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Mechanism Perfection of Restrictionon the control

  (1) Time limitation for exercising the right. It’s out of consideration for company’s normal operation with such limitation. There are two reasons: 1) Without time limitation, some large shareholders may require the board of directors to hold the meeting at will for their personal interest.This ususlly will cause unsteadiness within the company and have adverse impact on the company’s operation. 2) Some speculative shareholders, in spite of holding lots of shares, have no intention to acquire company’s control right. They only want to gain from price fluctuations and act on the Wallstreet Principle. Under such circumstances, they may rise in revolt against the company casually.
  (2) Minimal shares holding. Relevent regulation in Taiwan’s corporation law shows that it takes a relatively restrictive attitude toward shareholder’s supervision over the company. In mainland, state-owned can easily require holding the meeting, which will cause great difficulty in reality. In order to solve this problem, it is advised to permit middle and minor shareholders to exercise the right in the form of signature jointly or authorization. That means middle and minor shareholders holding 10 per cent or more of shares of the company in the form of signature jointly or authorization are entitled to exercise the right.
  (3) Countermeasure when the right is denied. Regulation that shareholders can hold the meeting by themselves when their right is denied provides a remedy for them. But if the general director refuses to preside over the meeting, what can they do then? In my opinion, the general director is the legal person in the company and has the legal right to preside over the meeting. The fact that he/she refuses to exercise the right may go against the interest of the whole shareholders. Under such circumstances, it’s duty of the board of supervisors to urge the director to do his/her job. If necessary, the board of supervisors can preside over the meeting in place of the director.
  3、 Article 111 of the Corporation Law regulates that if any resolution adopted by shareholders’ general meeting or the board of directors violates any law or administrative regulation or infringes the lawful rights and interests of shareholders, shareholders have the right to initiate proceedings in the people’s court to require that such acts of violation or infringement be stoped.


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