The Research On The Legeal System About Defective Incoporation

Defective incorporation is a problem that happens frequently andinevitably during the establishment of corporation, and defective corporationdoesn't satisfy the qualification and process of statute. During the course oftrading, business risks will be probably transferred to shareholders,creditors and stakeholders. And the defective incorporation has negativeeffect on the stability of the legal personality of the corporation. And finallyit will do great harm to the public interests involved and the stability ofeconomy order. So there is theoretical and practical value to research on theproblem.The dissertation set forth a definition on the defective incorporation andcompares it with some other legal concepts related, then explaining thecharacteristic and it isn't replaced. The research on the diverse situation ofdefective incorporation aims at explaining the cause of defectiveincorporation and the effect that it has on the stability of the legalpersonality. Then the dissertation discusses the different regulations in thecivil and the common law system on the defective incorporation. Despite thedifferences between the two law systems, it can be draw a conclusion thatthere is much coincidence between them. And the coincidence is upholdingvalidity of defective incorporation. After the researching on the system bylegal and economics ways, I think the validity of defective incorporationshould be legislated by China. It is more important to make certain theperson who should be liable for the liability than the validity of the system.Since there are so many shortages in the legislation about the defectiveincorporation in China, so I expect the advices will do great favor for thelegislation.