A Study on the Restriction of the Legitimate Purposes of Shareholders’ Inspection Right from an International Perspective

With the separation of shareholders’ ownership and control of a company, the law of China should not only constantly expand the scope of protection of shareholders’ right to information, but also improve the protection measures accordingly. As a major right of shareholders, inspection right is the basis and prerequisite for shareholders to exercise other rights. Under the lure of power, if shareholders’ right to obtain corporate information cannot be reasonably protected, it will be inevitable for the operators of the company to manipulate the information and thus violate the interests of shareholders. The provisions of article 33, paragraph 2 of Company Law of China relating to shareholders’ right to information are too brief and to a degree, not viable and feasible. Furthermore, in judicial practice, the meaning of legitimate purposes varies with different judges, leading to different standards and different decisions even in some virtually similar cases. Although the Interpretation of Company Law (IV) tries to solve the above judicial dilemma, there are still some deficiencies in the definition of legitimate purpose. Therefore, in order to enhance the right of the shareholders’ inspection, it is desperately necessary to learn from the relevant experience of extraterritorial law. This paper, by mainly analyzing the regulations of Japan and Germany on shareholders’ right to inspection, concludes that the Company Law of China can make changes on the following four aspects: refining the judgment standards for legitimate purposes, clarifying the connotation of legitimate purposes, expanding the domain of application of the shareholders’ inspection right and introducing the inspector system.