Study On Judicial Dissolution Of Enterprises In Our Country

As an important legal act, dissolution of enterprises shall be regulated and adjusted by laws. However, at present, because provisions concerning dissolution of enterprises in corporation law and relevant regulations are not perfect and cannot fully satisfy the requirements of dissolution of enterprises in corporate withdrawal. Especially, there is legal blank in judicial dissolution of enterprises. The development of corporate economy in our country proposes new subject and requirements in terms of dissolution of enterprises, especially jurisprudential study and perfection in laws and regulations of judicial dissolution. Under this circumstance, the study concerning judicial dissolution of enterprises is obviously significant in theory and reality. First, it is helpful for guiding matters of corporate withdrawal, that is, dissolution of enterprises; second, it is helpful for providing reference to legislation in dissolution of enterprises. Study concerning legal issues of dissolution of enterprises provides theoretical preparation and reference to legislation in aspect of corporate withdrawal; third, through study concerning dissolution of enterprises, we can have the knowledge of foreign relevant theory and its orientation, broaden research thinking and vision, enrich and further study on theories of corporate law. This paper probes into the issue of judicial dissolution of enterprises in three aspects. The first part makes a brief introduction of judicial dissolution of enterprises, focusing on concept, nature and function of judicial dissolution of enterprises. Judicial dissolution refers to a kind of system of corporate withdrawal that legal subject, including the court, procuratorate, the party concerned, shareholder etc. asks the court to decide to dissolve enterprise according to legal procedures based on legal causes in fact. The nature of judicial dissolution of enterprises is a kind of judicial interposition or intervention, demonstrating the country's appropriate intervention of public powers of the country. The function of judicial dissolution is to protect legitimate interests of shareholders and creditors and total interests of the society. The theoretical foundation of judicial dissolution of enterprises is that application for dissolution of enterprises embodies powers and functions of rights of shareholder, and the foundation for right of application for dissolution by the creditor is to maintain balance between the enterprise and creditors of the enterprise and social public interests. The legality of the court's intervention in dissolution lies in that it is a kind of intervention in micro economy, that is, dissolution of enterprises by the country through judicial powers and it plays a role in coordinating and balancing distribution of interests of social resources. Judicial dissolution of enterprise does not conflict with judicial passivity. In the condition that the dispute has occurred and the party concerned proposes lawsuit, the intervention of the court to accept cases of dissolution of enterprises does not conflict with passive judicature. Besides, judicial dissolution embodies the principle of rule of law of judicial final decision. Judicial conservatism only strictly limits the scope of intervention in corporate autonomy by the court and it does not mean that the court can act as on-looker for litigation of dissolution of enterprises. Corporate autonomy does not conflict with judicial dissolution and in a sense, it is necessary to consolidate judicial intervention for corporate autonomy. The second part of the paper elaborates conditions of foreign legislation concerning judicial dissolution of enterprises. First, it introduces general provisions concerning dissolution of enterprises in foreign corporate legislation. Then, it mainly introduces special provisions concerning judicial dissolution. It introduces these systems in several aspects. First, foreign judicial dissolution procedure can be generally divided in sense of public law and private law. Second, as for subject of right of application of litigation for judicial dissolution, the general practice of most countries is that shareholder, creditor and even the enterprise shall propose the litigation of dissolution of enterprises by itself. It also introduces limitations of qualifications of above-mentioned subjects. Third, as for application causes in fact, foreign corporate legislations all confine causes in fact of dissolution to that the existence of the enterprise or its behavior does harm to social interests and seriously affects interests of shareholders and it is difficult to coordinate. It also introduces the specific circumstances of legislative regulations in different countries. Fourth, foreign corporate legislations all establish theprinciple of limitation to decision of dissolution of enterprises, that is, decision of dissolution shall be made only when all the relief methods are ineffective. They also regulate the prevention of ill-willed litigation, property protection and business guaranteeing during the period of litigation. In this part, it also analyzes deficiencies in corporate legislation in our country. There is no explicit regulation concerning judicial dissolution in Corporate Law in our country, showing legislative blank and deficiencies, so that the enterprise cannot use judicial power to relieve rights of shareholders and creditors and timely correct its operation when the existence of the enterprise is in illegal state or there is shareholder pressure or deadlock in the enterprise and therefore interests of the enterprise are or will be damaged seriously. In the third part of this paper, after reviewing judicial dissolution in comparative law, it outlines the institutional framework of judicial dissolution of enterprises in our country. The construction of this system is an ideal way to basically resolve theoretical problems of judicial dissolution and confusion in practice. The design of the whole set of system shall first explicate that the establishment of subject of right of application of judicial dissolution of enterprises shall consider the distinction in sense of public law and private law. Based on this, subject of right of application of judicial dissolution in private law sense includes creditors, shareholders. Limitations to litigations proposed by shareholders embody quantity of shares and holding time. Seek balance between lowering the requirements of litigations and preventing ill-intentioned litigations. In the construction of the new system, the design of application causes in fact shall be distinguished from causes in fact of judicial dissolution in sense of private law. Causes in fact of dissolution in sense of public law are: first the objective of establishment of the enterprise is illegal; second, business acts of the enterprise are illegal; third, after the enterprise is established, it does not do business during certain period or stop business until legal time limit. Causes in fact of dissolution in sense of private law include: that shareholders do not assume liability of investment so that the purpose of establishing enterprise cannot be realized, shareholder pressure and deadlock. Third, insist on principle of caution in adopting. The decision of dissolution of enterprises shall be the last choice after trying all possiblerelief, like compulsory transfer of stock ownership and so on. Fourth, prevent ill-intentioned litigation and establish compensation system of damage of judicial dissolution. Fifth, design concrete procedures for litigation of dissolution, that is, the establishment of jurisdiction shall be in convenience for litigation and the court to carry out work; the establishment of identity of subject of litigation shall be in accordance with principles of corporate law and civil law. The accused shall be explicated as the enterprise; the establishment of the plaintiff shall be based on whether it has entity rights. At last, the improvement of supporting systems, first, protect corporate properties and maintain business; second, liquidation system shall be improved and supported; third, pay attention to the protection of interests of creditors. As the final procedure, it is necessary to set up registration system of dissolution, strengthen the principle of information publicity of the enterprise and consolidate the supervision on dissolution by public powers.