A Comparative Legal Study on the Capital Reduction in Taiwan

• Main Authors: Chia-Chien Lin, 林佳蒨
• Other Authors: Yi -Hong Hsieh
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/66646022446843234984

碩士 === 東吳大學 === 法律學系 === 97 === This research focuses on legal issues pertaining to “Capital Reduction of Corporation”. Since 2001, the scale and frequency of the capital reduction (including treasury stocks) performed by Taiwan public companies have increased tremendously. How and what is capital reduction in the eyes of the law？ To what extent conflict of interest may occur due to the capital reduction？ Could existing statues contain the conflict effectively？ In this study, “Return of Paid-in Capital for Capital Reduction” and “Making-up Losses by Capital Reduction” are the two arena to be observed and discussed. To re-examine the allocation of powers between board of directors and shareholders and in the end, to make an attempt to furnish a viable proposition（authority and accountability）for further improvement of the current legal system with respect to “Capital Reduction of Corporation ”, this research will, through the shareholder’s point of view, identify and clarify the conflict of interests among shareholders. This thesis consists of the following six chapters. To have the basic understanding of this study, Chapter I illustrates the motives, method, limitations and expected outcome of this study. Chapter II discusses the purposes and the types of capital reduction and outlines the true meaning of capital reduction under current legal structure to reveal the truth of capital reduction behind the traditional corporate capital rules. Chapter III mainly introduces the core issue－ the allocation of powers between board of directors and shareholders. Conflict of interests arising from the different types of capital reduction, the decision-making power of capital reduction without exception that distributed to board of shareholders may weaken corporate governance and impair shareholders’ interests. Therefore, this research has been conducting through the shareholders’ point of view and accompanying with questions and analysis by scholars and practitioners upon which to propose the improvement of capital reduction. In some kinds of capital reduction such as “Return of Paid-in Capital for Capital Reduction” and “Making-up Losses by Capital Reduction” conforming the principle of equality for shareholders without causing serious conflict of interests among shareholders, the decision-making power regarding capital reduction may return to board of directors；on the contrary, should such action cause serious conflict of interests among shareholders（such as making-up losses by capital reduction and conducting private placement at the same time）, board of shareholders will prevail. Chapter IV, by comparative cases study, it indicates that the agency costs arising from information asymmetry and controlling-shareholders could not be avoided or decreased in the current legal scheme of capital reduction. Chapter V proposes solutions for the above-mentioned issues, in addition to strengthening the duty of information disclosure, moreover, to promoting the fiduciary duty of controlling-shareholders. Chapter VI concludes by findings and opinions of prior chapters and proposing statue context that is to the best interests for both corporate and shareholders.