Research On Close Corporation Legislation In The United State

In the United States, close corporation is the basic form of early corporation. With socilialized production and the great merger movement at the end of 19th century and the beginning of 20th century, large public corporations sprung up. Due to their enormous economic effects and the public interests they represented, public corporations became the focus of corporation law while close corporations then ended up with the status of"orphan of corporation law". The situation had not been changed until some sixty years ago when case law first discovered the special needs of close corporations. After that, state authorities began to include close corporation in their respective general corporation laws in different manners. Through firstly looking back at the history of American corporations and legislation, then exploring the current legislations of all states, this Paper aims to find out the mission and philosophy of close corporation legislation hidden under diverse provisions, providing reference for the legislative reform of close corporations in China.This Paper comprises the Introduction and five chapters:The Introduction is the origin of this Paper and the preliminary discussion of the meaning of the research, in addition to the simple introduction of the American and Chinese research in this field.Chapter One is the overview of close corporation, including two sections: the first being the concept and characteristics of close corporations as well as comparison between close corporation and other similar enterprise forms; the second being the necessity of research on close corporation legislation in light of the characteristics of close corporations.Chapter Two is the evolution of American corporation legislation which, based on the incorporation principle, can be divided into two sections. The first section is the"corporation"legislation in the era of incorporation by charter when"corporation"was incorporated by charter with the outstanding trait of having perpetual existence independent from its members who, however, did not enjoy limited liability. The following section is the corporation legislation in the era of incorporation by statute which consists of two subsections being the legislation of modern business corporations in early days and the historical background of legislative consideration for close corporations, demonstrating three stages where the law well suited, then ill suited and again well suites close corporations.Chapter Three is current legislations of close corporations containing three sections: legislative modes, legislative emphases and problems of legislation. The first section classifies the legislative modes of fifty states into three categories—flexible provisions mode, scattered provisions mode and elective subchapter mode and expounds on their respective features, utilization situation and merits and demerits. The second section, starting from the distinctiveness of internal governance of close corporations, illustrates the provisions of three modes in terms of the set-up of corporation organs, formalities and arrangement of relations between shareholders and the solution to deadlock, showing the special designs of legislation to suit close corporations which reveal their respects to the character of person joint of close corporation and shareholder autonomy. The third section discloses the possible external problems brought along with the over-emphasis on internal governance of close corporation by legislation.Chapter Four is reference to legislation in China. Firstly compare the corporation classification between China and the United States. Then according to Section Two of Chapter Three, analyze the regulations on limited corporations and unlisted stock corporations in China, pointing out existing problems and providing suggestions for improvement. Chapter Five is the overall conclusion which points out the characteristics and defects of close corporation legislation in America shared by all states and ends with the illumination of the spirit of American corporation law.