A Study On Corporation’s Declaration Of Intent

A corporation is a business organization with an aggregate body of human beings. There are different views on the legal nature of the corporate personality, which mainly originated from real entity theory in the Continental law and the fiction theory in the Common law.Generally speaking, in Continental law, the corporation acts externally through its organ which is called representative, directors are normally qualified to represent the corporation under the theory of representation. In the Common law, the external activities of the corporation are achieved through the agency of directors, managers or other employees. In view of the modern enterprises involving in economic activities, in addition to the corporation’s representative to exercise the right of representation, commercial employees such as managers, clerk or sales personnel also help to expand the corporation’s activities, and are entrusted to manage the business and affairs within the scope of the delegated power. Based on the theory of declaration of intent, the corporation is composed of organs with shareholders, the board of directors and supervisory body to form the resolutions as internal wills, representatives or agent executes the resolutions externally. If there were defects in the resolution or restrictions on the representation, the effectiveness of the juristic act by the representative or the agent would be undermined. All the activities are carried out by the natural person who forms the governing bodies of a corporation, thus flaws on the formation and expression of his wills should be attributed to the corporation, obligations resulting from their act would be taken by the corporation.The first part focuses on the historical background of the corporation and its declaration of intent. The concept of the corporation as a legal person developed from the Roman law, the corporate body is separate from its members as individuals and from its members as a group. The members act collectively through an agent who can act in their name. In the Medieval period, collectivism and formalism were the dominant spirit of the society, and the concept of the corporation as a legal person developed greatly under the influence of the Germanic law and the Canon law. Different views of the corporation were exposed by Glossator and Post-glossator. After the reception of the Roman law, enlightenment and rationalism pushed forward the legislation of the subject with personality, juristic act and legal person were codified in modern times.The second part addresses the theoretical basis of the corporation’s declaration of intent. A corporation with the legal personality is the prerequisite for having capacity to express its wills. As a legal person, a corporation’s will is a kind of group will which is separate from its shareholders and formed through specific procedures or rules followed by. A corporation’s intent should be declared by its organ with the power to represent or through agency such as officers or employees. Due to the different organs borne with, it makes itself distinguished from natural person on the expression of the wills. In Continental law, an act by representative of the corporation is deemed the action of the corporation itself. In Common law, an act by directors or mangers is an individual behavior, they are the agents of the corporation but not deemed as the organ of the corporation.The third part mainly deals with the formation and expression of the corporation’s wills. Ultimate power of making decisions retains within the general meeting by shareholders, however, its resolutions should be executed by board of directors. As the Board is a functioning organ of the corporation, it has decision-making authority on management of business in a corporation. In German law, the Board is on behalf of the corporation; while in Japan, South Korea, and Taiwan, director is qualified to be elected as representative organ of the corporation, all the wills formed should be expressed by the directors. Unlike natural person, there are certain restrictions on corporation’s declaration of intent arising from the biological properties of human beings and the stipulated law. During the process of incorporation or operation or liquidation, there are different organs existing to express the corporation’s wills.The fourth part attempts to generalize principles for interpreting corporation’s wills, and analyze the legal effect of the act by the representative or directors and officers when they are executing the flawed resolutions externally. The seal is widely used in the legal transaction, it is only a tool to show the corporation’s wills, but under the context of the China’s business practice, it is one of the important aspects to be discussed in this part. The highlighting of this part is closely related with the judicial practice, many cases from the Gazette of the Supreme People’s Court are cited or the latest judgments delivered by the Supreme Court or lower courts are deployed for reasoning the point of views.The last part makes comparative study of the corporation’s representative system in the Continental law. It examines the legislation of different nations or region such as Germany, Japan, South Korea and Taiwan on the representation. Right of representing the corporation is bestowed to a specific organ in the corporation, restrictions on the representation has no effect as against bona fide third parties in these countries, but in Germany and Switzerland, any provisions governing representation of the company that are entered in the commercial register are exceptions to this rule. In the end, suggestions are formulated to improve the representative system after thorough reviewing of the legislative and judicial problems arising from current representative system in China’s Corporation Law.