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The internal compensation Relief of a limited liability company shareholders the right to abuse the

Author: ZhangYing From: www.yourpaper.net Posted: 2009-10-05 10:48:23 Read:
[Abstract] Article 20, paragraph 2, of the Companies Act, the shareholders the right to abuse the internal compensation relief for the first time made a more principled provisions, and it causes more confusion and controversy. From the start together with the more typical case, the conservative attitude of the current judicial practice internal compensation relief on shareholder rights abuse, and demonstrate the value and practical significance of this relief regulating its operation. About the specific application of the remedies, the paper argues, identified with the balance of corporate autonomy should connotation abuse of shareholders 'rights, abuse of shareholders' rights, abuse of the relationship of the shareholders the right to compensation for relief and other relief ways to make a comprehensive measure of judgment.
[Words] shareholders rights; compensation; limited liability company

First, the issues raised

Defendants Pacific Company was set up in July 1995, the registered capital of 21 million yuan; plaintiff Dongmou invested 3.15 million yuan holds a 15% stake in the defendants caused the company holds the remaining 85% stake. December 31, 2005, Pacific unallocated bonus. Assessed, the end of 2005, Pacific is expected to gross profit of 133 million yuan, net profit of 7,583 million yuan, total assets of 326 million yuan, a total of 208 million yuan in debt, owners' equity of 118 million yuan and net assets The assessed value of 150 million yuan. In November 2005, the shareholders of Pacific resolutions: ZhiDa company replenishment of 19 million yuan to the Pacific; introduction of a third person at the same time founded the investment company capital increase of 10 million yuan to the Pacific. The plaintiff Dongmou think that the above-mentioned resolution is a malicious replenishment of the opposition. In March 2006, Pacific completed the capital increase approved and registered by the industrial and commercial sector to confirm: Pacific company with registered capital of 50 million yuan, of which caused the company invested 36.85 million yuan, accounting for 73.7% of the equity; the third person founded the company invested 10 million yuan, accounted for 20% of the equity; The plaintiff Dongmou invested 315 million yuan, accounting for a 6.3% stake. Pacific companies to increase their investment before and after were not carried out the audit of the company's property assessment. The after, Dongmou that a malicious replenishment Pacific petitioned require large shareholders ZhiDa to compensate for the direct economic losses.
The court held that the Pacific, the company decided to invest the company's business is in good condition, profitable business, net assets of the company reached 150 million yuan scale. The plight of the company has not been able to explain replenishment decisions Pacific. Objective, the Pacific, the company's capital increase is not in accordance with the Company's net assets amount has not carried out the necessary audit, evaluation, but in accordance with was much lower than the amount of net assets of the Company registered capital replenishment, significantly reducing the minority shareholders shareholder The held Dongmou equity value, make the equity value Dongmou huge losses, and unfair to infringe the rights of Dongmou, caused the company is to master the Pacific corporate control by virtue of its control of the majority of voting rights, The capital increase will of the pro forma company will play a decisive role in the adoption of the resolution. Caused by the company in violation of the the largest shareholder fiduciary duties to minority shareholders belonging to the abuse of the rights of shareholders. Diminution in value of shares held before and after Dongmou capital decree ZhiDa companies compensation for Dongmou loss of 916 million yuan.
The decision in that case led to more controversy. The objections mainly that replenishment behavior of a limited liability company, according to China's newly revised Company Law, in addition to the restrictions must pass a vote of the shareholders' meeting, and by shareholders on behalf of more than 2/3 of the voting rights through "the law does not make other provisions Therefore, in that case, the court intervene in the company's internal business affairs too much. For the company as capital before capital contributions has reached 85% of the large shareholders have the right in accordance with the basic principles of the companies' capital, the majority of the vote, the company's capital increase resolution. Behavior of the largest shareholder is a legitimate exercise of shareholders' rights, and in accordance with paragraphs 1 and 2 of Article 20 of the new Companies Act, the abuse of the equity should refer only to the violation of the laws, administrative regulations and the Articles of Association, the largest shareholder does not constitute an abuse of the equity, the judgment in the case of the so that shareholders can not exercise their rights. Even so, even if the resolution of the shareholders of the Company improperly, small shareholders by other corporate relief to protect themselves, rather than appeal. Thus, the case so that we have to ponder: Article 20, paragraph 2, of the new company law equity abuse refers to what? Shareholders of abuse of power by internal compensation relief applicable space? Determine how to take into account the restrictions control of shareholders' equity and the company. " majority voting balance?

Second, the shareholders of the right to abuse the internal compensation Relief definition

The responsibilities of the external relations of its establishment, the company started, given the legal regulation of internal relations as well as companies and other social subjects. Therefore, the regulation controlling shareholder rights abuse, abuse of rights because controlling shareholders boils down may damage the three types of the main interests of the company, other shareholders of the company, the creditors of the company, of these three main compensation claim relief under the law. China's newly amended Section 20 of the Companies Act, the provisions of paragraph 2, the abuse of the rights of the shareholders' losses to the company or other shareholders, shall be liable for compensation. With respect to Article 20, paragraph 3, the shareholders responsible for the company's creditors, and this requirement is based on the liability considerations in the allocation disputes between the company and shareholders, between shareholders and the shareholders of the internal body. In order to clarify the object of this paper, the author defined the liability of the provisions of Article 20, paragraph 2, of internal compensation relief "abuse of shareholders' rights.

Shareholder rights abuse of the value of the internal compensation relief: to make up for the inadequate legislation

(A) a limited liability company system deficiencies. Practice has proved that the shareholders of a limited liability company disputes a lot more than the stock company, and the causes of these disputes multi Co., Ltd. System congenitally deficient.
1 owner and operators of unity. AG concentrated shareholding structure of the limited liability company, the relationship between shareholders and the company is very close, the performance of most shareholders are directly involved in the operation and management of the company, and prone to the controlling shareholders, triggering the shareholder rights abuse drawbacks in the actual operation of the company In the process, some controlling shareholders served as the chairman and other important duties, to participate and to master the operation and management of the company's control over, and also have the ability to squeeze out, and persecution of non-controlling shareholders. Therefore, a limited liability company in abuse of control to the detriment of minority shareholders, controlling shareholders can easily occur. "In fact, the minority shareholders of the Anglo-American national court accepted v. controlling shareholder abuse of power to harm its legitimate rights and interests of the jurisprudence of almost all occurred in a closed company." In our country, this phenomenon is no exception. Law-related cases before the Court, occurs mostly in Co., Ltd., the cause of the dispute is a company operated by the other control.
The limited nature of the limited liability company relations contract. According to the University of Chicago Law School Professor Coase's point of view, the reason for existence of the business is to reduce the transaction costs, certain marketing costs savings. "By creating enterprises and allowing some authority - the disposable resources inside trading to a long-term contract instead of a series of short-term contract, to reduce the quantity in the contract, to simplify contract adjustment process to reduce the transaction costs." This company contract theory as an understanding of the company's set of methods. According to the contract theory, the existence of a long-term relationship between the contract. LIMITED It is precisely because of the long-term nature of the contract, shareholders can not be set up in the company initially changing in the future of the company and the interests of the company's internal conflict is expected and agreed in advance by the Articles of Association to make, that this long-term contract "Shareholders systemic error the root causes. " It is also not comprehensiveness of this long-term contract, makes the maintenance of the company's internal fair value can not completely rely shareholders afterwards corrected constant negotiation of long-term contracts, because it requires a controlling shareholder to give up vested interests. Thus, the jurisdictions involved in internal coordination conflicts of interest will be the basis of legitimacy. ,
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