How To Protect The Creditors' Benefit During The Affiliate Transaction

No one can argue the fact that the affiliate transaction is full of every corner of the world market with the range as well as the influence surprised everyone. On the one hand, to some extent the affiliate transaction can make the resource allocation distribution reasonably to get the scale economic effect and benefit the whole economy developing. On the other hand, control enterprise can achieve the benefit and evade the risks by making use of the independent status of the subordinate company as a legal person who enduring limited liability. Obviously, this behavior is illegal for sacrificing the subordinate company as well as it's small and medium shareholders and it's creditor's benefit, even country's benefit. This article starts with how to regulate the affiliate transaction and how to protect the benefit of the creditor of the affiliate company. Only a science and complete design for legal regulation can make the affiliate transaction and the affiliate enterprise more reasonable.There are five parts for this article.The first part raises the question of protection of the creditors'benefit during the affiliate transaction .There are there parts: first is the important factors during the illegal affiliate transactions; second is the lost if the benefit for creditors during the affiliate transactions; third is the necessity and the possibility of the protection if creditors'benefit.The second part is the comparison of the mode for protection of creditors'benefit. This part introduces the three different patterns of the United Kingdom, United States, German and the Taiwan area. These patterns are so characteristic that indicate the various methods to protect the creditors'benefit during the affiliate transaction. These experiences can give us some useful ideas.The third part is the introduction of the protection of the creditors'benefit in our China. There are some kinds of the laws to protect the creditors'benefit, especially the Corporate Law . The fourth part is the frame of legislative protection of the creditors'benefit during the affiliate transaction. There are two lines to construct the frame. The first line which according time order divides the protection into three links: Precautious mechanism in advance, Manage mechanism during the course and Guard mechanism during the bankrupting. The second line is divide the protection frame into two kind conditions: the contract type of the affiliate enterprise and the fact type of the affiliate enterprise.The last part is a summary. As everyone knows, enterprise group and multinational corporation will play a more and more important role in the market economy which with the further internationalization. They also bring us the affiliate enterprise and affiliate transaction which give the market not only the efficiency and beneficial but also the weak regulation in protecting the benefit of the creditor. The frame can give a system which also takes the Chinese economic developing into consideration in order to give some advises in terms of the legal regulation and hope those can help.