Study On Voting System Of Preferred Stock Class In China

Preferred Shares,unlike common stock,is a class stock in China.With the stability of income as a significant advantage,it satisfies the investor’s risk aversion preference and obtains the favor of investors.For the funder,its limited voting rights ensure that the company’s control is not transferred,avoiding the possibility that the company will be susceptible to a large number of shares issued.The advantages of preferred stock,on the one hand,make it popular,become an important investment and financing tool in the modern capital market,on the other hand,make preferred stock become a very special kind of shares.Preferred shares have the dual attributes of creditor’s rights and equity.However,at the level of legislation and judicial practice.The preference stock is referred to as "priority" mainly in its priority distribution of dividends and priority distribution of property interests such as surplus property,while its voting rights are restricted as a rights replacement.But restricted voting rights do not mean that preferred shareholders are denied the right to vote.In the decision-making of some company matters,the voting rights of the class.Most of the countries that issue preferred shares have the right to vote on the categories of preferred shares.Depending on the rules,preferred shareholders may have a say in some company decisions according to different procedures.As a kind of pre-relief way for preferred shareholders,the exercise of the voting right of category can greatly reduce the possibility of the shareholders’rights and interests of preferred shares being infringed by the company,and is an effective way to protect their rights and interests Moreover,under the background of constructing the two-tier equity structure in our country,the two pillars of constructing the two pillars of the two-tier equity structure system are the preferred stock system and the differentiated voting system.However,in China’s Company Law,the preferred stock system has not been clearly defined,and there is a lack of clear legal provisions on the scope of application and mode of exercise of voting rights in preferred stock categories.What is the extent to which the class voting rights of preferred shares are restricted and in what form should such voting rights be exercised?This paper will draw on the experience of extraterriter-domain legislation,based on China’s actual national conditions,in the substantive norms and procedural norms of the two aspects of research and analysis of rationalization proposals,with a view to promoting the development of China’s preferred stock system.This paper can be divided into four parts to develop;.I think the first part should introduce the basic theory of voting rights,defines the relevant concepts of preferred stock and the concept and nature of voting rights in categories.In this paper,the preferred stock in exchange for partial benefit rights in exchange for the priority of self-interest,which enjoys limited voting rights,the exercise of its voting rights have three levels,rather than voting rights do not exist.The second part discusses the legitimacy preferred shareholders enjoy voting rights,from the legal basis and value of two aspects.The principle of shareholder equality,the theory of company contract and the principle of autonomy are the legal basis of its existence.It is the value of its existence to safeguard shareholders’ rights and interests,adjust the structure of the company and satisfy the preferences of both parties.The third part mainly analyzes the content and shortcomings of the voting system of preferred stock categories from the theoretical level.China has not yet clearly established the preferred stock system,whether it is the criteria for the classification of preferred stock class voting,the scope of application or the exercise procedure there are many shortcomings.The fourth part,through comparison with the extraterriter experience analysis,puts forward the entity proposal of the voting system of preferred stock category.This paper holds that the voting scope of preferred shares should be divided according to the criterion of protecting the self-interest of preferred shareholders,which is in line with the reasonable expectations of both investors and financing parties,and it will not reduce voting scope is too broad.Perfecting the legislative model combining the mandatory norm and the arbitrary norm,the matters concerning the right of self-interest as compulsory voting matters,shareholders as owners of the company,and the matters concerning the right of common benefit are decided by the articles of association of the company as arbitrary norms,leaving room for the autonomy of the company.From the point of view of favoring preferred shareholders to make the right decision,this paper thinks that it should be convened separately from the general meeting of shareholders of common stock.With regard to the setting of the attendance and voting requirements for the meeting,it is recommended that different entry-effect requirements be provided for by setting the legal number of attendances and distinguishing between voting matters.Finally,combined with the practical needs of our country,it is proposed to establish an independent director system to ensure that the preferred shareholders can truly exercise their voting rights.