On The Regulation Of Connected Deal In The Company Law

The connected transaction is the new economic phenomena and legal issues along with constant progress and development in the social and economic life. As to difference countries, states on the definition, scope and features of connected transactions vary. For the concept of the concerned transactions, there is no commonly accepted definition. In the economical practice, more and more people practice the interests of the company, the creditors , minority shareholders through the connected transaction. it is necessary to perfect the relevant laws and regulations on connected transactions by studying the laws on connected transcations,by fully recognizing the positive and the negative effects of connected transcations on market economy practices, and by referring to the regulation ways of foreign countries and other regions concerned on connected transcations.Based on the above purposes, this paper discusses connected transaction in the following five chapters:the outline of connected transaction; the basic theories about the regulations of the Company Law; the regulations on the directors in connected transaction;the regulations on the controlling shareholders of companies in connected transaction; improvement on the system of regulations.At the first, connected transcations are ecnomical ideas, not leagal ideas. In order to regulate connected transcations completely, the definition of connected transcations becomes the basic issue of the research. Connected transcations are actually transcations concluded between connected sides. The first chapter of the paper analyzes the definition and the four main features of connected transcations. In the second chapter, this paper discuss the basic theories of the Company Law about the regulations on connected transcations. The first section contains an analysis of rationality and pros of connected transcations as a kind of economic behavior. The second section discusses the theory premise of the regulation: the relationship between shareholders and directors; the relationship between controlling shareholders and minority shareholders and other mutual relationship in the connected transactions. The third section describes the four basic principles about the regulations on connected transcations.The third chapter discusses the regulation on connected transcations of the directors. Firstly, this chapter introduces the basis of the regulation on connected transcations of the directors: the duty of loyalty of the directors. In the second section, the prior regulation, discusses the procedures requirements and entities requirements in connected transcations of the directors. The third section describes the civil liability of directors in violation of the duty of loyalty, the elements and the concept of the derivative suit of shareholder .The forth chapter discusses the regulation on connected transcations of the controlling shareholders. Firstly, this chapter introduces the basis of the regulation on connected transcations of the controlling shareholders: the duty of loyalty of the controlling shareholders. In the second section, the prior regulation, discusses the system of approval of the shareholder meeting, the system of debarment of the shareholders'vote, the system of the independent directors . The third section describes the revoked, invalid action of the decision of the General meeting of shareholders, the civil liability of shareholders, the corporate veil system. The newly-amended"Company Law"in our country has many prescriptions on the regulation of connected transaction, which is a major breakthrough. However, it still has defects and blanks in terms of the transactions between the connected sides. The fifth chapter of the paper put forward some legislation advice on how to perfect the regulations on connected transactions of the"Company Law"in our country, on which form of legislation pattern should be adopted, and on what specific corporation legal system should be introduced to regulate connected transactions.