Research On Judicial Dissolution System Of Enterprises

The company is not smooth in operation for many reasons which sometimes lead to termination, one of means of company's termination is dissolution .Since corporation is the outcome of free contracts among shareholders, its foundation or dissolution will depend on their will. As the rights of shareholders are violated, while the corporation can't make agreement on resuming their rights or dissolving corporation, the shareholders trespassed should be entitled to safeguard their rights through such various remedies as applying for dissolution of corporation. New Corporation Law first stipulates the situation of judicial dissolution, but this stipulation is so superficial without systematic operation procedure that it is difficult to realize the effectiveness and punctuality of judicial remedy. Owing to frequent right abuse of chief shareholders, invalid right safeguard of subordinate shareholders as well as poor corporation management, constituting a sound corporation judicial dissolution law allows no delay. Under this situation, there is great theoretical value and practical value to analyze the defect of legislation status and judicial practice of judicial dissolution law in our country, as well as the subsequent adverse outcome, and to research how to perfect present legislation and set up judicial dissolution law. Through employing analysis method of comparative law, learning from the legislation experience abroad and applying to the factual situation in our country, the writer finally proposes the detailed assumption of establishing corporation judicial dissolution law to make it more perfect. The thesis is divided into four parts.Part one, the conspectus of judicial dissolution system of enterprises Judicial dissolution refers to a kind of system of corporate withdrawal that legal subject 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. There are great necessity and value of system to establish the dissolution system for the company. The function of judicial dissolution is to protect legitimate interests of shareholders 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. The judicial dissolution of enterprises is necessary because the company is the agreement and profit-generating. It helps to protect the minority stock holder's legitimate rights and interests when the big shareholder oppresses, swindles the minority stock holder. It is helpful to solve the predicament when company's affairs come to a deadlock. Besides, it is a need of the social stability too.Part two, the study of judicial dissolution system of enterprises in comparative lawAs a very important type of dissolution of corporation, judicial dissolution has been stipulated in many countries. And it has already been established and operated for more than one hundred years, with rich achievements of theory and practice. We can draw a lot of beneficial inspiration from reviewing judicial dissolution in comparative law .Although each countries has their different legislation concerning judicial dissolution of enterprises, there are a lot of commons on insisting on principle of caution in adopting .For example, as for subject of right of application of litigation for judicial dissolution, it introduces limitations of qualifications of subjects. 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. Foreign corporate legislations all establish the principle of limitation to decision of dissolution of enterprises, that is, the decision of dissolution of enterprises shall be the last choice after trying all possible relief, like compulsory transfer of stock ownership and so on. The enlightenment is worth our drawing lessons from.Part three, the legislative status and legislative analysis of judicial dissolution system in our countryPrior to the revision of Corporation Law, there is no clause about corporation dissolution in our country due to historical and realistic reasons. Legislation absence leads to loss of shareholders'rights and confusion of trial practice. The enterprise cannot use judicial power to relieve rights of shareholders 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 .No 183 in revised Company Laws, dated on October 27 of 2005, has a definite rule concerning court verdict for company disbandment .But this stipulation is so superficial without systematic operation procedure and the route to relieve right is single that it is difficult to realize the effectiveness and punctuality of judicial remedy. So the related rules should be perfected though judicial interpretation to protect the party's interest really.Part four, the judicial analysis of judicial dissolution system in our countryJudicial dissolution of enterprises is one of the remedy of shareholder's right. However, owing to the insufficiency of this stipulation in our country, it is very confused in the judicial practice. Legislation serves for the judicial practice for the purpose. So it is significant to research of these problems in the judicial practice of judicial dissolution of enterprises.There are many problems in the judicial practice of judicial dissolution of enterprises, including the nature of action, the jurisdiction, plaintiff qualification, defendant qualification, legal reasons of dissolution suit, the limitation of dissolution system misuse, remedy measures, corporation liquidation after judicial dissolution of enterprises and so on. China's legislation on the requirement for the plaintiff is not clear, and the defendant is not required at all. In the proceedings of judicial dissolution, shareholders should be appropriate to be plaintiff and defendant. As for the company, it is only appropriate to be the third party without an independent right to request .Dissolution of the judicial proceedings instituted on the subject, only a broad legislative provisions, but no specific reason. These should include the specific subject of a major shareholder abuse, corporate affairs deadlocked, and the misuse and waste of corporate assets are being, violation of the company or the public interest purposes, or the major causes of default happened we serious harm to the interests of shareholders and company and so on. In addition, because the dissolution of the judicial system in China is still not mature, by reference to the foreign legislation, prudent use of the judiciary should be dissolved. Trial judges should be based on certain principles, as it will regulate the procedure for setting up and maintaining the main commercial, self-help priority adhere to the principle of balance of interests. Both for companies, workers and the community, the enormous costs involved in dissolving a company .Therefore, legislation should refer to the legislation requiring other alternative relief measures, such as the mandatory equity replacement. Only as a last resort and under the circumstances, the court should only be made to dissolve the company. The Company Law provides no shareholders in the new court may request the court to settle judicial dissolution. This is still not possible to fundamentally solve the problem. After the dissolution of justice in the court ruling, if the company is unable to settle, the court may preside over the company's liquidation at the request of the parties.