.Then,new disposal approaches are established based on the ambiguous situation that the operation procedure and legislative and theoretical research about boundaries of operations,and overseas experiences.The approaches stipulate that if it is predefined in the articles of association and restricted to the defective capital contribution,people are informed by notice.In other cases,the form of resolution of the shareholder meeting is adopted.Moreover,this paper demonstrates that the voting rights of the shareholders regarded as defective capital should be ruled out,and the shareholders meeting applies the rules of the majority decision.By giving them the right to defence,it can protect the restriction period on demurrer,legitimate rights of the disposed shareholders.Furthermore,distinguishing restriction and defective deprivation capital provide clear boundary guidelines for disposing of defective shareholders.Finally,it proposes non-judicial remedy procedures and judicial remedy procedures for the rights relief of the shareholders regarded as defective capital contributions to improve further the procedure construction to deal with defective capital contribution shareholders.