Revisiting Dual-Class Share Regulation in China: Lessons from Comparative Perspectives

This study examines the regulatory framework for dual-class share (DCS) structures in China’s capital market following the recent revision of the Company Law of the People’s Republic of China (PRC) and the comprehensive implementation of the stock issuance reform with registration-based regime. While the stringent regulatory policies initially appeared justifiable upon introducing the structure, their practice has not been as effective as expected, indicating a gap between theory and practice. In response, the paper proposes a gradual easing of the stringent restrictions in light of the new company law permitting DCS structures, along with enhanced ex-post legal remedies to establish a robust legal basis and institutional backing for companies adopting such structures.