The revised Company Law took effect on July 1, 2024. It introduced several important changes to shareholder rights protection and corporate governance.
Key Changes
The main changes related to shareholder rights include broader access to company documents, improved exit mechanisms, stronger protection for minority shareholders, and clearer responsibilities for controlling shareholders and actual controllers.
Shareholder Information Rights
The revised law expands the materials shareholders may inspect or copy, including articles of association, shareholder meeting minutes, board resolutions, supervisory board resolutions, and financial reports.
Shareholder Exit Mechanisms
The revised law adds buyback rights in certain circumstances, giving minority shareholders more options when corporate governance problems materially affect their interests.
Minority Shareholder Protection
The cumulative voting system and related governance rules have been improved to strengthen minority shareholder participation.
Controlling Shareholder Duties
Controlling shareholders and actual controllers must act with loyalty and diligence and may not use related-party relationships to harm company interests.
Practical Impact
Companies should review articles of association, shareholder agreements, board procedures, internal authorization systems, and related-party transaction controls.
Recommendations
Businesses should organize internal training, update governance documents, review shareholder arrangements, and seek professional legal advice where necessary.