The Pass-through Exercise Of The Inspection Right Of The Parent Company’s Shareholders Under The Parent-Subsidiary Structure

Shareholders’ right to inspect is an important part of the shareholders’ right to know.As an inherent right in the shareholders’ equity,the shareholders’ inspection right shall neither be imposed too many restrictions in the exercise process,nor be arbitrarily deprived.By exercising right to inspect,shareholders can obtain corporate documents related to the company’s operation and management,so as to facilitate their participation in major decision-making,selection of managers and other shareholders’ rights.Under the framework of the parent-subsidiary companies,especially when the business assets of the parent company are mostly aggregated in the subsidiary company,the impact of the business management status of the subsidiary company on the shareholders’ equity of the parent company is no less than that of the parent company on the shareholders of the parent company.Therefore,the pass-through exercise of shareholders’ right to inspect is of vital importance to safeguard the legitimate rights and interests of the shareholders of the parent company.By exercising the shareholders’ inspection right of subsidiary’s documents,for minority shareholders of the parent company,it will satisfy their right to know and facilitate the exercise of other shareholders’ rights.For the group company,it will facilitate its transparency of operation,improve the efficiency of the company’s internal governance and promote the company’s sound development.Therefore,in the case where the shareholders of the parent company can properly and effectively exercise the pass-through right to inspect,the company and the shareholders can achieve mutual benefit and reach a win-win situation.The pass-through exercise of the parent company’s shareholders’ right to inspect is essentially the expansion of the object of the parent company’s shareholders’ exercise of the inspection right,that is,the scope of the object that the parent company’s shareholders’ inspect is expanded from the account books and records of the parent company to the books and records of its subsidiary.Articles 33 and 97 of the China Company Law respectively give shareholders of limited liability companies and joint stock companies the right of inspection,but neither of them has mentioned whether the shareholders of the parent company can exercise the right to inspect the business management information of the subsidiaries.In the absence of corresponding legal regime arrangements,the expansion of the parent company’s shareholder rights is likely to break the established power structure and balance of interests under the parent-subsidiary structure.For the breakthrough of the established power structure and balance of interests,it is necessary to have urgent practical needs,sufficient theoretical support and perfect system design,so as not to cause disorder in the existing corporate law system.This paper reveals the actual needs of the expansion of parent company’s shareholders inspection right,analyzes the legitimacy of the pass-through exercise of the shareholders’ inspection rights,draws on the extraterritorial experience,and combines the reality of China to construct the pass-through exercise system of a shareholder’s inspection right in line with China’s national conditions to maintain the legitimate rights and interests of the minority shareholders of the parent company.In addition to the introduction and conclusion parts,this article is divided into four chapters:The first chapter intends to start from the basic theory of shareholder’s inspection right and introduces the reasons and significance of the passthrough exercise of shareholders’ inspection right.Secondly,it reveals the legislative,theoretical and judicial dilemmas of the exercise of shareholders’ inspection right in China.In the end,from the perspectives of preventing abuse of corporate forms,responding to the needs of enterprise group development,and protecting the rights and interests of minority shareholders in the parent company,the author analyzes the necessity of the shareholders ’ inspection right to pass through,thus paving the way for subsequent discussions.The second chapter intends to analyze the legitimacy of the pass-through exercise of shareholders’ inspection right.Firstly,it puts forward the theoretical basis of the shareholders’ inspection right to pass through,and then further explores how to balance the shareholders’ inspection right and the independent personality of the subsidiary.The protection of interests of the subsidiary shall be taken into account while the inspection right of the parent company’s shareholders is vested.The third chapter intends to take the United States and Japan as examples to examine the different ways in which the shareholders’ inspection right is regulated by the US statute and equity law,and the Japanese Company Law to compare and analyze the relevant provisions of shareholders’ inspection right,and provide advanced foreign experience for China’s introduction of the pass-through exercise of shareholders’ inspection right.The fourth chapter intends to demarcate the boundary of the pass-through exercise of shareholders’ inspection right in regard to the parent-subsidiary relationship and the applicable situation.It focuses on how to make shareholders’ inspection right pass through under the existing legal framework.Through the analysis of the subject qualification,subjective purpose,object scope,and mode of exercise of shareholders’ inspection right,the main applicable rules for shareholders’ inspection right to pass through are clarified.