The Research On Voluntary Discontinuance System Of Limited Liability Company

The modern market-oriented economy may be called the Corporation Economy to a certain extend. The dying-out of corporations would cast the same important influence on economy as the establishment of corporations would. The termination of corporations is closely related to their withdrawal from competitive markets legally or illegally, to the beneficial gains and losses of various interested persons and to maintaining normal economic order. Since, traditionally speaking, more concern has been with establishment of corporations than with termination of corporations, there are many problems in the system related to termination of corporations so that it is worth profoundly criticizing and introspecting relevant theory and rules. In this thesis, only the system related to voluntary discontinuance of close corporations with limited liabilities.Firstly, a dilemma out of a case is quoted so as to make people pay more attention to the chaos of voluntary discontinuance of close corporations with limited liabilities.Then, the basic theories of voluntary discontinuance, such as traditional theory and its rationale, are examined and revised, which results in clearer differences between the concept of termination and thatof winding-up and correcting some other misleading theories. It holds that the rationale of voluntary discontinuance is the theories of limited liabilities, self-decision-making and majority voting policy. However, there are some inevitable defects in these theories that need remedying and consummating by other theories such as creditors protection, piercing the veil of corporations, remedies for minority shareholders, reversionary interest shareholders and social liabilities of corporations. The theoretic cognition deviation and the imbalance resulting from different values are the basic reasons for the chaos in the termination stage of corporations in practices.After examining the above basic theories, defects in the substantive and procedural rules on voluntary discontinuance of close corporations with limited liabilities in China are elaborated from angles of causes and procedure of winding up, liquidation procedure and liabilities by comparing with other countries' relevant rules. The conclusion is made that the relevant system of China is still far from all-round comparing with countries with developed market-oriented economy.Last, it is held that legislation defects directly result in the chaos in the termination stage of corporations in practices. Some legislative designations are put forward in this thesis including addition and revision of remedies for abnormal voluntary discontinuance causes, winding-up registration, subject of liquidation, special liquidation, rescinding fraudulent transactions, going-concern of corporations and all relevant civil liabilities.