Shareholder Interest Protection In Authorized Capital Issuance

With the publication of the revised draft of Company law,it is possible to officially introduce authorized capital system.Authorized capital system,as one of the major changes of the company’s capital system,means that the decision-making power of issuing new shares is enjoyed by the board of directors in accordance with the company’s articles of association or the resolution of the board of shareholders.The board of directors can decide to issue the part of the total number of shares of the company that is not the number of shares that should be issued at the time of establishment,and is limited by the authorization period and the proportion of shares that can be issued.However,the introduction of the authorized capital system does not simply allow the board of directors to obtain the authorization to issue new shares in the company law,but once the company chooses to issue authorized capital,it should be followed by a set of systematic regulations,with mandatory provisions to regulate the behavior of directors,and make provisions on the effectiveness and responsibility of improper issuance.Therefore,it is necessary to deeply study and discuss the systematic design of the overall system of authorized capital issuance.In the corporate legal system,the opposition between shareholders and creditors is at the core of the conflict of interests.Therefore,in the design of the capital system,the tilted protection object after interest measurement is the logical starting point of all,and also the value of different system functions.In the authorized capital system,the interests of shareholders are more likely to be damaged than in the past.In order to solve the agency problem between shareholders and directors,it is necessary to provide all-round protection for shareholders under the authorized issuance system from the aspects of limiting the authorized content in advance,improving the fiduciary obligations of directors,and expanding the remedy ways of shareholders for improper issuance.The authorization to restrict the issuance of capital should first start from the two aspects of the period and the amount of capital,and distinguish the types of resolutions that can be authorized to establish different voting rules.Finally,we can focus on the exception of the application of the authorization exclusion,and clarify the specific situation of the power returned to the shareholders’ meeting.The core of regulating authorized capital issuance is directors.How to regulate the behavior of directors is the core of system design and the foothold to protect the interests of shareholders.Specifically speaking,the directors should not only treat the new and old shareholders fairly in the case of favorable issuance of new shares,but also take facilitating the company’s financing as the main purpose of issuance at all times,and should not intervene in the fight for control among shareholders.Finally,in the face of improper issuance,it is necessary to broaden the relief channels of shareholders.Not only should we rethink the system design of preemption right under the authorized capital system,but also timely introduce the litigation of shareholders’ request for stopping the issuance of new shares,so as to consolidate the directors’ responsibility for improper issuance.