Improvement Of The Rules For Adjudication Of The Lawsuit Of Compulsory Dividend Distribution Of Limited Companies

The mandatory dividend distribution system is one of the typical manifestations of judicial intervention in corporate autonomy.The provisions of Article 15 of the Company Law Interpretation(IV)mark the initial establishment of the mandatory dividend distribution rule.However,through the case collation of the application of the mandatory dividend distribution rule,it is easy to find that the mandatory dividend distribution rule still faces certain practical obstacles: first,the criteria for determining the conditions of application of the mandatory dividend distribution rule are unclear,i.e.,it is not known how to determine whether there is an "abuse of shareholders’ rights",and there are limitations in judicial practice.In addition,there is a tendency to limit the meaning of "abuse of shareholders’ rights" in judicial practice,which will lead to difficulties in the application of the mandatory dividend distribution rule and cannot achieve the purpose of protecting the rights and interests of small and medium shareholders.Second,the way of mandatory dividend distribution is unclear.On the one hand,in terms of the basic distribution method,in practice,there are two basic ways of adjudication,namely,directly deciding the company to pay a certain amount of dividends and deciding the company to make a resolution on the dividend distribution within a certain period of time.On the other hand,the calculation of the amount of dividend distribution has become a problem,which is a great test of the judge’s wisdom.The judge will clarify the criteria for determining the abuse of shareholders’ rights by drawing on the theory of shareholder suppression in foreign law.The principle of reasonable expectation of minority shareholders and the theory of fiduciary duty of controlling shareholders are the criteria for judging the existence of shareholder suppression,and the abuse of shareholders’ rights may be manifested by the violation of fiduciary duty of controlling shareholders,resulting in the failure of a reasonable expectation of minority shareholders.A judgment standard based on reasonable expectation and supplemented by fiduciary duty can provide more comprehensive protection for the rights and interests of small and medium-sized shareholders,and also prevent overly broad scope of the determination of abuse of shareholders’ rights.Considering that the design of the basic way of compulsory dividend distribution should play the role of guiding the parties to fully negotiate and protect the shareholders’ abstract dividend distribution request rights on the basis of maintaining judicial modesty,the court may attach the limit of dividend distribution amount while deciding the company to make a resolution on the dividend distribution matter within the deadline.In calculating the amount of dividend distribution,the court should set aside certain funds for the continued development of the enterprise rather than distributing all after-tax profits.The upper limit of dividend distribution amount can be calculated by referring to the target capital structure method,net present value method and other financial data of the company;the lower limit of dividend distribution amount can be calculated by using the bond income plus risk-return method and referring to the longterm bank loan interest rate and the percentage of dividends paid by the listed company.