A Study On The Sunset Clause Under Dual-class Structures Of Star Market

In 2019,Shanghai Stock Exchange issued and implemented the "Science and Technology Innovation Board Stock listing rules of Shanghai Stock Exchange"(hereinafter referred to as "Science and Technology Innovation Board listing rules"),which formally allowed the issuance of stocks with different voting rights.In order to give full play to the advantages of dual ownership structure to the development of the company,Science and Technology Innovation Board listing rules stipulate many types of "sunset clause",as the exit mechanism of dual ownership structure,it mainly includes the inability of directors to perform their duties,the change of corporate control and the founder’s total shareholding ratio of less than 10%,but there are still some problems in the sunset clause in our country,which need to be further improved.First,there are limitations in only stipulating the "event sunset clause".Whether the event occurs or not is mostly decided by the shareholders with differentiated voting rights,which reduces the possibility that the "sunset clause" will be triggered,so it is proposed to formulate a "non-mandatory time sunset clause",that is,after the arrival of a fixed period,it is up to the shareholders’ meeting to decide whether to continue to adopt the dual ownership structure according to the actual situation.Second,at present,Science and Technology Innovation Board’s "transfer sunset clause" is so strict that it forbids transfer to any other object.This paper argues that it should be refined,such as when the founder transfers the differentiated voting shares to other founders and children,the shares still enjoy the differentiated voting rights is more conducive to the realization of the purpose of dual ownership structure.Therefore,the Science and Technology Innovation Board listing rules can formulate detailed rules on the scope of exemption of the transferred object and provide a more detailed hurdle for the company’s "sunset clause",but it is up to the company to decide whether to apply the exemption and the scope of exemption.Third,there should be a limited explanation for the delegated exercise of differentiated voting rights.on the one hand,it should be authorized to be exercised by other founders,on the other hand,in the case of permanent plenipotentiary,the special voting shares owned by the principal should be transformed into one share and one right,and only the differentiated voting rights during the period of entrustment should be deprived of for non-permanent plenipotentiary.Fourth,the "change of control" clause is not feasible and should be deleted.The main reasons are: on the one hand,the Science and Technology Innovation Board listing rules have stipulated the "dilution sunset clause",which is consistent with the function of the "change of control" clause;on the other hand,the standard of "change of control" has not been defined.In order to increase the effectiveness of the dilution sunset clause,this paper proposes to increase the shareholding ratio stipulated in the dilution sunset clause,which can dynamically alleviate the problem of double-tier ownership structure caused by the decrease of shareholding ratio.Finally,it is not enough to agree on the sunset clause,it is necessary to have complete supporting measures to realize the sunset clause to give full play to its function.Therefore,this paper proposes to build a "sunset" review mechanism with the Shanghai Stock Exchange as the main body to protect the "sunset clause".