Research On The Institutional Arrangement Of Differentiated Internal Governance Of Smaller Companies

The current company law of our country does not distinguish the scale of enterprises.The one-bar legislative and judicial management,regardless of the size,applies to all,and takes insufficient consideration of the particularity of differentiation and diversification in the governance of small companies.Only Article 50 of the current Company Law is available Article 51.Although the revised draft of the Company Law promulgated on December24,2021 further revises the relevant provisions on the governance of smaller companies,which is conducive to the further development of smaller companies,it is compared with the current demand of smaller companies in China For the needs of economic construction,the author believes that the revision of the relevant provisions on the governance of small scale companies is not enough.The construction of the governance system of small scale companies should be more detailed and comprehensive,and smaller companies should be endowed with greater autonomy and autonomy space,so as to give full play to the economic vitality of Chinese small scale companies.Foreign research on the governance of smaller companies began earlier,and the research results are more abundant.On the whole,their research results on the governance of smaller companies are more mature and have important implications for the reform of the governance system of smaller companies in China.For example,Japan adopted the Company Code in 2005,on the basis of its commercial code and limited company law,formed a joint-stock company as a public company to adapt to the needs of larger public enterprises,the limited company as a non-public company to adapt to the needs of smaller closed enterprises legislative model.Reviewing the process of several company law reforms in the UK,it also adheres to the idea of taking larger companies as the starting point and smaller companies as the exception to apply to the system design and construction,so as to achieve the special characteristics of the governance of smaller companies and the differentiation of the system.For the construction and development of the differentiated governance system of smaller companies,the exploration and practice of foreign countries started earlier,and the theoretical results and physical system construction are more mature.The author combines the actual development of smaller companies in China,the results of foreign exploration and reform,and the draft revised company law "results" to explore the differentiated governance system of smaller companies in line with China’s actual national conditions,divided into the following five parts:The first part of the classification and classification governance of branches.Classification governance is the theoretical cornerstone and prerequisite for the differentiated arrangement of the governance system of smaller companies.Firstly,we start from the traditional classification of companies and further analyze the legislative practice of classification governance at home and abroad,which leads to the main theme of this paper,the practical necessity of size as a classification standard,and also the legislative exploration of classification governance for companies of different sizes.The second part of the historical changes in the differentiation of governance systems of smaller companies.The reflections and summaries of the past system are important for the review of the existing system and the formulation of the future system.Firstly,the changes of the differentiation of the governance system of smaller companies in Japan and the UK are explained,followed by the analysis of the several amendments of the company law in China over the years and the recent amendment of the 2021 edition,and it is concluded that the differentiation of the governance system of smaller companies in China has the practical need for institutional unification and the practical development of the practical need.The third part is the choice of governance model and the setting of organizational structure of smaller companies.Corporate governance model determines the organizational structure,so first of all,from the small company governance model of the path to choose to explain,the shareholders’ meeting and the board of directors have their own advantages and disadvantages,in practice,the smaller companies themselves are not the same,should be given the right to choose to the smaller companies,allowing them to decide according to their own assets,personnel composition and cultural philosophy to take what governance model.Secondly,in the organizational structure of smaller companies,the specification of shareholders’ meeting and managers’ body should be mandatory,while the setting of board of directors and supervisory board should not be mandatory,and the setting specification should be arbitrary;for smaller companies,the specification of authority,mandatory or arbitrary,should be determined separately for different matters;for smaller companies,it is appropriate to set it as arbitrary specification.The fourth part of the smaller companies of the special nature of the procedural norms.The rules of procedure of shareholders’ meetings are important elements of the governance procedures of smaller companies.In the rules of procedure from the inclusiveness and feasibility of shareholders’ agreements in smaller companies,the introduction and application of the shareholder arbitration system and simple internal decision-making three aspects to elaborate the analysis.In our practice,shareholder agreements exist in large numbers in smaller companies,and most of them are also established on the basis of friendship and kinship ties.The establishment and post-establishment governance of smaller companies are also maintained through shareholders’ agreements.In the smaller companies voting rules,the smaller companies with limited liability are allowed to freely choose the specific classification voting mode through the articles or agreement,which can be "two votes,two counts,two resolutions" or "one meeting,one vote,two counts,two resolutions " This will meet the individual needs of smaller companies.The fifth part of the special nature of the smaller governance responsibility norms.In the context of the expansion of the autonomy of smaller companies,further clarification of their responsibility norms is an important element of the governance of smaller companies.Mainly from the subject right responsibility checks and balances and responsibility system checks and balances to develop two aspects.In smaller companies,the exercise and abuse of management rights are the core issues of smaller companies’ governance.Affirming the controlling shareholders’ participation in the management rights of smaller companies’ governance changes the controlling shareholders’ de facto control over smaller companies’ governance into de jure control.