The Legal Adjustment Of Improper Affiliated Transactions

The appearance of numerous associated enterprises and the serious unfairness of affiliated cause strong impact upon our current legal system. This impact brings not only the issues of readjustment by company law to associated enterprises, but also the issues of readjustment by securities law, tax law, etc, to associated enterprises. Although our tax law and securities law contain some stipulations from certain aspects concerning the affiliated transactions of associated enterprises, but there is almost no such stipulation in our company law, which is regarded as a basis of market economy. Therefore, our country should perfect our company law in stipulating affiliated transactions, on the basis of taking the experiences of relevant countries and regions into reference, and combining our national conditions, in order to provide basis for the perfection of other branch laws. Thereby the legal adjustment of affiliated transactions should be more efficient.This paper includes foreword and four parts. Part one shows the analysis on the formation cause of affiliated transactions and the practical significance of legal adjustment. Part two is about the legal adjustment by company law, including the legal adjustment by company law on inside persons and the protection of outside persons. Part three targets at the adjustment by securities law to affiliated transactions, especially to the affiliated transactions of listed companies. And part four discusses the legal adjustment by tax law.The key point of this paper is the legal adjustment by company law, because the legal adjustment to unfair affiliated transactions in all aspects needs the company law, tax law and securities law as core force, while the company law seems to be the basis of all. The company law adjusts directly the own organization system and operation activities of a company, it may set up the balance mechanism between big and small shareholders of a company in the company treatment structure, that can prevent the holding shareholder form abusing power in the inside operation decision-making, and stop the unfairaffiliated transactions. That is inside adjustment. The securities law adjusts a listed company by laying down various systems of disclosure of affiliated transactions and supervision according to the character of stock market. The securities law and the tax law together constitute the outside adjustment to the unfair affiliated transactions. As the above three forces merge into an entirety, the affiliated transactions should be adjusted wholly from inside to outside.