On August 25, 2017, the Supreme People's Court ("SPC") issued the Provisions on Several Issues Concerning the Application of the Company Law of the People's Republic of China (IV) (the "Provisions"), which will take effect on September 1, 2017.

The Provisions elaborate in 27 articles several issues on the application of law in hearing cases involving disputes over five subjects, namely the effectiveness of corporate resolutions, shareholders' right to know, right to share profits, preemptive right, and suits brought by shareholder representatives. Specifically, the first is improving the mechanism for bringing proceedings against defects of corporate resolutions; the second is reinforcing protection of shareholders' statutory rights to know according to law; the third is actively considering ways to improve judicial remedies available for shareholders in respect of their right to share profits; the fourth is regulating the exercise of the preemptive right by shareholders and the damage compensation if such right is infringed upon; and the fifth is perfecting the shareholder representative litigation mechanism. According to the Provisions, if a shareholder requests a distribution of the company's profits but fails to present a resolution approved at the board of shareholders or the general meeting of shareholders in respect of the detailed profit distribution plan, the court should dismiss such claim, unless the failure to distribute the company's profits is attributed to any shareholder's abuse of shareholder rights and results in losses suffered by other shareholders.