Regulatory Changes and Balancing Approaches for Corporate Control

Abstract

Modern company law regards shareholders’ rights protection as its core legislative goal, but equity protection needs to be achieved through control regulation. The widespread existence of corporate control relationship suggests that control interests can constitute an implicit incentive and that the control relationship has a dual effect on corporate governance. The traditional legislation that adopts a regulatory strategy of “mandatory prohibition and ex-post accountability” for the pursuit of control interests is inefficient. Especially due to the lack of positive guidance, there is a clear institutional imbalance. The Company Law (2023 Revision) demonstrates the orientation of balancing and regulating corporate control, adjusting the institutional functions of the company law by expanding the legislative purposes, meeting the control needs of controllers through diversified equity allocation, enhancing the effectiveness of corporate governance through flexible organizational structures, and ensuring the appropriateness of control behavior through a comprehensive accountability mechanism. In the future, control should be further transformed from facts to rights, its identification rules and power system should be improved, the limits of judicial intervention in commerce should be clarified to achieve prudent accountability, and attention should be paid to procedure-guided regulatory strategy.

Keywords

control / controlling shareholder / actual controller / control interests

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Higher Education Press