Research On Fiduciary Duty Of Controlling Shareholders Of Limited Liability Company

How to reduce the agency cost between shareholders has been the focus of corporate governance for a long time,especially in limited liability companies.The alienation of majority rule,the abuse of the independent personality of corporation,and the limited liability of shareholders and other commercial phenomena lead to the damage of the rights of vulnerable shareholders from time to time.It is an important way for vulnerable shareholders to realize the right relief to regulate the controlling shareholders through the commitment of fiduciary duty.Although Company Law of China does not clearly stipulate the specific connotation of shareholders’ fiduciary duty,it has the tendency of institutionalization of shareholders’ fiduciary duty in some articles of law,which makes further research possible.In the process of studying the fiduciary duty of controlling shareholders of limited liability companies,this paper is focused on disputes between the two parties from the judicial precedent.Pointing at the difficulties existing in the judicial precedent,this paper analyzes that the root of the great difficulty of safeguarding the rights of vulnerable shareholders is caused by insufficient institutional supply of fiduciary duty of controlling shareholders in legislation.On this basis,as the logical starting point of the analysis,this paper specifies the connotation and extension of the controlling shareholder,and distinguishes the controlling shareholder and its similar concepts.In order to set the fiduciary duty of controlling shareholders,this paper looks for the theoretical basis of principle of the consistent between rights and responsibilities and the theories of justice which are universal legal philosophy theories of the principle;and principal-agent theory and the good-faith doctrine which are specific theories of two micro department laws.Based on the contents mentioned,this paper holds that it should be clear in the Company Law of the People’s Republic of China that the controlling shareholders of limited liability companies need to bear fiduciary duty,and adopt unified and decentralized legislative technology,so as to effectively regulate the exercise of rights of controlling shareholders.It can safeguard the interests of the company and vulnerable shareholders.At the same time,based on the types of business practice,the fiduciary duty of the controlling shareholders of a limited liability company can be divided into four types: the fiduciary duty of capital contribution as the initiator,the fiduciary duty of prohibiting abuse of rights while in management,the fiduciary duty when dealing with the company and the fiduciary duty when serving as an executive.Finally,this paper proposes that the relevant legal norms of the fiduciary duty of controlling shareholders should be improved,and the applicable boundaries of the fiduciary duty of controlling shareholders should be clarified based on the principles of business-judgment-rule and substantive fairness.At the same time,the voting mechanism in the performance of the fiduciary duty of controlling shareholders should be further amended to reduce the agency cost between controlling shareholders and vulnerable shareholders.