The Protection of Minority Shareholders-Focusing on Shareholder’s Right of dividends-

• Main Authors: Hsiao-En Teng, 鄧曉恩
• Other Authors: Ying-Hsin Tsai
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/78303635743448668159

碩士 === 國立臺灣大學 === 法律學研究所 === 101 === Basically, the distribute part of Company Act in Taiwan is to protect debtors. Therefore, the company act in Taiwan only says when the company can’t distribute dividends but does not say when the company has to distribute dividends. The company can have their own decisions. The procedure is that the directors should make a resolution of distributing dividends and then send the resolution to the shareholder’s meeting. Only after the shareholder’s meeting pass the resolution can the company distribute dividends. So according to our law, the directors and shareholders both have power to decide whether to distribute dividends or not. Because the law divided the power of distributing dividends into two parts, the shareholders need both two organs do their duty loyally to get the dividends. If any of the organs does not do their duty loyally, the shareholders can’t get the dividends that they are entitled to get. In our country, there are cases that the directors or controlling shareholders abused their power and made the minority shareholders can’t get the dividends they are entitled to get. Unfortunately, because our law lack of the functions to protect minority shareholders’ right, the minority shareholders were stick in the unfair situation. The U.S and U.K also have the cases that the controlling shareholders (usually who also are the directors) abuse their power to make the minority can’t get the dividends they are entitled to get. Both of the countries have functions to solve this problem. In the U.S, the minority shareholders can choose to bring an action to compel directors to distribute dividends. But this kind of action applies to the business judgment rule, so the shareholders have to prove that the directors have bad faith, fraud or gross abuse of discretion. The requirements make shareholders hard to success in the action. However they minority shareholders in U.S have another option. If the company is a close company, the shareholder can use the function that was particularly designed for close company. In the function, the directors and controlling shareholders have enhanced fiduciary duty because of the minority shareholders in close are more vulnerable. Therefore, the minority shareholders of close company are easier to success in the suit. As for the U.K, they have a special function called unfair prejudice. The unfair prejudice deals with the problem that the controlling shareholders oppressed the minority shareholders. Most of the cases that the minority shareholders can’t get or only get little dividends are solved by the function. In this article, I suggest that we should revise our law and let the directors have the complete power to decide whether to distribute the dividend or not and to decide the amount of dividend. And the complete power also means the complete responsibility. If the directors don’t do their job loyally, according to our law the shareholders can sue them. I also suggest that we should have a function to let the oppressed minority shareholders to leave the company and sell their shares in a fair price.