How Do Shareholders Regulate Each Other?

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After the establishment of the company system in China, a large number of private enterprises were set up according to the company system. Many of them were troubled by the disharmonious relationship between shareholders.

As far as the protection of minority shareholders' rights and interests is concerned, the listed companies are relatively standardized and require higher information disclosure.

The new company law has made many beneficial arrangements in strengthening the protection of shareholders' rights and interests, and I believe it will play a small role in promoting the protection of minority shareholders' rights and interests.

Of course, many provisions of the new company law are relatively principle and rough, and they need to be perfected in practice.

At the recent stage, we expect the Supreme People's court to introduce judicial interpretations of the new company law as soon as possible, so as to establish an operational criterion for companies to improve their statutes, exercise their rights for shareholders and exercise their rights.

The fourth provision of the new company law stipulates that shareholders of a company enjoy the right to gain assets, participate in major decisions and choose managers.

It can be said that the rights and interests of shareholders are all around the above rights.

The company law, while specifically stipulating the rights enjoyed by shareholders, allows the company to make further refinement of the enjoyment and protection of shareholders' rights in the articles of association. Therefore, we must attach importance to the formulation of the articles of association, not just the general model text.

In fact, the company law will also enact the articles of association in accordance with the law as a mandatory norm for the establishment of the company, and stipulates that the articles of association shall be binding on the company, shareholders, directors, supervisors and senior managers.

Specifically, shareholders of the company enjoy the following rights:

Shareholder's right of status

The company law stipulates that after the establishment of a limited liability company, a capital contribution certificate should be issued to shareholders, and a register of shareholders should be provided to record the names and domiciles of shareholders, the amount of capital contributions of shareholders and the number of investment certificates.

The company shall register the name or name of the shareholder and the amount of its contribution to the company registration authority.

Shareholders who record in the register of shareholders may exercise the shareholder's rights in accordance with the roster of shareholders.

However, no business registration or alteration registration shall be conducted against third persons.

Therefore, shareholders should attach importance to the registration of shareholders' register and business registration. These are direct evidences for advocating shareholders' rights.

Participation in major decision-making power

The company law stipulates that the shareholders' meeting of a limited liability company shall be composed of all shareholders. The shareholders' meeting is the power organ of the company. It has the right to decide the company's management policy and investment plan, to consider and approve the company's annual financial budget plan, final account plan, profit distribution plan and make up the loss plan, to make resolutions on the company's increase or decrease in registered capital, to make resolutions on the issuance of corporate bonds, and to make resolutions on matters such as merger, division, alteration of company form, dissolution and liquidation, etc., and amend the articles of association.

The articles of association may also provide other functions and powers of shareholders' meetings, such as making decisions on the company's investment in other enterprises or providing guarantees for others, especially for the company's shareholders or the actual controller.

Selection and supervision of managerial authority

The modern enterprise system implements the proper separation of ownership and management right. Based on this, the company law establishes the corporate governance structure, that is, the shareholders' meeting is the power organ of the company, deciding the important matter of the company, and granting the right of management to the board of directors and the manager appointed by the board of directors.

At the same time, shareholders will have the right to elect and replace directors and supervisors who are not represented by staff representatives, decide on remuneration matters for directors and supervisors, and examine and approve reports of the board of directors and board of supervisors or supervisors.

The board of directors shall be responsible for the shareholders' meeting, and the manager shall be accountable to the board of directors.

The board of supervisors supervises the conduct of directors and senior managers in carrying out the duties of the company and performs other supervisory functions.

When the directors, supervisors and senior managers of the company encroach on the interests of the company, the shareholders of the company also have the right of subrogation.

Assets income right

The most direct embodiment of the right of assets income is that shareholders can get dividends according to the proportion of paid capital or the other way stipulated in the articles of association. In connection with this, when the company increases its capital, unless the articles of association of the company stipulate otherwise, the shareholders have the right to pay the capital priority in accordance with the proportion of paid capital contribution.

In addition, after the liquidation and liquidation of a company, the company's assets shall be paid separately, including liquidation expenses, staff's wages, social insurance premiums and statutory compensations, paying the taxes owed and paying the remaining assets after liquidation of the company's debts, and the shareholders shall have the right to allocate them according to the proportion of the capital contribution or according to the regulations of the company's articles of association.

On the issue of dividends, there are often large differences between shareholders of many companies. In this regard, the company law stipulates that if the company fails to distribute profits to shareholders for five consecutive years, and the company will continue to make profits for five years and comply with the conditions of distribution profits stipulated by the company law, shareholders who vote against the resolution will be able to request the company to purchase its shares at a reasonable price.

Within sixty days from the date of the resolution of the shareholders' meeting, the shareholders and the company can not reach an agreement on the acquisition of shares. The shareholder may bring a suit in the people's court within ninety days from the date of the resolution of the shareholders' meeting.

right to know

Although shareholders have granted the management rights of the company to the board of directors and managers, shareholders still enjoy the right to understand the basic operating conditions of the company.

Of course, the exercise of this right by shareholders shall not affect the normal operation of the company.

The company law makes the following design: shareholders have the right to consult and copy the articles of association, minutes of shareholders' meetings, resolutions of the board of directors, resolutions of the board of supervisors and financial reports.

Shareholders may request access to the company's accounting books.

If a shareholder requests to consult the company's accounting books, he shall make a written request to the company to explain the purpose.

If a company has reasonable grounds for assuming that shareholders have an improper purpose in accessing the accounting books and may damage the legitimate interests of the company, it may refuse to provide the reference, and shall, within fifteen days from the date of the shareholder's written request, give a written reply to the shareholders and explain the reasons.

If a company refuses to provide a reference, the shareholder may request the people's court to request the company to provide a reference.

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Review right of related party pactions

The shareholders have the right to make a decision on the guarantee provided by the company to shareholders or actual controllers through the shareholders' meeting. When the resolution is made, the shareholders concerned or the shareholders controlled by the actual controller shall not vote in the matter.

The vote shall be passed by more than half of the voting rights of other shareholders attending the meeting.

The company law also stipulates that the controlling shareholders, actual controllers, directors, supervisors and senior managers of the company shall not use their relationship to damage the interests of the company.

Anyone who violates the provisions and causes losses to the company shall be liable for compensation.

It is proposed to convene the right to preside over the provisional meeting of the shareholders' meeting.

The shareholders' meeting shall hold periodic meetings in accordance with the provisions of the articles of association so as to protect the rights of shareholders to participate in major decisions.

However, the regular shareholders' meetings sometimes can not meet the needs of shareholders to participate in major decisions. Therefore, the company law stipulates that shareholders representing more than 1/10 of the voting rights (and more than 1/3 directors, board of supervisors or supervisors without supervisors) have the right to propose to convene an interim meeting of the shareholders' meeting, and the board of directors shall convene an interim meeting on the basis of the proposal.

If the board or executive director fails to perform or fails to perform the duties of convening the meeting of the shareholders' committee, it shall be convened and presided over by the board of supervisors or the board of supervisors without the board of supervisors. If the board of supervisors or supervisors do not convene and preside over it, the shareholders representing more than 1/10 of the voting rights may convene and preside on their own.

Right of revocation

Because shareholders will implement capital majority rule, small shareholders are often unable to vote against shareholders.

Moreover, in practice, large shareholders often use their dominant position to decide arbitrary matters of the company.

In this regard, the company law gives small shareholders a request for cancellation of the procedures or resolutions of the shareholders' meeting and the board of directors that are illegal. The meeting convening procedure and voting method of the shareholders' meeting or shareholders' meeting and the board of directors violates the laws, administrative regulations or articles of Association, or if the contents of the resolution are contrary to the articles of association, the shareholders may request the people's court to rescind within sixty days from the date when the resolution is made.

Right of exit

The company law stipulates that after the establishment of a company, shareholders shall not escape capital contributions.

This is the so-called capital maintenance principle.

However, this will also affect shareholders' withdrawal from the company or dissolution of the company under certain circumstances.

The company law stipulates that a shareholder who votes against the resolution of the shareholders' meeting may request the company to purchase its shares at a reasonable price under any of the following circumstances:

(1) the company has not allocated profits to shareholders for five consecutive years, and the company has been making profits for five consecutive years and is in conformity with the conditions of distribution profit stipulated in this law.

(2) merger, separation and pfer of major assets;

(3) when the business period stipulated in the articles of association or the other causes of dissolution stipulated in the articles of association appear, the shareholders' meeting shall adopt a resolution to amend the articles of association to make the company survive.

Within sixty days from the date of the resolution of the shareholders' meeting, the shareholders and the company can not reach an agreement on the acquisition of shares. The shareholder may bring a suit in the people's court within ninety days from the date of the resolution of the shareholders' meeting.

In addition, there are serious difficulties in the operation and management of the company. If it continues to continue, the interests of the shareholders will be greatly lost and the shareholders who hold more than ten percent of the voting rights of the company can be requested to dissolve the company if they fail to solve the problem through other channels.

Litigious right and subrogation litigious right

If a director or senior manager violates the provisions of laws, administrative regulations or articles of association and damages the interests of shareholders, a shareholder may bring a suit in a people's court.

When a company's rights and interests are infringed, the company can sue.

In some specific cases, the company will not or may not initiate a lawsuit, for example, when a company director, supervisor or senior manager infringes upon the company's rights and interests, because they directly control the company, it is impossible to sue the company on behalf of the company.

The company's rights and interests are infringed upon, which ultimately damages the shareholders' rights and interests. Therefore, the law gives shareholders the right to initiate proceedings in the people's court in their own name under certain circumstances.

The company law stipulates that when a company director or senior manager infringes upon the company's rights and interests, the shareholder may make a written request to the board of supervisors or a supervisor of a limited liability company without the board of supervisors to bring a suit to the people's court. When the supervisor infringes upon the company's rights and interests, the shareholder may request the executive director of the board of directors or the limited liability company of the board of directors to bring a lawsuit to the people's court.

If the board of supervisors, supervisors or board of directors or executive director has refused to initiate a lawsuit after receiving a written request from the shareholders, or has not filed a lawsuit within thirty days from the date of receipt of the request, or if the case is urgent or not immediately filed, the company's interests will be irreparable damage. The shareholders shall have the right to file a lawsuit directly in the people's court in the name of the company for the benefit of the company.

When others infringe upon the legitimate rights and interests of the company and cause losses to the company, the shareholders may also bring a suit in the people's court in accordance with the above provisions.