Legal Consideration Of The Dissimilation Among The Commercial Guarantee Company

With Security mode, the guarantee company makes a good effect on providing financial services for small and medium-sized enterprises and promoting the development of local economy. Therefore, the guarantee company not only wins the interests but also creates a good benefit for the society. However, things have two sides. There are crisis behind in the guarantee industry. In recent years, commercial guarantee company internal appears many illegal operation and most of commercial guarantee company abandon the main guarantee business. We named this phenomenon as the dissimilation among the commercial guarantee company. Forms including:do other affiliate transaction beyond the scope of main guarantee business, cheat the credit funds from the Bank, illegal fund-raise, operate usurious loan, shareholders escape capital from the commercial guarantee company, illegal invest with appropriated funds be drawn from the company and so on. The dissimilation give an index to legal problems, that is more and more commercial guarantee company don't really run guarantee business mainly. In fact, they make use of the guarantee business to do various illegal operations which are departure from state policies, laws and regulations and business industry rules. Under the influence of the dissimilation, guarantee industry is in a mess development. More seriously, it badly damage people's interests, and the economy order and financial order be disturbed.According to Law and finance theory, law plays a key role to protect the investors as well as the efficiency of the implementation of law, in addition, it impacts financial system significantly and it is a determination factor of the economic growth., moreover, it is has important legal significance and policy implications for a country's financial strategy. As a transformation country, the legal system of china is not very perfect. As a Principal transaction in financial market, it is necessary to analyze the illegal factors and find out the legal reasons when alienation phoneme occurs inside the commercial guarantee company to realize whether there are loopholes and weaknesses in external monitoring system. Ultimately, to seek further legal measures; governance and the elimination of alienation which existing in commercial guarantees companies by analyze the reasons of issue.The puipose of this paper is to address two issues, first to analyze the alienation in commercial guarantee company legally, and clear the legal issue of the commercial guarantee activities, the other one is to analyze the relevant legislation in china's guarantee industry and the defects in the legislation to find solutions of alienation in the commercial guarantee company as well as the approach of legal regulation. This dissertation has five sections. The first section will elicit the issues of the paper aims to explain by explore the "alienation" existing in commercial guarantees companies through some classic case studies, and it paving the way for the strategies introduced in the section five. The second part will give a general analysis of the development status of the whole guarantees industry as well as the significance of the research on the alienation in commercial guarantees companies. The non-standard operating system in guarantee industry is increasingly serious nowadays, which has attracted the great attention of regulators, and storm of industry consolidation is weeping the whole country. However, it does not produce the desired results, as far as the author considered, in order to standardize and fulfill the proper function of SME Financing Guarantee Company, The law must be completed and legal supervision must be improved to ensure the health development of the guarantee industry, industry consolidation can only be the supplementary;Section three will detailed analyze the specific forms and illegality of alienation in commercial guarantees companies. In this part, the author analyze the legal relationship between" public" and "private" in credit guarantee activities, as well as the illegal nature of alienation from the vertical and horizontal expansionThe forth part will list the relevant legislation of guarantee industry, and the defects existed in regulating business activities in China guarantee industry which found by author. Section five will elaborate the specifications and governance strategies of alienation in commercial guarantees companies, which include improving the legal regulatory system, striking banking prudential regulation of financial institutions to conduct business, and building a social credit legal system.