"Company" is a great institutional innovation in the history of human development. The company system, especially the limited liability system of company shareholders, has largely eliminated the concerns of investors and greatly released the enthusiasm of social investment. The wealth of Western society has changed dramatically in just a few hundred years, and it is basically created under the "limited liability system" of companies. With the development of society, the management of managers needs to be more and more diversified, so does the issue of equity. For example, the concept of equal shares and equal rights can no longer meet the needs of enterprise operation. Some operators can release equity based on the needs of company development, but they are not willing to release voting rights in proportion. Some investors are willing to make equity investments in the company, but they need more dividend income and so on. It has become necessary for enterprises to make differentiated arrangements for the voting rights and dividend distribution rights of the company's core equity, especially in the Internet, technology and other industries. Can the voting rights and dividend rights of shareholders be allocated differently according to the business needs? This paper will discuss the different arrangement of shareholders' voting rights and distribution rights from the legal point of view for managers' reference.

Shareholders and shareholder rights

The right of shareholders is the right of shareholders to participate in the operation and management of the company and obtain profits from the company based on their qualifications. The company has independent legal personality, and the shareholders' equity connects the company with the shareholders, including rights and obligations. The shareholders of a company participate in the operation of the company and share the profits of the company by exercising their rights. What rights do shareholders have in the company? First, the right to identity. After the shareholder makes the capital contribution, he has the right to obtain the capital contribution certificate and record himself in the register of shareholders, so as to prove his identity as a shareholder and exercise his rights as a shareholder according to law. Second, the right to participate in corporate governance. Specifically, it includes: the voting rights, the right to propose, the right to propose, the right to convene, etc., and the right to know and supervise the company's operating and financial conditions. Third, the right to investment income. The final purpose of shareholder investment is to make profit, and the shareholder makes profit through the right of distribution. At the same time, shareholders can also obtain capital gains by exercising rights such as equity transfer right, priority purchase right and share repurchase right. Fourth, the right to external relief. When the company's operation problems damage the rights of the company and shareholders, and the legitimate rights and interests of relevant parties cannot be protected through the internal governance of the company, the law also gives shareholders the right to exercise the resolution invalid or revocation request, the shareholder's representative litigation right, the judicial compulsory dissolution request and other rights to seek relief from external public power. Fifth, liquidation rights. When the company faces liquidation for various reasons and comes to its "end of life", the shareholders also have the right to claim the distribution of residual property, participate in or determine the liquidation group, etc., to safeguard their final rights and interests. As mentioned above, the voting right of shareholders' general meeting is an important power under the right of shareholders to participate in corporate governance. Dividend right is the next important right of shareholders to obtain investment income. The right to vote and the right to distribute dividends are also one of the shareholder rights that shareholders are most concerned about.

The differentiated allocation of voting rights and dividend rights of shareholders of limited liability companies

As mentioned above, the voting right of shareholders is one of the important rights under the right of shareholders to participate in corporate governance. Shareholders vote on corporate affairs according to the proportion of equity or shares they hold in a limited liability company or a joint stock limited company, also known as shareholder voting rights. Under normal circumstances, the amount of voting rights of shareholders determines the control of shareholders on the company. China's Company Law has undergone many revisions, different corporate governance concepts in different periods, and different legal space for the differentiated allocation of shareholder voting rights and dividend rights. Before the revision of the Company Law in 2005, "same shares, same rights" and "same shares, same benefits" were the basic concepts of China's Company Law, and China did not recognize the concept of "different rights with the same shares", so limited liability companies could not implement the differentiated arrangement of shareholder voting rights and dividend rights. The revised Company Law in 2005 has made changes, especially for limited liability companies. The revised Company Law stipulates: "The shareholders shall exercise their voting rights in accordance with the proportion of capital contribution at the shareholders' meetings; Except as otherwise provided in the articles of association." At the same time, the revised Company Law also stipulates: "Shareholders shall receive dividends in accordance with the paid-in proportion of the capital contribution; When the company increases its capital, the shareholders shall have the right to subscribe to the capital contribution in accordance with the proportion of the capital contribution actually paid. However, except where all the shareholders agree not to share the dividend in accordance with the proportion of capital contribution or not to subscribe for capital contribution in priority in accordance with the proportion of capital contribution." Therefore, under the current company law, it is the mainstream for shareholders of limited liability companies to exercise voting rights and dividend rights according to the proportion of capital contribution, but the Company Law allows the articles of association of limited liability companies to make different provisions, and the provisions of the articles of association take precedence over the law. Therefore, at present, limited liability companies can agree on the voting rights and dividend rights of shareholders in the articles of association that are inconsistent with the proportion of capital contribution, and carry out differentiated arrangements for shareholders' rights and interests.

The differentiated allocation of voting rights and dividend rights of shareholders of joint-stock companies

As mentioned above, before the revision of the Company Law in 2005, "one share, one right" and "one share, one profit" were the basic concepts of China's company law, and joint-stock companies were not allowed to implement the differentiated arrangement of shareholders' voting rights and dividend rights. The Company Law revised in 2005 has made some adjustments to the issue of dividend right of joint-stock companies. The revised Company Law stipulates: "The after-tax profits remaining after the company has made up its losses and withdrawn its provident fund shall be distributed by the joint stock limited company in proportion to the shares held by the shareholders, except where the articles of association of the joint stock limited company stipulate that the distribution shall not be in proportion to the shares held." Therefore, since January 1, 2006, joint-stock companies can make differentiated arrangements for the distribution rights of shareholders. However, regarding the voting rights of joint stock companies, the Company Law has been modified many times, but it has always been cautious. Article 103 of the current Company Law stipulates that each share held by a shareholder who attends a general meeting of shareholders shall have one vote; However, the shares of the Company held by the Company have no voting rights; Article 126 states: "The issuance of shares shall follow the principle of fairness and justice, and each share of the same class shall have the same rights." At the same time, in practice, the dual-class share structure with differentiated arrangements for shareholders' voting rights is the legal obstacle for joint-stock companies to be listed on China's main board market, which must be cleared before listing. Therefore, we are generally cautious about the differentiated allocation of shareholder voting rights in joint-stock companies. After the launch of the science and technology board this year, there has been a new change in the issue. In the science and technology innovation board, the CSRC introduced the concept of "same share with different rights" and allowed qualified dual-class share structure joint stock companies to be listed directly. On June 21, the Supreme People's Court of China issued Several Opinions of the Supreme People's Court on Providing Judicial Guarantee for the Establishment of the Science and Technology Innovation Board and the Pilot Reform of the registration System, and affirmed the validity of the "same shares with different rights" system of joint stock companies in the form of opinions. At this point, it is legal for joint-stock companies to make differentiated arrangements for shareholder voting rights and dividend rights. However, before the amendment of the securities law, joint-stock companies with differentiated voting rights should still be cleaned up if they are listed on the main board.

Based on the above discussion, in the current corporate governance practice, no matter limited liability company or joint stock company, the voting rights and dividend rights of shareholders can be differentiated according to the operation needs. The flexible arrangement of shareholder voting rights and dividend rights will greatly meet the needs of operators, especially in corporate financing matters. For example, in the process of financing, the operator can release 50% of the equity, but in order to maintain the control of the company, only 30% of the voting rights are released, and 60% of the dividend rights are released as compensation for benefits. In this way, the funds needed for the development of the company can be raised, and the founder can control the absolute control of the company's shareholders' meeting in his own hands. Investors can also obtain the maximum income and meet the interests of all parties.