On The Directors' Passive Qualification

The author states that there are some defects in China's rules of passive qualification of directors. In order to improve such rules, we should at least make reforms in the following issues: Firstly, we should extend the range which leads to the directors' passive qualification. Secondly, we may increase situations in the law which courts should consider while analyzing directors' disqualification cases. Thirdly, we must change the term of directors' disqualification from a fixing period of three or five years to a more flexible one. Fourthly, we should stipulate statutes about leave of court in directors' disqualification cases. Fifthly, we must stress that none of the circumstances can directly result in automatic disqualification of directors unless where the cases are relating to undischarged bankruptcy. Courts are the only authority to deal with such cases through legal proceedings. Furthermore, to realize the merit of the system of directors' passive qualification, we must establish an institution according with China's situation, such as inquiry organization, department of applying and register.The article comprises of three parts besides preface.In the preface, the author explores the concepts of passive qualification of directors, the significance of the above system, the value of this thesis, the now standing research state, the topic of this paper, and so forth.The first part of this thesis is the structuring of directors' passive qualification rules. The author addresses statutes of directors' passive qualification out of China, analyses such regulations, and the rules in China's legislation as well as how to perfect such issues. In the first sub-part the article deals with the rules out of China which primarily are those in Japan, the United Kingdom, Hongkong, Taiwan and other countries and areas. This sub-part will offer materials to discuss China's transplanting of the system of directors' passive qualification. In the second sub-part the author explores the institution of directors' passive qualification in foreign areas. In the third sub-part the author investigates how to improve China's relating rules.The second part mainly deals with how to realize the value of the institutions of directors'passive qualification, differently speaking, the system of directors disqualification. In the first sub-part, the author studies the parties revolving the cases of directors disqualification, namely the courts having jurisdiction, the party having rights to apply, the entity having responsibility to report. In the second sub-part the author works on the instances justifying the orders to disqualify the directors. In the third sub-part the author explores the situations about the exemption and the alleviating circumstances. In the forth sub-part the author analyzes the substitution of the courts' disqualification orders, namely disqualification undertakings. In the fifth sub-part the author discusses rules of granting leave, primarily composed of the factors to stress in granting leave and the granting process. In the sixth sub-part, the author argues about the register of disqualified directors, which mainly about the contents of register, inquiry of register, and invalidation of register.The third part of this article is the conclusion which deals with the contents of this paper. Furthermore, the author contends that it is a crucial task to establish and implement the regulations of directors disqualification and suggests we must improve other relating matters.