Research On Class Voting Matters Of Preferred Stockholders

Preferred shares are flexible,and through free agreement under the legal framework,the content of rights to shares presents diversity.The class voting rights of preference shareholders have independent status,which is different from the voting rights enjoyed by ordinary shareholders and the voting rights restored by preference shareholders.For the specific resolutions of the company,preferred shareholders have the right to vote separately at the preferred shareholders meeting,so as to maintain the substantial equality among shareholders;they can veto in advance motions that damage their rights to prevent ordinary shareholders from using capital majority vote to damage their interests.However,it cannot be ignored that the addition of the procedures for class voting outside the ordinary shareholders meeting will affect the company’s freedom of behavior and efficiency.In the face of such conflicts,the key is to reasonably determine the class voting matters,so as to achieve a balance of interests of both parties.The development of the preferred stock system in my country is slow,and the pilot program was not started until 2013.In addition to other matters stipulated in the authorization charter,four categories of voting matters are clearly listed.In the pilot practice,all are non-public offerings,the articles of association are homogeneous in terms of content,and there is no substantial increase in category voting matters.From the overall point of view of the existing regulations on voting matters of preference shares in my country,firstly,the clearly listed matters are mandatory regulations,and the articles of association cannot be excluded from application,but it is doubtful whether there is a need for mandatory voting;secondly,the four clearly listed items are: Incomplete enumeration,there are problems of lack of thoroughness.If the protection of economic rights that the preference shareholders value is not enough,in practice,the issuer stipulates that the cancellation of dividend payment only needs to be notified in advance.The third is the lack of preconditions for category voting.Are there prerequisites for voting in the preferred stock class,and is it necessary to have rights impaired or possibly impaired to vote? The current rules are not clear.In general,the scope of mandatory category voting is too broad,and the state is forced to intervene in private law autonomy to a relatively high degree.The reason may be related to my country’s consistent investor protection concept.Extraterritorial legislation includes generalization,enumeration,and generalization plus enumeration,and specifies the scope of voting matters.Whether it is legislation or judicial precedent,it seeks a balance between realizing the freedom of corporate behavior and protecting the rights of shareholders of different categories.The perfection provides some thought and inspiration.By observing the legislative and judicial experience of the voting matters of preference shares outside the territory,combined with my country’s national conditions and practice,when determining the voting matters of preference shares,it is necessary to carefully evaluate the balance between the protection of preference shareholders and the freedom of corporate behavior.First of all,it needs to be clear that what needs to be specially protected by the class voting mechanism is the class rights of preferred shares,that is,special rights excepting the same rights as ordinary shareholders-economic rights priority and limited voting rights.Secondly,category voting needs to set voting prerequisites.The damage or danger of damage to the rights of the preferred shares usually changes the rights of the preferred shares.The class shareholders’ meeting is not the company’s will-forming organ,and there is no need for relief without damage.It is suggested that my country should adopt "damage or damage may" as the premise for voting,and damage-relief is more in line with our country’s cognition.The interpretation of the change of rights depends on the judge’s discretion,and there are long-term disputes outside the territory.Under the tradition of our country’s statutory law,it is difficult to apply.Finally,when determining the voting items of the preferred stock class,we should weaken the compulsion and avoid the compulsory items being too broad;expand the autonomy of the articles of association.Specifically,the premise of voting is that there will be damage or damage to the rights of the preferred stock class;the statutory mandatory matters and the articles of association are arbitrarily stipulated,and the articles of association amendments are regarded as mandatory category voting matters,and the articles of association are not allowed to be excluded from application.For matters that impair constitutional class rights,it is mandatory to conduct class voting,including direct amendment of the articles of association to make adverse changes to class rights,and matters that substantially impair constitutional rights.For other major matters closely related to the company’s operations,it can be regarded as an arbitrary provision,and an "elected out" clause can be set up to clearly list,and unless it is excluded by the articles of association,it will be applied by default.