The Conflict Of Interest And Balance Between Shareholders And Creditors Of The Corporate

Shareholder and Creditor are the most important two parties in the corporate law. Due to the differences in their preference of investment and risk, it causes the conflict of interest between two of them. The corporate capital system shall coordinate the conflict interest between the shareholder and creditor. The corporate capital system shall take the interest of shareholder and focus on financing or shall take the interest of creditor and focus on fund raising? Different legislators in different countries have made opposite judgment based on their own interpretation of the function of corporate system and designed their unique model of corporate capital system. With the function of corporate law is changed by globalization, the capital system tends to be more relaxed worldwide. No doubt it has important theoretical and practical meanings to research that under a fairly relaxed legal capital system, the interest conflict and balance between shareholder and creditor. To adjust to the changes in the overseas corporate capital system, our new corporate law in 2005 has changed the strict legal capital system. The legal theory behind the changes is the key point of this paper. This reflects that the legislator has realized that corporate capital system can't carry out the function of providing protection to the creditor. No matter under which capital system model, the task of protecting the creditor's benefit shall be reasonably arranged inside and outside the corporate capital system. Then the balance of conflict interest between shareholder and creditor can reach the expectation of legislators.