The Liability Of Promoters When The Setup Of Incorporation Is Failed

In modern society, the corporation, because of its unique liability system and internal management system, is becoming more and more popular and even being adopted for the fundamental form. The aim to set up a corporation is for successful establishment, however, not all the setup can reach the goal. Besides the successful foundation, there is also a possibility that the establishment will come to nothing. The failure is due to the setup behavior which is not followed by law. Therefore, when people do Legislation about the company law, it is necessary that we should consider all kinds of situations instead of only paying attention to the success situation. So it's essential that we care about the situation when the foundation matter failed.The company law has been implemented in the country for more than ten years, but the research about the liability of sponsors is not much, let alone the systematic study on the liability of sponsors when the establish of the corporation is failed. Neither in theory nor in practice the knowledge of liability of sponsor is immaturely. It is necessary that we take a close look at the liability of sponsors when the setup of the company is failed. Those will enchase the development of the economic social society.This essay separates the failure of setup into two instances, one is unable to setup, and the other one is invalid to setup. Besides that it discriminates the promoters of corporation from entirety to individual, and whether there is a fault in the setup behavior by the promoters who are executing ones will be considered either. This essay has four paragraphs.The first part is about the setup incorporate and the failure of setup. This paragraph involves matters about setup, including the concept, the principle, the condition and the mode. The implication of failure setup, and the reason why the failure setup will occur, as well as the time about when the setup starts and ends, are also discussed. After providing information about the meaning of promoters and the legal status of the promoters, I presented my own standpoint and explained the reason for that. All of these are the theoretical work which is necessary.The second paragraph is about the liability of promoters when the setup is unable. This part started with analyzing of two cases, and the reason that why the promoters should take full responsibility when the setup came to nothing was fully discussed. Study on the legislative investigation in different countries, combined the rational deliberate and analysis of cases. It comes to the conclusion that the obligation of promoters when the setup is failed, should be analyzed from both external and internal, and whether the promoters are mean to make mistake as well as they are the execute ones or not, are also be considered. Generally speaking, the promoters take the joint responsibility to the external, and they take their own parts of liability to the internal. The exception of when promoters take liability is analyzed too.The third part is about the liability of promoters when the setup is invalid. The structure of this paragraph is as the same as the second paragraph. After the discussion about one case, some critical views are needed to solve. It's been argued that the company should take the first statue to take the responsibility to the third party. Besides that, the internal and external liability are also been discussed which promoters should take. The reason why the personality of corporation could be denied when the setup is invalid is also discussed.The forth part is about the regulation of the liability of promoters when the setup is failed. On the base of the conclusion which is argued in the further paper, I also think deeply about the legislative investigation and the judicial practice in Chinese. The drawbacks of the liability of promoters when the setup is failed currently are also reflected. At last, some tentative ideas which I consider may be useful for regulating the system of liability about promoters in failed instance are given. I hope it will help the construction of liability system about promoters and promote the level of theoretical research.