The Research About Defective Establishment Of Corporation System

The So called Defective Establishment of Corporation means the legal process and remedies or measures of those corporations with defects during their establishment in Corporation Law. The Defective Establishment of Corporation has become a major issue in today's business world. The uncertain attitude of the Company Law towards the defective corporation will lead to insecurity of transactions between creditor or beneficiary with the corporations. It's not good for the stable and orderly development of the market. So the importance of creating a Defective Establishment of Corporation system is highlighted increasingly in business law of various countries. The remedies and legislative attitude of Corporation Law determines the legal personality and survival of those Defectively Established Corporation directly. As a result the legislative attitudes towards the Defective Corporation's are more and more cautious in every country. Of course, different legal systems have different legislation, which leads to the different legislative attitudes towards Defectively Established Corporations. It shows obvious differences between two legal systems on recognition of the legal personality of defective corporation. The Anglo-American Legal System holds the effective legislative attitude towards the defectively established corporations, which is due to considerations of the transaction efficiency and dynamic transaction security. It ensures innocent parties interests and securities in the dynamic transaction process. On the contrary, the Civil Law system holds the ineffective legislative attitude towards the defectively established corporations, which is due to the considerations of static transaction securities, the Civil Law emphasizes the denial of legislative attitude when founding a corporation improperly in order to ensure the fair and equitable treatment in law. It can be said that there are different evaluations of defective establishment in both legal systems. However in recent years,the distinctions are beginning to fade slowly between two legal systems, construction and improvement of Defectively Established Corporations show the trend of convergence and integration. It shows specifically that Defectively Established Corporations will not be able to easily deny its effectiveness and personality in Civil Law system countries. However Civil Law system limits the Establishment of Defective Corporations invalid application strictly. And The Anglo-American Law System recognizes Defective Corporations in principle, and permits the creditors and stakeholders to deny the effectiveness and legal personality of those corporations which have major defectives by the form of revocation.In our country, we always adopt the Civil Law system, we tend to use Civil Law countries'legislative tradition, construction of the legal system and valuations. So the writer still bases on the Civil Law and advocates to establish the invalid Defectively Established Corporation system in our country, and establish related legal proceedings to limit invalid application strictly and effectively.