The Effectiveness Of Loan Contract Between The Domestic Enterprises

During the daily management of the China's enterprises, the lack of fund is one of the most important problems for the development of these enterprises. The enterprises will be affected a lot by the adjustment of macrostructure of banking because most of their loans are provided by the banks. The banks will be also deeply affected if the enterprises are working in a bad financial conditions. So how to make it better is very important.Based on the laws and regulations of China, it is unlawful for an enterprise to provide a loan to another enterprise. So it is hard for the enterprises to develop well if they cannot get enough money.This article contains four parts:In the first part, I make a definition of the loans between the enterprises. After that, I show the characters of the loans between the enterprises and show several examples of different contracts of the loans between the enterprises. I want to solve the financial problems by analysing the issue.In the second part, I introduce the reasons why the loans between the enterprises is unlawful, and the content of the applicable law of the loans between the enterprises, and the opinions from the court of loans between the enterprises.In the third part, I explain the meanings that if it is a legal action of loans between the enterprises. The most important meaning of that is to cure the imbalance of finance. It is a good way to develop the enterprises and banks. This step will also show the principle of freedom of the Contract Law.In the fourth part, I make several suggestions. We should make it lawful on legislation if one enterprise sign a loan contract with another. The government should check in all this kind of contracts and make approvals on the special loan contracts. Of course, the banks will take changes. The legislator will pay attention on the problems that will happen.