The Company Capital Formation, Balance The Interests Of Shareholders And Creditors In The System

The balancing of interests is an everlasting topic of constructing the harmonious society. It is researched that the capital system is as to the formation of the capital of the company from the view of the balancing of interests between its shareholders and creditors in this article. The basic point of this article is that the capital system in connection with the formation of the capital is a system that balances relationship of relevant benefit people including shareholders and creditors of the company. As limitation of the wording length, this article does not cover the balance issue of relevant benefit people of the company other than the shareholders and creditors. In my view, the function is different between capital and capital system. Namely, the capital is not only used as a tool by shareholder to realize increasing income of investment, but also used as the base to assure the achievement of the interests of the secured creditors. The opposition of interests between shareholders and creditors resulting from the double functions of the capital, which can be eliminated by neither the capital itself nor the parties, is only able to depend upon the power of the legal system. With respect of the capital system, especially the system of the capital formation of which as the base, which rules the behavior of principal part who makes use of the capital element, the rationale for establishment of it is to balance the interests relationship between shareholders and creditors, but not only to protect creditors (in despite of the inferior position of creditors on controlling capital element). On the basis of the rationale, the system of the capital formation should promote investment and advantage shareholders to achieve their interests rather than becoming a periapt of shareholder to evade the obligation of contribution. On the other hand, the system of the capital formation should regulate shareholders' behaviors of contribution and ensure the realization of the creditors' interests rather than becoming the inhibition of the effectiveness of the capital. Based on above basic point, the discussion in this article is separated into six parts, including introduction, Chapter One to Chapter Four and conclusion. Introduction In this part, it is summed up the definition of the capital, and states the objective inevitability of interests opposition between shareholders and creditors on the base of double function of the capital element which creates increment of capital value and assures creditors' interests to be realized, and educes the basic point which the capital system and the system of the capital formation is to be balancing of interests relationship between shareholders and creditors. It is also the objective inevitability of the opposition which need to be balanced by legal system. In this part, it is assessed on the phenomena of preferring transaction security to efficiency of the capital, restraining the fervor of shareholders' investment so as to protect creditors' interests, blocking investing channel of shareholders, and restricting the exertion of the capital efficiency. The trend of the international capital system reform and introduction of the capital system's reform in China are addressed in this part as well. Chapter â…  the Idea for Balancing of the Interests in the System of Company Capital Formation It is discussed on the following four aspects: 1. Introducing the contents of the system of capital formation, including the lowest capital system, the model of the capital formation, the carrier system of the capital formation, the share subscription and distribution system of the capital formation, the promoters and shareholders' contribution obligation system in the process of the capital formation, stipulation and proportion model of the type of the capital, and the other contents. In this chapter it is also analyzed the character of the system of the capital formation, including opposition and consolidation on randomicity and enforceability of the system of the capital formation,...