| The current Chinese Company law applies the civil law paradigm of juristic acts to invalidate all defective resolutions from the beginning to ensure the plaintiffs' remedies and maintain corporate stability by reliance protection. However, this approach leads to the separation and conflicts between the plaintiff's remedies and corporate stability and efficiency. This results from the fact that invalidity of the defective resolutions from the beginning as a plaintiff's remedies is lack of justification, pertinence and feasibility. According to the principle of proportionality, the arrangements for legal consequences should be distinguished on the basis of the severity of the defects. Only through the reconstruction of the validity of defective resolutions, the balance between the individual plaintiff and the company's overall interest can be reached. Only resolutions with extremely serious defects can be denied of their validity from the beginning, and thereby forbidding their implementation or granting restitution after the implementation. Otherwise, resolutions should incur more soft legal consequences, such as being rendered invalid in the future or paying damages. By this way, corporations can obtain greater efficiency and stability. Based on the above, the current trichotomous litigation classifications should be abolished and replaced with a uniform litigation of defective resolutions and litigation period. Resolutions on corporate organizational changes can be implemented and maintain their validity after the implementation only if there is no lawsuit filed within the litigation period or the court has ruled out serious deficiencies after any lawsuit is filed. |
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