Exploration And Analysis Of Shareholders' Capital Contribution System

Shareholders'capital contribution system is a core issue of the corporate capitalsystem, as well as a big eye-catching bright spot in the company law newly released atthe end of 2005. The reform of the new company law can not be called little, rangingfrom the minimum registered capital to the system of divided payment to the form ofcontribution. However, it is regrettable that the disputes triggered by capitalcontribution in practice still rise and fall, threatening the safety of transactions and atthe same time undermining the efficiency of the transactions. Practice and theoreticalresearch show that the regulation of capital contribution in the new company law isrelatively simple and is weak in maneuverability. How to improve the system ofshareholders'capital contribution is still under further exploration.The author believes that shareholders'defective contribution is a useful starting point to observe the contribution system of the company law in China. The content ofcapital contribution defects include not only the responsibility of incomplete capitalcontribution, but also the lack of qualification of the contribution object, theshareholders'qualification of defective contributor and the transfer of defective sharesand many other issues, which are closely related to the arrangements of the capitalcontribution system. Carrying out a discussion from the aspect of defective capitalcontribution of shareholders not only enables an understanding of the shortages of thedefective contribution regulation in the existing company law, but also reveals someunsatisfactory present situations of the capital contribution system, hoping to benefitthe further development of the company law.This paper is divided into four chapters:Chapter I A general inspection of corporate capital contribution systemThis chapter starts from the links between capital contribution system and capitalsystem, noting that the content regulation of the former is the logical starting point aswell as the focus of attention of the latter. The value of the former is revealed as theinherent need of the latter. The author then explains the three values of transactionsafety, the balance of efficiency and interests and also the innovation in the capitalcontribution system of the new company law. The last section is the author's reflectionof the value orientation of the existing company law, pointing out that the emphasis onthe security value of the company law not only can not truly guarantee the safety ofthe main body of interests, but also sacrifices the efficiency of transactions andrestrains the company's ability to make profits.Chapter II explanation of defective capital contribution of shareholders withcapital contribution object defect as the centerThis chapter first defines defective capital contribution by comparing the viewsof other scholars and proposes the nature and types of defective capital contribution asthe author understands. Since then the author focuses on the defective circumstancesof several objects. The article points out that the effectiveness of currency contribution differs depending on whether the currency takes on public law responsibility andwhether the other investors are goodwill. From the aspect of physical object, theauthor discusses the "usefulness" of the contribution object, the effectiveness ofcompany's accepting capital contribution with a goodwill and contributability of theobject with guarantee right. There are risks in creditor's rights contribution, thereforeinsurance and examination mechanism for bringing creditor's rights contributionshould be set to prevent the quantity and quality defects; and in order to avoiddelivery defects, the creditor should notify the debtor in time and deliver document oftitle to the assignee. There are many factors giving rise to risks of property rightcontribution, including the defects resulting from inherent characteristics, defects ofrights, assessment defects and the risks of value changes. The author also analyzes thefollowing circumstances in sequence.Chapter III Explanation and analysis of issues related to shareholders'defectivecontributionThis chapter carries out the discussion centering around the shareholders'qualification, shareholders'rights of the defective contributors and the effectiveness ofthe transfer of the defective shares. Defective contributors have shareholders'rights,but their shares are subject to certain restrictions. Defective shares can be transferred,but taking into account the balance of interests, the endorser and the assignee will takejoint responsibility for the creditor after the transfer. As to the responsibility ofcomplementing the company's capital, the bargainer and the assignee taking a jointresponsibility is the principle, and it will be an exception if the latter can prove theirgoodwill so as to exempt from the responsibility. The last section of this chapter pointsout the shortages of the shareholders'capital contribution system from the aspects ofthe main body and forms of the responsibility of defective capital contribution and theunequal treatment of national and overseas companies.Chapter 4 Viewing the improvement of the shareholders'capital contributionsystem from the perspective of shareholders'contribution defects A structural characteristic of this article is that in the last section of each chapter,the author will put forward some thoughts about the related present situations andpoint out the shortages of some regulations. In the last chapter of this paper, the authorputs forward a plan for the improvement from the three levels of the value oflegislation, capital contribution object, transfer of shares and the responsibility oftransfer in accordance with the above discussed sequence. These plans include notonly the suggestions for improving the legal regulations, but also the ideas forpractical operation.