On Essence Of Companies

Chapter 1:PrefaceFacing the fact of the lack of basic theory of commercial law and company law,and extremely isolated academic thinking and insufficient study on company law;facing the fact of the lack of reflection on the theory of profit-making legal person anddiscussion it in a broad way; facing the fact that the theoretical improvement andguidance by practice of company law are needed because of the vigorous growth ofmodern social substance, knowledge and credit economy. To enrich the theoreticalbasis for civil commercial law and enhance the power of explanatory and guidingpower of the basic theory of company law to corporate organization system andoperating practice, the essence of companies is chosen as the object of study for thisthesis, which is a typical and difficult basic theoretical topic. Systematic demonstrationon the attribute of the essence of companies is carried out from multidimensionalangles of view, with our intention to make in-depth investigation and a breakthrough tothe limitation of subjectivity of a single company, to discover and summarize theessential law of formation and operation of companies and the reasons for their life andto devote our effort to new understanding and improving the corporate system ofnorms, and enriching the judicial theoretical basis.Chapter 2: Theoretical Basis for Study on Essence of CompaniesStudy on essence of companies has important value of the basic theory andpractical significance. The purpose of this study is to clarify the historical context ofthe emergence and development of companies from their origin, to find out theprerequisites, legal characteristics, logic of will and foundation of interest forformation and existence of modern companies, to reveal the legal status, law ofoperations and living truth of the company organizations, to provide the theoretic basisfor people to understand, interpret, evaluate the complex phenomena and theory ofmodern companies, and to offer ideological inspiration and guidance for people tore-understand and sector sub-standard status of different types of companies undergeneralized perspective, improve its design and give a better play value of its application. Phenomenon and Essence, benefits and risks are the basic areas of thisstudy. Individual, organization and judicial subject as well as object, property andintelligent tool is the important concepts and demonstration tools of this study. In thischapter, the scope and meaning of the concept are discriminated and definedrespectively. In order to have an overall grasp and a clear understanding on therelevant research results by the theoretical circles, this chapter focuses on systematiccollation and assessment about many doctrines of the academic circles on the legalessence. As a starting point, this chapter lays a foundation for the commencement ofthe theory of concept of multidimensional essence of companies hereinafter.Chapter 3: Theory of Independent Personality of Companies as Profit-Making andRisk Aversion OrganizationsThe pursuit of profit allocation and saving hedge is a sign of corporate differentfrom other legal persons and unincorporated associations and is also the purpose forthe shareholders of the company to carry out various kinds of legal adventure acts.Fulfillment of the purpose must be in conformity with the common requirements of thebusinessman consensus as well as the national laws. Convenient financing, efficientmanagement and diffusion of risks and other functions of the independent personalityof modern group of companies can meet such requirements very well. Corporatepersonality is a product of joint administration of private consensus and legalformation and the practical needs of economic and social life and the result of legaland technological progress. The independent subjectivity of corporate organizationswith limited liability of shareholders as the cornerstone of subjectivity break the binarymain structure of the national and natural persons, and therefore presents unlimitedcharm to investors and managers. The in-depth understanding and effectiveovercoming of its limitations is a long-term and unremitting task of the theoreticalcircle, stakeholders and the state laws and is also the direction of later efforts.Chapter 4: Property Object on the Organizations in Transaction under CorporateControlThe conventional company law is based on the assumption of independence of asingle company as a proposition, however, this assumption is questioned and shakendirectly by the change of the concept of modern social properties, the property rightstrading on the capital market, the companies as products traded on financial market,integration of related companies, group management and institutional practice. It is difficult to give a satisfactory explanation and effective response by the theory ofindependent corporate personality. Therefore, it is necessary to review the practicalsignificance of disregard of legal persons and pay attention to the essential attributes,such as their properties and objectivity of the corporate organizations. The existence ofintegrated related controlling company has its necessity and positive external reasons,which shall be protected, but the negative external nature generated from theirimproper related trading is in conflict to the aim of legislation for independentcorporate personality and principle of limited liability of shareholders, which is theroot for the conventional company law to be established. The mechanism of interestbalance under the framework of the conventional company law is overturned. It isdetermined by the nature of related controlling power that the behavior of the relatedcontrolling party for abuse of the controlling power cannot be checked through theirself-disciplinary and self-governance actions. The traditional company law with asingle company as its administrative object lacks effective balancing mechanism. Sucha company law with system loopholes or with omitted or invalid contexts must bereformed. Systematic and effective legal control shall be imposed on misuse of relatedcontrolling power. A controlling power constraining mechanism and a powerresponsibility system shall be established with the related controlling party as the core.Chapter 5: Technical and Intelligent Tools on Companies'Aims and WillsOrganization shall adhere to individuals in essence and shall be subject to nationaland social constraints of the public will. The independence of corporate personality isonly true in term of relativity. Company is a technical and intelligent tool in servingthe shareholders, the nation and other stakeholders in the aims and wills in a game. Theself-governance tools for the profit-making nature of the companies are the source ofgeneration and vitality of companies in nature. The company's legal guidance andforced equity tools are the"legal genes"and a regulator towards benign"mutation"innature. The standard of interactions between the two factors, which rule each other inturn from time to time, is the nature of good order of the game process among theadventure of minority for their personal gain, the group will inside the company andthe public benefit will outside the company and the relative fairness of the result. Theequity benefit of logic interaction is realized through the company's legalresponsibility and social responsibility mechanism. The final decisive power toinfluence the growth and change of a company and its related group shall be reality needs for the historical change of social production and management and country-specificchanges. This is the golden key for understanding the multidimensional essence ofcompany structure.Chapter 6: Standard Significance of Concept of Multidimensional Essence ofCompanyPeople exist as individuals and groups. Both individuals and groups havefundamental values. The concept of multidimensional essence is capable to understandthe system structure and standard regularity of companies from more than onedimension including separation and inclusion of groups and individuals and interactionof outside and inside dimensions. In this way, it not only helps to deeply understandthe basic theoretical issues such as the regularity and driving force for formation,existence, development and change of company, but also helps to re-interpret, evaluateand improve the company's generalized normal system. It is necessary to clarify thevalue target, basis of legitimacy of different types of company and its position in thenormative structure of company; to sort out the factors of promoting and constrainingfor function segmentation and role to play of different company standards; and to pointout the direction and theoretical basis for design and improvement of company's legalstandards. Attention should be paid to restriction of improper insider trading behaviorand individual violations by the related controlling party and their agent operators ofthe company.