On The Property Of An Enterprise As A Juristic Person

The corporate property theory is formulated in the waves of reforms of state-owned enterprises, and has cumulated to be the dominant theory concerning the corporate rights or power. This paper disagrees with the theory. Any discussion on this topic cannot bypass the property theory. Without reviewing and reconstructing property, it is impossible to rationalize the theory of corporate property. The viewpoints proposed in this paper have in nature sound logic and therefore takes no account of value judgment. The dissertation divides into two chapters. Each chapter begins with critical analysis of traditional theories and then puts forward the innovative viewpoints. In the first chapter, the concept of property is renewed and the some new ideas are brought about as follows: the basic concept of property in the whole civil legal system shall be consistent, ruling out any conflict within legal systems; as a right, property refers to the qualification of acting not the factual act itself; as a right, property must involve interests as its end; the power of right is also the qualification of specific act for realizing property, and a new item of power of right is suggested, namely, the power of benefiting; the realizing of property entails cost; and other novel ideas. Those new ideas are not groundless but with strong logic and therefore can stand critical eyes. Subsequently, the second chapter, based on the reinterpretation of the concept of property, assails the traditional corporate property theories, both the dual property theory and the single property theory, and in addition raises doubts on the traditional enterprise operating right theory. An enterprise has no independent interests or will that is alien to that of the shareholders. An enterprise as a juristic person is in its nature a vehicle for shareholders to maximize their personal interests. The relationship between shareholders and their enterprise is in law of entrustment and agency which is caused to come into being as the result of the cost of realization of property. Of course, this agency is very much different from that in the traditional sense, therefore, the traditional theory on agency shall be reexamined. In this section, the paper also gives new thoughts on the theory of shareholders'right, arguing that it is not a new type of right in nature but in form, a bunch of various concrete rights. In the end, this chapter initiates a new theory on the "right"of an enterprise as a juristic person, which is called the "power of operating", differing from the traditional theory in that the enterprise doesn't have any right but only power. In the course of discussing, some other legal topics are touched with new thinking thereon but not taped. At last, in light of the new theories herein, the paper makes a general discourse on the reforms of the state-owned enterprises, taking account of the recent fierce argumentation in the economic arena. The entrustment and agency theory to some degree consists with the views proposed by Professor Lang Xianping whose core argument is that the default of "fiduciary duty"is the major reason giving rise to the poor performance of those state-owned enterprises.