Study On The Sunset Clause In The Dual-class Stock Structure

The sunset clause originated in ancient Greek and Roman law,which was intended to establish a spontaneous evaluation mechanism within the law to consider the rationality of some legal existence with more serious restrictions on rights.In the context of dual-class stock structure,Sunset clause stipulates the conditions for the conversion of dual-class stock structure to one share and one right.Trigger of sunset clauses means all or partial termination of dual-class stock,so it becomes an effective means to regulate the abuse of rights of special voting rights and protect minority shareholders.The effectiveness of the design and application of the sunset clause plays a vital role in maximizing the governance advantages of the dual-class stock structure and overcoming its inherent defects.Taking the sunset clause in the listing rules of China’s stock exchange and companies as an example,there are problems such as the mismatch between the design and the normative purpose of the existing sunset clauses,the single type and application method of the sunset clause,and the serious homogenization of the content of the sunset clause.To address the above problems,The improvement of the future sunset clause can be considered from the following aspects: First,add the time-based sunset clause,This clause provides a 5 to 7 years of period for enterprises to choose,In response to the real needs of different enterprises;next,Explain the applicable conditions of event-based sunset clauses,To enhance the flexibility and operability of the sunset clause application,So as to achieve the overall function of the sunset clause to play the coordination;last,Starting from the connection of the fiduciary obligations of special voting shareholders and the sunset clause,Provide a strong guarantee for the performance of the sunset clause.