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.