The Impact of Voting Trust System on Corporate World and Its Significance for China & Its Economy
International Journal of Business and Economics Research
Volume 9, Issue 4, August 2020, Pages: 263-268
Received: Jul. 18, 2020;
Accepted: Aug. 12, 2020;
Published: Aug. 19, 2020
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Ali Raza Ansari, Guanghua Law School, Zhejiang University, Hangzhou, China
Alexandra Jane Davis, Guanghua Law School, Zhejiang University, Hangzhou, China
Kashif Imran Zadi, Guanghua Law School, Zhejiang University, Hangzhou, China
Shareholder voting trusts have had a huge impact on the world as an important device for the protection of shareholders and corporations alike. However, this instrument is missing in the corporate sector of China – one of the world’s leading economies. In Part 1, this paper looks at the history of voting trust systems and the path toward legality. Historically, voting trusts were challenged by corporations and majority shareholders before the Court realized the public benefits of shareholder trust agreements. Part 2 uses examples of voting trust systems in other countries to demonstrate its necessity for the well-being of China’s corporate system. On the one hand, voting trusts are required for the protection and faith of shareholders and their participation in the market. One of the biggest threats to public participation in investment is lack of protection for minority shareholders. On the other hand, as a corporate safeguard, voting trusts provide an avenue for minority shareholder voices to be heard and prevent corporate dissolution resulting from majority shareholder activism or hostile takeover. Consequently, for China to reach its ultimate goal of becoming the world’s largest economy and “Made in China 2025,” establishment of a voting trust system within the Chinese corporate sector is essential.
Ali Raza Ansari,
Alexandra Jane Davis,
Kashif Imran Zadi,
The Impact of Voting Trust System on Corporate World and Its Significance for China & Its Economy, International Journal of Business and Economics Research.
Vol. 9, No. 4,
2020, pp. 263-268.
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