Viewpoint... Discussion on the protection system of the company's shareholders' right to know.
Published:
2021-11-12
Foreword The corporate governance structure regulated by China's Company Law implements the principle of capital majority decision, and the majority shareholder obtains control of the company through the more capital it invests, which in itself conforms to the principle of consistency of rights and obligations. Under this system, some shareholders, especially small and medium-sized shareholders, are in a weak position of information asymmetry because they do not directly participate in the operation and management of the company, so China's Company Law provides for the protection of shareholders' right to know. The following author tries to analyze the protection and improvement of shareholders' right to know. Text The right of shareholders to know refers to the right of shareholders to know and understand the important information of the company's business situation, and some scholars have defined the right to know as "the right of shareholders to obtain the company's information and understand the company's situation". The author believes that the shareholders' right to know should include the following aspects. Shareholders' right of inspection Article 33 of China's Company Law stipulates that shareholders shall have the right to consult and copy the articles of association, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the supervisory board and the financial and accounting reports. Shareholders may request access to the accounting books of the company. If a shareholder requests to consult the company's accounting books, he shall submit a written request to the company stating the purpose. If the company has reasonable grounds to believe that the shareholders' access to the accounting books has an improper purpose and may damage the legitimate interests of the company, it may refuse to provide access, and shall reply to the shareholders in writing within 15 days from the date of the written request of the shareholders and explain the reasons. If the company refuses to provide inspection, the shareholder may request the people's court to require the company to provide inspection. Article 97 Shareholders shall have the right to consult the articles of association, the register of shareholders, the stubs of corporate bonds, the minutes of the general meeting of shareholders, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports, and to make suggestions or inquiries about the operation of the company. The Company Law provides for the right of informed inspection of shareholders of limited liability companies and shareholders of limited liability companies, respectively. However, the author thinks that the company law is not very clear about the shareholders' right of access, and there are differences in the actual treatment. Shareholders' right to question and the board's duty to explain The right of shareholders to question is the right of shareholders to question and ask questions to the management of the company on issues related to matters considered at the general meeting of shareholders in accordance with legal procedures, and the management of the company is obliged to explain and answer questions to shareholders' questions. The setting of the right of inquiry can reduce the information asymmetry between the small and medium-sized shareholders of the company and the management of the company, so that the shareholders can make up for the lack of information by asking questions, and to a certain extent form the supervision and checks and balances of the management of the company. The scope of the content of the right to question is not stipulated in our company law. In this regard, national legislation generally provides in a general manner that shareholders can only exercise the right to question on specific matters and is limited to matters related to the subject of the general meeting of shareholders. The author believes that the scope of matters to be questioned by shareholders should be limited as the scope of the company's affairs is extremely wide, and if shareholders are allowed to question matters related to or unrelated to the issues of the general meeting of shareholders, it will easily lead to the abuse of shareholders' rights to the detriment of the company and the interests of shareholders. The Company Law does not specify whether the subject of the exercise of the right to question shareholders is limited to shareholders present at the general meeting or includes all shareholders of the company who are not present at the general meeting, whether it is limited to voting shareholders or includes non-voting shareholders. The author believes that shareholders who do not attend the general meeting of shareholders can still exercise the right of inquiry, but only through the agent to exercise this right, the agent should submit a power of attorney to the company when exercising the right of inquiry. As to whether non-voting shareholders can exercise the right of inquiry, since the exercise of the right of inquiry will not lead to the leakage of confidential information of the company, there should be no restriction on the qualification of shareholders to exercise their right of claim. As long as they have the status of shareholders of the company, regardless of the proportion of shares held or the length of time held, whether they are voting shareholders or non-voting shareholders, they can request the board of directors and the board of supervisors of the company to accept inquiries on relevant matters. Company inspector selection system The right to request the selection of inspectors refers to when shareholders have legitimate reasons to suspect that there are major facts in violation of laws, administrative regulations or articles of association in the process of operation and management of the company, or when the operators of the company seriously violate the obligations of loyalty and good management, and damage the interests of the company and shareholders, they have the right to investigate the operation and financial situation of the company through the shareholders' (general) meeting, administrative organs and judicial organs. Compared with the shareholders' right of access and inquiry, the system of selection of inspectors can make up for the lack of professional knowledge of shareholders, and bring targeted factual information to shareholders. Of course, in the process of performing his duties, the inspector shall perform the obligation of confidentiality for the important information of the company he knows. If the company's interests are damaged due to fault, the inspector shall bear the corresponding responsibility, but the consequences arising from the normal performance of his duties shall be exempted from liability. The perfection of the system of shareholders' right to know 1, first of all, the provisions of the shareholders' right to know to refine, for the exercise of shareholders' right to know to get a thorough protection. 2. The shareholders' right to know can be appropriately restricted to prevent individual shareholders from abusing their right to know and infringing on the rights and interests of the company. The author suggests that appropriate restrictions can be imposed on the number of years of shareholder ownership and the proportion of shareholder ownership. 3. Appropriate punitive consequences may be provided for acts that prevent shareholders from properly exercising their right to know. 4, the shareholder's right to know the pre-conditions of litigation. In order to prevent abuse of litigation and to play the role of supervisors and supervisory boards, the company law may provide for the preconditions for the right to know litigation. Before filing a lawsuit, a shareholder shall first submit a written request to the company for a reply from the company's management; if the company's management fails to reply after the expiration of a certain period of time, it shall request to the supervisor or the board of supervisors, and the supervisor or the board of supervisors shall not reply within the time limit before filing a lawsuit. Concluding remarks Although, China's "Company Law" has made great progress in the protection of shareholders' informed rights and interests, so that shareholders' rights and interests can be better protected and relief. However, the real realization of rights and interests will still be troubled by the realistic level, so the author thinks that we should actively learn from the advanced experience of foreign countries and establish a shareholder rights and interests protection system centered on the principle of shareholder equality and guaranteed by the corresponding litigation mechanism.
Foreword
The corporate governance structure regulated by China's Company Law implements the principle of capital majority decision, and the majority shareholder obtains control of the company through the more capital it invests, which in itself conforms to the principle of consistency of rights and obligations. Under this system, some shareholders, especially small and medium-sized shareholders, are in a weak position of information asymmetry because they do not directly participate in the operation and management of the company, so China's Company Law provides for the protection of shareholders' right to know. The following author tries to analyze the protection and improvement of shareholders' right to know.
Text
The right of shareholders to know refers to the right of shareholders to know and understand the important information of the company's business situation, and some scholars have defined the right to know as "the right of shareholders to obtain the company's information and understand the company's situation". The author believes that the shareholders' right to know should include the following aspects.
Shareholders' right of inspection
Article 33 of China's Company Law stipulates that shareholders shall have the right to consult and copy the articles of association, the minutes of the shareholders' meeting, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the supervisory board and the financial and accounting reports. Shareholders may request access to the accounting books of the company. If a shareholder requests to consult the company's accounting books, he shall submit a written request to the company stating the purpose. If the company has reasonable grounds to believe that the shareholders' access to the accounting books has an improper purpose and may damage the legitimate interests of the company, it may refuse to provide access, and shall reply to the shareholders in writing within 15 days from the date of the written request of the shareholders and explain the reasons. If the company refuses to provide inspection, the shareholder may request the people's court to require the company to provide inspection. Article 97 Shareholders shall have the right to consult the articles of association, the register of shareholders, the stubs of corporate bonds, the minutes of the general meeting of shareholders, the resolutions of the meetings of the board of directors, the resolutions of the meetings of the board of supervisors and the financial and accounting reports, and to make suggestions or inquiries about the operation of the company. The Company Law provides for the right of informed inspection of shareholders of limited liability companies and shareholders of limited liability companies, respectively. However, the author thinks that the company law is not very clear about the shareholders' right of access, and there are differences in the actual treatment.
Shareholders' right to question and the board's duty to explain
The right of shareholders to question is the right of shareholders to question and ask questions to the management of the company on issues related to matters considered at the general meeting of shareholders in accordance with legal procedures, and the management of the company is obliged to explain and answer questions to shareholders' questions. The setting of the right of inquiry can reduce the information asymmetry between the small and medium-sized shareholders of the company and the management of the company, so that the shareholders can make up for the lack of information by asking questions, and to a certain extent form the supervision and checks and balances of the management of the company. The scope of the content of the right to question is not stipulated in our company law. In this regard, national legislation generally provides in a general manner that shareholders can only exercise the right to question on specific matters and is limited to matters related to the subject of the general meeting of shareholders. The author believes that the scope of matters to be questioned by shareholders should be limited as the scope of the company's affairs is extremely wide, and if shareholders are allowed to question matters related to or unrelated to the issues of the general meeting of shareholders, it will easily lead to the abuse of shareholders' rights to the detriment of the company and the interests of shareholders.
The Company Law does not specify whether the subject of the exercise of the right to question shareholders is limited to shareholders present at the general meeting or includes all shareholders of the company who are not present at the general meeting, whether it is limited to voting shareholders or includes non-voting shareholders. The author believes that shareholders who do not attend the general meeting of shareholders can still exercise the right of inquiry, but only through the agent to exercise this right, the agent should submit a power of attorney to the company when exercising the right of inquiry. As to whether non-voting shareholders can exercise the right of inquiry, since the exercise of the right of inquiry will not lead to the leakage of confidential information of the company, there should be no restriction on the qualification of shareholders to exercise their right of claim. As long as they have the status of shareholders of the company, regardless of the proportion of shares held or the length of time held, whether they are voting shareholders or non-voting shareholders, they can request the board of directors and the board of supervisors of the company to accept inquiries on relevant matters.
Company inspector selection system
The right to request the selection of inspectors refers to when shareholders have legitimate reasons to suspect that there are major facts in violation of laws, administrative regulations or articles of association in the process of operation and management of the company, or when the operators of the company seriously violate the obligations of loyalty and good management, and damage the interests of the company and shareholders, they have the right to investigate the operation and financial situation of the company through the shareholders' (general) meeting, administrative organs and judicial organs. Compared with the shareholders' right of access and inquiry, the system of selection of inspectors can make up for the lack of professional knowledge of shareholders, and bring targeted factual information to shareholders. Of course, in the process of performing his duties, the inspector shall perform the obligation of confidentiality for the important information of the company he knows. If the company's interests are damaged due to fault, the inspector shall bear the corresponding responsibility, but the consequences arising from the normal performance of his duties shall be exempted from liability.
The perfection of the system of shareholders' right to know
1, first of all, the provisions of the shareholders' right to know to refine, for the exercise of shareholders' right to know to get a thorough protection.
2. The shareholders' right to know can be appropriately restricted to prevent individual shareholders from abusing their right to know and infringing on the rights and interests of the company. The author suggests that appropriate restrictions can be imposed on the number of years of shareholder ownership and the proportion of shareholder ownership.
3. Appropriate punitive consequences may be provided for acts that prevent shareholders from properly exercising their right to know.
4, the shareholder's right to know the pre-conditions of litigation. In order to prevent abuse of litigation and to play the role of supervisors and supervisory boards, the company law may provide for the preconditions for the right to know litigation. Before filing a lawsuit, a shareholder shall first submit a written request to the company for a reply from the company's management; if the company's management fails to reply after the expiration of a certain period of time, it shall request to the supervisor or the board of supervisors, and the supervisor or the board of supervisors shall not reply within the time limit before filing a lawsuit.
Concluding remarks
Although, China's "Company Law" has made great progress in the protection of shareholders' informed rights and interests, so that shareholders' rights and interests can be better protected and relief. However, the real realization of rights and interests will still be troubled by the realistic level, so the author thinks that we should actively learn from the advanced experience of foreign countries and establish a shareholder rights and interests protection system centered on the principle of shareholder equality and guaranteed by the corresponding litigation mechanism.
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