Generally speaking, the main purpose of shareholders' investment in establishing a company is to obtain investment income, and shareholders' request for surplus distribution is the main means for shareholders to obtain investment income from the company.
First of all, whether and how the company distributes the surplus is an internal matter of the company, and it is a matter for the board of directors and the shareholders' meeting to judge for themselves.
Articles 37 and 46 of the Company Law stipulate that the profit distribution plan of a limited liability company shall be formulated by the board of directors of the company and reviewed and approved by the shareholders' meeting. Article 14 of the Supreme People's Court's Provisions on Several Issues Concerning the Application of the Company Law of People's Republic of China (PRC) (revised in 2020) (hereinafter referred to as Interpretation 4 of the Company Law) stipulates that if a shareholder submits a valid resolution of the shareholders' meeting or a resolution of the shareholders' meeting with a specific distribution plan, requesting the company to distribute profits, and the people's court refuses to distribute profits, the defense that its resolution cannot be implemented cannot be established.
According to the above provisions, in the case that the company makes a resolution of the general meeting of shareholders to specify the specific distribution plan, the creditor-debtor relationship has been formed between the company and the shareholders, and the shareholders may request the company to implement the distribution plan according to the above dividend resolution.
In addition, if the shareholders have reached a substantive agreement on dividends, but not in the form of a resolution of the shareholders' meeting, the plaintiff shareholders can also submit documents with the contents of the income distribution plan, such as shareholder agreement and dividend settlement, as evidence.
Two, although there is no dividend resolution, but the company has a surplus to be divided, under special circumstances, shareholders can also request the court to make a compulsory dividend.
Although income distribution belongs to the category of corporate autonomy, there are indeed many cases in which controlling shareholders infringe upon the rights and interests of minority shareholders. Article 15 of the fourth interpretation of the company law stipulates that judicial intervention in the distribution of company income. Article 15 of Interpretation IV of the Company Law stipulates that if a shareholder fails to submit a specific distribution plan to the shareholders' meeting or a resolution of the shareholders' meeting and requests the company to distribute profits, the people's court shall reject his claim, except that the company does not distribute profits because it abuses the rights of shareholders in violation of the law and causes losses to other shareholders.
Therefore, if the plaintiff shareholders can prove that the company did not distribute profits and caused losses to other shareholders because of abusing shareholders' rights in violation of the law, even if there is no dividend resolution, they can request the court to judge the company to pay dividends to shareholders.
The above-mentioned abuse of shareholders' rights generally includes: some shareholders conceal profits and transfer profits, and some shareholders actually get the distribution of the company's profits, but the rest shareholders do not enjoy the same dividend rights; Pay excessive remuneration to shareholders or their designated personnel who work in the company, and purchase property and services unrelated to the company's operation for shareholders' consumption and use.
Therefore, in the case that the company has the conditions to pay dividends, but does not pay dividends, if shareholders can prove that there is abuse of power by shareholders, minority shareholders can choose to ask the court for compulsory earnings distribution, which is also a remedy.