Study On Legal Problems Of Company External Guarantees

With the rapid development of commercial transactions, companies are entitled rights to deal with their property as business unit. Allowing companies for external guarantee can maintain security of commercial transactions in the market, but also promote capital flow and goods. Chinese current Company Law provides the company's external guarantee system. When providing required ability of companies for external guarantee, company must go through some legal procedures, that is, through the articles of association and resolutions of the shareholders or board of directors before launching any external guarantee. However, it does not provide any regulations in the effect of guarantee contract and liabilities followed when breaching the decision-making process, causing a lot of litigation. This is not conducive to the protection of transaction security and the promotion of financial intermediation.External guarantee depends on the rules in the articles of association. Within the limits prescribed in the Articles of Association and the permission of shareholders or the Board under the external guarantee procedures, the external guarantee contract is valid. However, if it is beyond the scope of the articles of association about procedures of external guarantee and the shareholders or the Board allows the company to external guarantee, the validity of the contract needs to be further identified. If it enters the stage of the proceedings in the judicial practice, the validity should be analyzed according to specific circumstances. Articles of association, acting as the carrier of the common will of the shareholders of the company should bind and regulate the acts of shareholders or directors and senior managers. Articles of association of the company are only an internal agreement, which do not have effects beyond the territory of the company and the third party. Therefore, we should not ask a third party to review the articles of association through the openness in articles of association and to infer the third person who has known the provisions of the Articles of association.When the contracts of guarantee get invalid,performance effect does not occur .Companies do free from any guarantee responsibilities,but they are surely to undertake legal liabilities. In the stage of the proceedings judicial ,in order to maintain fairness and justice in a market economy and to compensate for any losses of creditors,companies do need to accept liability to pay compensation based on the fault when signing a guarantee contract. By means of case study, unite theory with practice, contrast analysis and so on, these research methods, stress analysed the influence of company rules to company external guarantee effect and legal representative exceed his power and to the rules that creditor doesn't has try duty, meanwhile stress analysed after a guarantee contract invalid, the questions about indemnify responsibility assume. Upon this base, deal with the current situation of state related legislates, I put forward some legislate proposals; we hope to improve great benefit to state legislate system of company external guarantee.