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This article examines the contentious issues surrounding the validity of company resolutions, analyzing judicial cases and legal developments. It is divided into four parts: the evolution of relevant laws, litigants in disputes, causes of common defective resolutions, and the right to revoke resolutions under certain conditions.

I. History of the Resolution Validity System

Article 22 of the current Company Law (2018 Amendments) introduced the concept of defective resolutions. The Supreme People's Court's Judicial Interpretation IV and the new Company Law (2023) further refined this system, categorizing resolutions as invalid, revocable, or unestablished. The new Company Law incorporates these classifications and provides clearer guidelines for revocation periods and legal consequences.

II. Litigants in Disputes

A controversial issue in these disputes is whether hidden shareholders can be qualified plaintiffs. The author argues affirmatively, stating that hidden shareholders should have the right to file lawsuits under specific circumstances. This view aims to enhance corporate compliance and protect shareholders' rights.

III. Causes of Common Defective Resolutions

The article identifies several common risk points in the decision-making process that can lead to defective resolutions:

1. Invalid Resolutions:

· Violation of Profit Distribution Provisions: Resolutions that do not comply with the Company Law's profit distribution rules are invalid. For example, a case in the Tianjin Second Intermediate People's Court invalidated a resolution due to non-compliance with profit distribution regulations.

· Violation of Shareholder Disqualification Provisions: Disqualification of shareholders must strictly adhere to the Company Law. The Beijing Semiconductor Manufacturing Cloud Printing Technology Co. Ltd. case highlighted that resolutions disqualifying shareholders without proper cause are invalid.

2. Revocable Resolutions:

· Resolutions can be revoked if procedural defects are significant or if they violate the company's articles of association. The new Company Law sets a one-year exclusion period for revoking resolutions, addressing the procedural aspects more clearly than previous regulations.

IV. Right to Revoke Resolutions

The new Company Law stipulates that resolutions with minor procedural defects may not necessarily be revoked, introducing a "discretionary dismissal" regime. However, this regime's application remains controversial, emphasizing the need for companies to carefully adhere to legal requirements in their decision-making processes.

Conclusion

Ensuring the validity of corporate resolutions requires careful attention to both procedural and substantive legal requirements. The evolution of the Company Law and related judicial interpretations reflects an ongoing effort to balance corporate governance with shareholder protections, aiming to minimize disputes over resolution validity.

By understanding and addressing the causes of defective resolutions, companies can improve their compliance practices and reduce the risk of invalid or revocable resolutions.